Friday, 24 April 2015

TVIX, UVXY - a market with no concerns

As equity indexes broke new highs, the VIX broke a new cycle low of 12.12 - the lowest level since early December. The 2x bullish VIX instruments of TVIX and UVXY saw net weekly declines of a significant -11.0% and -12.3% respecitvely. This remains a market that has no concern about anything.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a net weekly decline of -11.1%

Clearly, VIX is now extremely low, but any look at the weekly.. or even monthly cycle, would be a reminder that the VIX can remain low for many weeks... if not months.

The next best opportunity for increased market volatility looks to be the FOMC of June 17th', when some will be moderately concerned that the US Fed will raise rates by 25bps.

As for TVIX/UVXY... the problem of statistical decay remains... and currently those still resolutely holding long are bring ground to dust.

*I have ZERO interest in being long the VIX for some months.