Friday, 9 October 2015

TVIX, UVXY - a second week of horror

With volatility net lower for a second consecutive week, the 2x lev' bullish VIX instruments of TVIX and UVXY continued to implode, settling -21.8% and -22.2% respectively. Near term outlook is for continued equity strength, to the sp'2040/60 zone, and that will likely equate to VIX remaining subdued in the mid/low teens.

TVIX, daily

UVXY, daily


*first an update on the VIX

A rather severe net weekly decline of -18.4%... settling @ 17.08. The 15/14s look probable if sp'2050/60s before end month.

It is notable that the VIX weekly MACD (blue bar histogram) cycle will turn negative at next Monday's open. Certainly, that does support the notion of further equity upside for at least another week or two.

As for TVIX and UVXY.. well, the broader decline from the Aug' highs continues.. and we've now seen TVIX fall from $19.90 to $8.12.

As ever... such leveraged instruments for (almost always) for short term holds only.. due to their inherent statistical decay.

*I have no position in the VIX.. having closed out (for a sig' loss) at the Monday open.. when VIX was 20.30.