Tuesday, 14 June 2016

TVIX, UVXY - a day of swings

With some moderate market swings (especially in the morning), it was a mixed day for the 2x lev' bullish VIX instruments of TVIX and UVXY, settling lower by -5.2% and -4.4% respectively. Near term outlook threatens some sig' cooling of around 15/20%... before viable hyper upside into end month/early July.

TVIX, daily

UVXY, daily


Pre-market saw TVIX in the $3.70s, but then a rapid cool down to $3.20.. only for another rebound, as the main equity market cooled to a new cycle low of sp'2064.

Yet... there was a clear divergence, as TVIX did not make a new high.

*same applies to UVXY.

Broadly, the VIX is warning of underlying market tremors. It remains VERY notable that we didn't even need to come close to the sp'2025 low to break back above the key 20 threshold.

VIX looks set for a move into the 30s... and if correct, that will likely result in TVIX/UVXY doubling up from whatever level they cool to in the next few days.