New research findings have resulted in the development of a standalone algorithm which now powers the Bull Vix. Prior to this new development the Bull Vix utilized the BBT Algorithm for its alerts. The algorithm has also reduced the volatility of the Bull Vix’s signals which produced an aggregate gain of 448.3% from January 14, 2010 2010 to February 27, 2020.
A back test for all of the historical data available for the CBOE volatility index since 2010 was conducted. The Bull Vix’s track record to trade the VIX related instruments from 24 to 98 trading days after the occurrence of a Bullish Sentiment Anomaly (BSA) was flawless.
Continuing empirical research of all Bullish Sentiment Anomaly (BSA) occurrences since 2010 has resulted in the Bull Vix’s signals to trade VIX related securities being tweaked to almost perfection. The cumulative net gain for the algorithm’s 27 signals, less than three per year from 2010 to 2020, was 443%.
A total of 20 of the Bull Vix’s 27 signals were winners for a success ratio of 74%. The average gain per winning signal was 23.6%. The average loss per a losing signal was 4.3%.
The Bull Vix’s signals for the April 15 to May 20, 2010 trading period encompassed the infamous May 6, 2010 Flash Crash. From May 5th to May 6th the S&P 500 declined by 9.4% on no news. The gain for the signals during the 5-week period was 74.1%.
S&P 500 to decline by 11%.
Call options which trade VIX, VXX and UVXY to increase by 1,000% to 10,000%.
Shares of the VXX and UVXY which mimic the CBOE’s volatility index (VIX) to increase by 50% and 100% respectively.
Additionally, the discovery of the anomaly has resulted in the development of the
Bull Vix (BVX) algorithm and www.bullvix.com which is now operational. The Bull Vix’s mandate is to exclusively:
Monitor for future BSA occurrences
Utilize BBT algorithm’s short signals, which have powered Bull & Bear Tracker and Bear Trader alerts to trade long and short index ETFs since 2018, to send alerts to trade VIX related VXX and UVXY shares and call options for the VXX, UVXY and VIX index. Due to increases in volatility for the five weeks following BSA occurrences being highly probable the conditions for deploying call option strategies for returns of 1,000% to 10,000% within a few weeks are ideal.