Tuesday, 28 June 2016

TVIX, UVXY - increasingly volatile

With the VIX settling lower for a second consecutive day, the 2x lev' bullish instruments of TVIX and UVXY were naturally on the slide, settling lower by a very significant -21.3% and -23.8% respectively. Near term outlook offers a Wednesday reversal.. with renewed upside into early July.

TVIX, daily

UVXY, daily


Having imploded from February to early June, the VIX instruments continue to attract a lot of attention.

TVIX looks vulnerable to the 2.30/2.20s, but with subsequent upside to the 4s, possibly 5s on a very brief spike - which would likely require VIX 30s.

UVXY looks vulnerable to the mid/low $11s... with viable upside to the 18/21 zone.

As ever, long term holds in such leveraged instruments never ends well.

Also.. one tragically ironic aspect of higher volatility... the 'statistical decay' problem is worse.

Yours truly is more focused on shorting equities and long-Gold, and I'll likely refrain from meddling in the VIX for the next few weeks.