Wednesday 6 June 2012

TVIX, UVXY - more carnage

With the indexes rising 2-3% today, and the VIX losing around 10%, both TVIX and UVXY really suffered today.


TVIX



UVXY



Summary

We've seen some negative divergence develop in the last few days, and it looks like both TVIX and UVXY have some serious downside yet to come. Assuming the VIX loses at least a further 10% or so, we're looking at another 15/20% from both of these long VIX instruments.

I think they'll be at attractive levels towards the end of next week - prior to the Greek elections and the Fed' meeting June 19/20.