Friday, 10 June 2016

TVIX, UVXY - climbing into the weekend

With equities cooling, and the VIX significantly higher, the 2x lev' bullish instruments of TVIX and UVXY ended the week on a strongly positive note, resulting in net weekly gains of 20.5% and 21.0% respectively. Market volatility looks set to broadly climb across June, as equities will likely at least test the key low of sp'2025.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a sig' net weekly gain of 26.4%

VIX looks set for the upper teens next week. If the sp'2025 low is broken - viable in BREXIT week, then equities will accelerate lower, and that would result in VIX spiking into the 28/35 zone.

As for TVIX and UVXY... as I noted last weekend, the declines since the Feb' highs have been relentless.

Even if the VIX battles into the mid/upper 20s.. that will only see TVIX/UVXY claw back a portion (30/40%) of the declines.

TVIX in the $4/5s looks viable this June, but anything much above 6/7 will be very difficult, even if the market breaks under sp'2K.