I know that this is late but I just dusted off my S&P500 option volatility prediction model.  For this week only, I will be posting my S&P500 volatility predictions on my blog, after that I will be posting the predictions on Monday mornings via my Twitter account. 

You can follow me on Twitter here. 

FYI, this model is correct roughly 60% for the direction of volatility only, its no good for actual magnitude. 

Some strategies to use in cases where the index option volatility is predicted to increase would either be a long straddle or long strangle.  In cases where the volatility is predicted to decrease you’d consider using a short straddle or short strangle instead.  60% odds are very good and with good money management you have a great edge!

Here is the prediction: For the week ending 7/17/09, a historical volatility (HV) predicted close for the S&P500 is 0.2736, UP from last week’s close of 0.2183. Remember, the direction is what counts in this model (UP or DOWN), not the actual HV number.