Friday, 27 June 2014

TVIX, UVXY - the decay continues

With the VIX still unable to even claw into the low teens, the 2x lev' bullish VIX instruments of TVIX and UVXY continue to decay. TVIX and UVXY saw net weekly declines of -3.8% and -5.0% respectively. Near term outlook is for further decay into mid July... when we might finally see a VIX floor in the 9s.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw net weekly gains of 3.6%


Suffice to say, market volatility remains very low. The leveraged instruments are simply seeing the usual problem of statistical decay.

My best guess... the VIX floors in the low 10s.. possibly 9s, in mid July, which might.....just might be reflective of a larger peak in the equity market.

In the next VIX up wave (post mid July)... first upside target will be the 15/18 zone. The 20s look unlikely in the initial move.

It will be absolutely critical for equity bears to break to the VIX 22s in Aug/Sept, if there is to be any hope of a major equity correction this year.

As things are, I have no interest in being long the VIX until at least mid July.