TVIX, UVXY - 70% lower in three months

With the end of the first quarter, its a sideline curiosity to note the decay and destruction seen in the 2x leveraged bullish VIX instruments. TVIX and UVXY both declined over seventy percent in Q1, whilst the VIX itself slipped from 18 to the 12s...a drop of around 30%.


TVIX, daily

UVXY, daily

Summary

First, keep in mind the VIX across the last few months...

VIX, weekly

The little spike at the end of 2012 - VIX 23.23, now seems a long time ago. Even the recent spike into the 19s was ever so brief, and we're now back in the lowly 12s. So..what next?


Best guess

The index count is highly suggestive of a retracement to at least the sp'1470s in April/May. The big issue is what would that mean for the VIX ?

Can the VIX at least make a brief spike into the 20s ? I am very uncertain of this. Its very possible that if the indexes are very slow to decline, even if the market can slip to the 1470s, the VIX might only reach the high teens again.

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As for TVIX and UVXY, they certainly look exhausted on the downside - with a market arguably very close to a top, they won't likely fall much further.

Yet, as I noted at the start, the declines across the past 3 months are indeed the greatest reminder that these leveraged instruments are for short term holds only.

But then..everyone knows that...right?