Friday, 15 April 2016

TVIX, UVXY - back on the slide

With US equities breaking new multi-month highs, the VIX cooled across much of the week. The 2x lev' bullish VIX instruments of TVIX and UVXY saw significant net weekly declines of -15.3% and -16.6% respectively. Near term outlook offers some equity cooling, but not likely enough to break the VIX beyond the 16s.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a net weekly decline of -11.3%.

As for TVIX and UVXY, the declines were not surprising considering the VIX melted back to the mid 13s.. along with sp'2087 and Dow 17962.

The ultimate issue is whether the current 'melting lower' trend will continue for days, weeks.. or even months (in the case of Dow >18351, sp >2134).

*yours truly remains long TVIX... and my one solace is that at least I didn't buy above $5.. which itself looks a tough upside target to hit next week.

It should be clear.. if US equities are able to drive above Dow 18K.. with sp'2120s.. it will be 100% white flag waving time. If we see those levels, I would likely implement a 'no long VIX' rule for the rest of the year.