Friday, 16 October 2015

TVIX, UVXY - a third week of horror

With the VIX -11.9% @ 15.05, the 2x lev' bullish instruments of TVIX and UVXY closed net lower for a third consecutive week, by -15.4% and -16.5% respectively. Near term outlook offers further equity upside to the 200dma of sp'2060..which would likely grind another 10/15% off the infamous widow maker trading vehicles.

TVIX, daily

UVXY, daily


*first, an update on the VIX

As for TVIX and UVXY, another terrible week.. the fifth sig' decline of the last six weeks.

The inherent statistical decay is only adding to the current decline. TVIX has now cooled from $19.90 to $7.00.. a horrific fall of 65%.

Right now, the notion of TVIX clawing back to the upper teens, never mind the $20/30s, seems fanciful. Even if the market gets stuck at sp'2050/60.. and retraces to the 1950s... TVIX will likely only get back to the $10/13 zone and that is assuming it can floor in the 6s.

As ever.. such instruments are (almost always) for short term holds only.

*I have ZERO interest in being long volatility in the near term, having waved the white flag when sp'1960s and VIX 20.