We have had a proprietary volatility premium indicator in place for some time. Now, we are going to begin to use it in a trading system that we have developed.
Short volatility strategies attract traders seeking profits during low or decreasing volatility periods, making them appealing in quiet market settings. This appeal has contributed to the renewed popularity of Short Volatility ETNs such as SVXY today.
The $SPX Index registered another new all-time closing high yesterday (March 27th) and another new all-time intraday high on March 21st. So, the bull market is still in place. $SPX has a strong support area at 5050-5180, an area where the Index traded in late February and early March. A close below 5050 would be viewed as quite negative by many traders, and we would expect that sell signals would emerge from our indicators if that happened.
There is a developing divergence between Cumulative Volume Breadth (CVB) and $SPX. That is, $SPX is making new all-time highs, but CVB is not. CVB is merely the running daily total of “advancing volume minus declining volume.”
February has been a big problem for the stock market in recent years. The table below shows the $SPX results for February going back to 2002.
The full track record, including 2023, is now available on our website. The information for 2023 is going to be presented in this article. 2023 was a profitable year for our recommendations, with an average gain at an annual rate of 13.8% – slightly above our 32-year average rate of 12.2%.
