Friday, 8 July 2016

TVIX, UVXY - a second week of horror

With equities climbing for a second week, the VIX continued to cool, with the 2x lev' bullish instruments of TVIX and UVXY seeing net weekly declines of -23.8% and -22.4% respectively. Considering that the sp'500 looks set to break up and away, the VIX could remain broadly subdued for the mid term.

TVIX, daily

UVXY, daily


First, an update on the VIX, which saw a net weekly decline of -10.4%.

As for TVIX/UVXY, a second consecutive net weekly decline, as the VIX has cooled from a BREXIT spike high of the 26s to the 13s.. literally cut in half.

Clearly, the VIX is now on the very low side, yet if equities are in the early process of breaking 'up and away', then the VIX can remain broadly subdued for many weeks... and indeed, many months.

UVXY is set for a reverse split of 1 for 5 at the July 25th open.

As far as I can tell, TVIX is not scheduled for a RS, but one is clearly due... and it will likely be on the order of 1 for 10.