Friday, 30 September 2016

TVIX, UVXY - just a little higher

Whilst equities saw some swings this week, the VIX remained broadly subdued. The 2x lev' bullish instruments of TVIX and UVXY settled net higher for the week by 0.5% and 1.0% respectively. Near term outlook offers a touch of upside on Mon/Tuesday, but broadly... the relentless decay will continue.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a net weekly gain of 8.1%

As for TVIX and UVXY, most notable this week... new historic lows early Thursday, a major reversal (due to a spooky Deutsche Bank news story), but then renewed cooling into the weekend.

The underlying problem of statistical decay should remain clear.

For the more adept day-traders out there, such instruments can be used, but holding overnight, or across multiple weeks.... that almost always ends badly.

Yours truly continues to see the VIX-long trade as dead... with zero intention of being long volatility until at least late spring 2017. That view only changes if the market breaks below sp'2050, which really doesn't look likely.