Friday, 26 February 2016

TVIX, UVXY - a second week of declines

With equities continuing to battle upward, the VIX remained in cooling mode. The 2x lev' bullish instruments of TVIX and UVXY settled lower by -7.7% and -8.0% respectively. Near term outlook offers subdued volatility into mid March, before viable hyper upside into April-May.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a net weekly decline of -3.5%.

As for TVIX/UVXY, they look set to weaken for another 2-3 weeks. That will probably equate to another 15/20% lower, not least as they are also prone to the issue of statistical decay.

*I am seeking to be long VIX from mid March onward.. and all the way into May/June.

VIX 40/50s looks due in the next equity wave lower... and if so.. TVIX/UVXY will have risen by at least 4-5x.. from whatever level they are trading in mid March.