My trading strategy to weather the U.S. budget mess

By Robert ZingaleCovestor

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.

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