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FRED GOODMAN'S KEY INDICATORS FOR
INVESTMENT SUCCESS
Here are four simple rules that can generate a very interesting speculative trade based on the VIX -- the CBOE Volatility Index. You buy the market when:
And then you sell three days later: no regrets. The VIX meets all four rules today, August 30. You'd buy today, and sell on the third day, Wednesday the 4th of September. I will admit that it is a bit scary to hold a speculative trade over a long holiday weekend, but that's the trade. In the last year and a half, this trade occurred 12 times. There were 8 gains and 4 losses. The biggest gain was 55 S&P points, and the biggest loss was 19 points. The total gain was a net of 147 points over the 12 trades. The last time the VIX gave this signal was July 25, and it returned 6.6% in three days in July, from a purchase at 843.42 on the S&P 500 to a sale of 898.96. But nothing changes the fact that this is a speculative short term trade, be warned!
Fred Goodman, CFP, is a fee-only Certified Financial Planner based in Los Angeles. You can send him your questions and comments via email at Fred@MarketMonograph.com. The charts and commentary represent what Fred is thinking about the market and thinking of doing for his own account and for accounts he manages. There is no guarantee that you will profit from trading as discussed herein. You may lose money and Fred assumes no responsibility for what you do or do not do with this information. 
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