Investment Analysis of S&P 500 and VIX futures
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Stephen Aniston is an investor focused on the volatility and cryptocurrency markets.
His investment analysis of the S&P 500 and VIX futures markets has been featured in mainstream media like the
and Wall Street Journal.
He was also a contributor to Investing.com and Seeking Alpha in the past.
Prior to becoming an investor, Stephen was a Wall Street Information Technology VP at Royal Bank of Scotland and Technical Architect of the Merchant Banking Division at Goldman Sachs.
His expertise is in alternative investments - hedge funds and private equity.
He is an experienced software programmer using the Microsoft development stack, has an Industrial Engineering degree from Stanford University and was a national math olympian in high school.
VIXCONTANGO.com offers systematic trading strategies using volatility ETFs like SVXY and VXX and a discretionary FANG-style crypto/Web 3.0 portfolio.
The website was started in 2013 as a hobby project to track VIX statistics and after getting high traffic in 2015, Stephen quit his job on Wall Street to become a full-time financial analystics provider and investor.
Over the years more than 400 investors have subscribed to read our newsletters and use our analytics.
Our subscribers are wealthy businessmen, financial advisors, hedge fund traders and Wall Street managing directors.
In 2017, Stephen was a sub-adviser for the Measured Risk Strategy Fund (MRPAX), an upstart short volatility mutual fund.
He has provided consulting services to plaintiffs in Volmageddon lawsuits.
We provide investment analysis for the SPX and VIX futures market and related exchange traded products (ETPs) like SPY, VXX and SVXY.
VIX ETPs are composed of VIX futures which in turn are based on the CBOE S&P 500 Volatility Index (VIX) or otherwise widely known as the "fear index".
The VIX futures market is a growing derivative market with over $4 billion in average daily trading volume in 2016.
On this website, you can will be provided with the tools and knowledge to trade popular VIX ETPs like SVXY and VXX for profit.
Long volatility strategies are used for protection against market turmoil while short volatility strategies are used as "yield enhancers".
A short volatility strategy is similar to being leveraged long the stock market while a long volatility strategy is similar to being leveraged short the stock market.
The VIX has a built in leverage: historically, the VIX moves +4% for every -1% move in the SPX. Thus a short volatility strategy enables to you to achieve higher than market returns.
In addition to the leverage, one of the most attractive features of a short volatility strategy is its ability to generate returns when the market is rangebound, thus making it an excellent "catchup" trade.
However, periods of market beating performance come with a substantial cost.
When adverse market conditions strike, losses in short volatility strategy can be catastrophic while gains in a long volatility strategy add up to big numbers.
Moves of +/-40% in a month can happen once or even a few times a year. Buy and hold is not an option for any volatility strategy or any VIX ETF.
Any exposure to this asset class must be actively managed and this is where we can help you.
Our subscribers get daily email newsletters with analysis of the S&P 500 index (SPX), VIX, VIX futures & important sector ETFs.
You will be well informed about what moves the market.
You will have access to live and historical VIX and VIX futures data, real-time dashboards, daily reports and many proprietary VIX analytics that help you succeed as a trader.
We also help you with trading algos and factor labs (continuous factor backtests) and discretionary investment strategies.
Our systematic algos provide well-timed entry and exit points into the most popular volatility ETPs like SVXY and VXX.
We track over 20 volatility signals in the following categories:
We bought our first Bitcoin after the Cyprus crisis in 2013. Our research in early 2014 "Why You Should Invest in Bitcoin and How" correctly predicted
that Bitcoin would be around $50,000 in 2021 if its primary monetary use became "Store of Value" (Digital Gold).
A decade later alternative crypto-currencies have evolved into digital tokens that give you ownership of the future of computing (Web 3.0).
Digital tokens are a growth investment that should be a mandatory part of any diversified macro or technology portfolio.
Due to the inherent capacity constraints of distributed computing, we don't think there will be
a single blockchain winner. Instead, there will be multiple winners but only a few blockchains will capture majority of the value from blockchain activities due to agglomeration and network effects.
This is similar to how Apple, Dell and Microsoft has captured majority of the value from personal computing (Web 1.0) while Microsoft, Amazon, google and Facebook from cloud computing (Web 2.0).
Our investment objective is to find which 5 or 6 blockchains will be the long-term Web 3.0 winners.
We have identified 8 of the Top 20 coins by market cap over the past 5 years.
Our success stems from good understanding of the software development lifecycle after spending a decade running Wall Street technology teams.
We can identify which blockchain teams can deliver on their vision and whether they pursue the correct technology.
Web 3.0 is the next step in the evolution of the internet.
The internet (Web 1.0) started out as an explosion of creativity in the 90s when many small companies (dot coms) invented new services to be delivered over the internet.
In the 2000s, centralized computing capacity grew dramatically and computing tasks started to get outsourced to the cloud (Web 2.0) due to a reduction in maintenance costs, increase in uptime, faster processing times and cheaper pricing.
Web 3 builds on top of Web 2 by removing the large Big Tech computing rentiers and democratizing network value capture.
In Web 3, creators own their digital data and digital infrastructure on the blockchain and as a result can collect rental income from their own activity and network value contribution.
Ultimately value will flow to those who create it and technology network rents should be in the 10-20% range instead of the 100% currently captured by Big Tech.
The cloud business model is ripe for disruption and distributed computing networks will deliver that disruption.
While our service provides technical analytics that help you swing trade VIX and SPX ETFs, our investment analysis focuses not only on technicals,
but also on fundamentals like corporate earnings and valuation multiples. Earnings are only 5-10% of stock prices, the other 90-95% are multiples which are an
estimate of how long corporations can sustain the earnings growth.
That estimate in turn is heavily dependent on government policy which is determined by domestic politics and international geopolitics.
Government policy can be broken down into monetary policy and fiscal policy and that combination determines the primary direction of stock markets and their volatility regimes.
Our investment analysis focuses heavily on the US President and Congress, their policy proposals and the chances their proposals have to become actual legislation.
We discount and score the economic impact of policy proposals and analyze how they might affect certain sectors and broad markets.
Our statistical analysis often diverges from information that is dissemminated in the mainstream media. We correctly predicted the Trump win in 2016 and Biden win in 2020.
WARNING: Many people get upset when our handicapping diverges from their own political views.
We managed to upset a lot of Democrats in 2016 with our Trump call and many Republicans in 2020 with our Biden call.
Our intent is not to upset people but to analyze political reality as we see it and determine how that affects markets.
Our forecast are by no means perfect, but uncomfortable political analysis is a big part of our investment process.
If you will get upset about political analysis in an investment newsletter, our services are probably not for you.
Stephen has been harassed and censored by the American government, American corporate media outlets and American social media companies for his centrist anti-libertarian views.
In 2014, Seeking Alpha refused to publish his 2014 article about Bitcoin
along with a number of other articles which critiqued Republican tax cuts.
Right before the 2020 election, Trump sent Secret Service agents to question Stephen in his home for anti-Trump views expressed on Twitter.
In 2021, Twitter suspended his account without clear explanation.
Stephen's online presence in America is being censored by powerful right-wing groups who control the business media and social media and
don't like to hear opposition to their extremist libertarian ideology of abolishing taxation.
First, let me thank you profusely for your service. It is unquestionably the most perceptive, and prescient, market analysis that I'm aware of. You do great work, and for that you have my sincere gratitude.
It's an "Encyclopedia Britannica" compared to the other "Dr. Seuss" VIX sites. I've been trading VIX and related products for a while and the amount of detail and analytics you have is impressive.
Thanks for everything you do...I am sincerely appreciative. I just could not do this with any kind of confidence without your help.
Yours is the last service that I would cancel. Outstanding timing and advice as usual. Using your volatility readings you do such a great job giving me the likely direction of the market! That's soo important!
Thanks for the excellent newsletter. I'm enjoying my subscription which provides great value. I pay for only two research services, yours and Hedgeye, which I believe are the two best in the business.
I really appreciate your updates and commentary! I wonder how much they’ll earn through fools throwing their money at TVIX over the years (I was definitely one of them before I found your site!) as its popularity explodes.
I really enjoy checking this data---it can become a little obsessive. I am sure this will become a larger trading vehicle for me as become more comfortable with the indicators
I'm getting good value out of your observations on XIV/VIX, augmenting my index stuff.
Great summary, thank you so much for the explanations, hard work and communication to your members.
I have learned a lot from your economic analysis....thanks!
Really like your work on the + service!
Thanks for your excellent study and in particular your weekly state of volatility.
Appreciate the hard work you do. Thank you for the great updates
I love that you don't hedge your views
I am enjoying the service
I appreciate your analysis and discussion of the forces that affect markets. Keep providing us with this important information.
Thanks for this comprehensive expert review...
That was a great write up, so informative.
By the way, many thanks for your excellent work. It is great to see all of this information come together in one place.
Thanks for your work. It is extremely useful.
Congratulations on your excellent calls.
Thank you very much for the mobile site! I have been hoping for this.
I appreciate your excellent work and the information you are providing.
Truly a jaw-dropping post. Amazing analysis
I thought your volatility piece you wrote over the weekend was very good...thorough
The website and depth of content look fantastic
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Algorithmic Leveraged SPY strategy
Take advantage of UPRO whenever volatility is low or declining. This
swing trade strategy minimizes drawdowns and cuts exposure as soon as volatility starts rising.
Learn more »
Algorithmic Short VIX strategy
Take advantage of SVXY whenever it goes on a multi-week positive run. This
swing trade strategy minimizes drawdowns and cuts exposure as soon as trouble in SVXY surfaces.
Take advantage of SVXY whenever it goes on a multi-week positive run. This
swing trade strategy maximizes returns and aims to stay in SVXY as long as possible.
Algorithmic Long VIX strategy
Take advantage of VIXY whenever it goes on a multi-week positive run.
This strategy is invested only when the VIX Futures Curve is heavily inverted which happens rarely.
The strategies are built with the goal of preventing the biggest drawdowns in the underlying Volatility ETFs. In most years, our strategies will outperform their underlying simply by avoiding the drawdowns and participating in the rallies.
The strategies generate frequent trades near the tops of the underlying in order to prevent a big drawdown.
Getting out in time is very important as the drawdowns in Volatility ETFs can be quite quick and quite large. The strategies
will not participate in the initial recoveries of the underlying as we were unable to find a set of parameters that would enable us to do that. Generally speaking, our trading strategies try to capture the middle part of the volatility cycle when there is an established trend. The SmartXIV tends to be invested about 50% of the time and usually
after volatility conditions truly stabilize. The SmartVXX strategy is invested only about 5% of the time as over the past few years the long bull market has put the long volatility trade in a funk.
The systematic trading strategies were developed using an iterative backtesting process that tested over 10 volatility signals against a set of core backtesting algorithms.
We utilized Simple Crossover, Dual Threshold First Cross, Dual Threshold Hold, Average True Range and Moving Average backtesting strategies.
We ran each volatility factor against all strategies using a variety of thresholds to determine the best performing combination of thresholds and signals.
Strategies were evaluated not only for their best return profile, but also for their ability to minimize drawdowns and trading frequency. Once the appropriate signals and thresholds
were determined, we utilized a combination of the best signals to further minimize drawdowns and trading frequency without sacrificing performance. The SmartSVXY and SmartVXX have a better
MAR ratio (Measurements of Returns Adjusted for Risk) than any individual strategy we tested. While there were a couple of better performing strategies, the SmartShortVIX and SmartLongVIX were
selected for their ability to produce the best risk-adjusted returns. We went into the backtest without prejudice with regards to the factors.
The volatility indexes and VIX futures data used by the backtests is readily available on widely-used popular websites such as Yahoo and CBOE. We have not used phantom calculated values for XIV and VXX prior to 2009 to backtest all the way to 2004 when VIX futures started trading.
In addition, only daily closing data was used for the Volatility ETFs and daily settlement values were used for VIX futures.
The backtests targeted a basic 401(k) trading account without margin. As a result, buys were delayed 3 days after a sell to ensure that the account can actually perform the buy. We assumed a 0.1% slippage during the trade execution (price above 0.1% of the close price was
used to buy and price below 0.1% of closing was used to sell). A trading fee of $7.50 per transaction was assumed. The initial amount for the strategy portfolios was $100,000 and when buying, as close to 100% of the portfolio balance as possible was invested. The cash was
assumed to generate 0% return.
Black Peak Ventures does not provide professional financial investment advice specific to your life situation.
Black Peak Ventures provides investment analysis of the CBOE VIX futures market and related exchange traded products using algorithmic and discretionary signals derived from proprietary indicators, measurements and analytics.
Prior performance of these strategies does not guarantee future returns. We were only able to backtest during the 2009-2015 period as the underlying Volatility ETFs did not exist prior to 2009.
In addition, the 2009-2015 period features an unprecended intervention in the capital markets by the Federal Reserve and other central banks via Quantative Easing, Zero Interest Rate Policy and other measures.
The backtests reflect the market conditions during that period of time which are unprecedented in history. These conditions resulted in an 6%+ average contango between the front 2 futures thus greatly enhancing the performance of XIV (Short Volatility ETN) and greatly
hindering the performance of VXX (Long Volatility ETN). Whether these market conditions will persist in the future is unknown and any change in market conditions in the future may affect the performance of the strategies going forward.