Friday, 22 April 2016

TVIX, UVXY - another net weekly decline

With US equity indexes breaking new multi-month highs, the VIX broke a new low of 12.50. The 2x lev' bullish instruments of TVIX and UVXY were naturally on the slide, with net weekly declines of -11.3% and -11.1% respectively. Near term outlook offers increased volatility into end month.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a net weekly decline of -2.9%

If the sp'2050/40s next week, VIX has a fair opportunity of pushing to the upper teens. Clearly though, sustained action above the key 20 threshold looks out of range for some weeks.

As for TVIX and UVXY.. a second net weekly decline, and both instruments naturally broke new historic lows this week.

Since the Feb'11th VIX high of 30.90 - with sp'1810...

TVIX, $13.58 - 3.54 :  -74%
UVXY, $61.92 - 15.51:  -75%

Those are unquestionably dire.. but not surprising numbers, considering such instruments are relentlessly under downward pressure via a number of factors, not least statistical decay.

*yours truly remains underwater.. and even TVIX back in the $5s looks a challenge... and that is with a bearish scenario of sp'2050/40s.. with VIX 18/19s.