Due to the U.S. budget and debt ceiling debates, I believe there will be increasing S&P 500 Index (SPX) volatility until a resolution is reached.  This would imply a long position for Barclays Bank PLC iPath S&P 500 VIX Short-Term Futures (VXX) and Barclays Bank PLC iPath S&P 500 VIX Mid-Term Futures (VXZ).

However, VIX futures can quickly drop once a resolution is finally announced. Therefore, I am remaining in cash until a resolution is announced and will then enter either short VXX or VXZ positions.

The investments discussed are held in client accounts as of September 30, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.