Tuesday, 4 March 2014

TVIX - widow maker still making widows

With the US and world equity indexes rebounding strongly, the VIX is back on the slide. The 2x lev (bullish) VIX instrument of TVIX fell a considerable -12.1%, settling @ $7.17. Near term outlook is for further downside, and the usual 'decay' problem sure won't help.

TVIX, daily


*first, an update on the daily VIX

As I noted yesterday, the daily closing candle for the VIX did not bode well for the equity bears. Today's gap lower was certainly not exactly a surprise. A black-fail candle - as I like to call them, are not to be dismissed lightly

As for the TVIX, rest of the week doesn't look good.

My broader market outlook remains a target equity cycle high around the time of the next FOMC (March'19). If that is the case, the TVIX will merely decay for another 10 trading days or so.

As ever...such lev' instruments are for short term holds only. Rarely do multi-month holds work out..even when the trend is going the 'right' way.