Friday, 11 March 2016

TVIX, UVXY - a fourth net weekly decline

With VIX continuing to cool, the 2x lev' bullish instruments of TVIX and UVXY, saw net weekly declines for a fourth consecutive week, declining by -7.5% and -8.3% respectively. Near term outlook threatens further cooling in volatility into the FOMC of March 16th.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a net decline of -2.1%.

As for TVIX/UVXY... the pain continues.

TVIX has now declined by -54.0% since the high of Feb'11th high of $13.58
UVXY -55.2%, from the Feb'11th high of $61.92

It has been a brutal month for the VIX instruments, as the VIX has cooled from a Feb'11th peak of 30.90 (with sp'1810) to the mid 16s.. with sp'2022.

If sp'2030/40s next week, TVIX/UVXY will likely see a further 5/10% decline, before beginning a new multi-week up cycle.

*I will be looking to be long the VIX, once the next FOMC is out of the way. First upside target will be a monthly VIX close >20.

If VIX 40/50s - with sp'1700/1600s, by early summer, I would certainly want to be broadly long VIX.

As ever, such instruments are (almost always) for very short term holds only, due to the underlying problem of statistical decay.