Friday, 22 May 2015

TVIX, UVXY - new lows, renewed horror

With equities breaking new highs this week, the VIX continued to cool. The 2x lev' bullish VIX instruments of TVIX and UVXY settled lower by a rather horrific -15.4% and -13.1% respectively. Near term outlook is for continued equity upside, with VIX likely to remain subdued at least into mid June.

TVIX ,daily

UVXY, daily


*first, an update on the VIX, which saw a net weekly decline of -2.0%.

Relative to the VIX, the 2x lev' instruments saw some rather severe downside.

At some point this summer/autumn the VIX is going to see a new multi-week up wave. Right now, the low 20s look viable primary target.. but typically, such levels won't hold for more than a few days... if hours.

Broadly, long VIX trades via TVIX/UVXY remain inherently pointless for holds much beyond 3-5 trading days.

*UVXY saw a reverse split recently.

I am bemused as to why Velocityshares have not yet done the same to TVIX, at least on the order of 1 for 20.