Friday, 25 November 2016

TVIX, UVXY - a third week lower

With equities breaking new historic highs, the VIX continued to cool, with the 2x lev' bullish instruments of TVIX and UVXY both settling lower by -8.2%. Near term outlook offers little realistic hope of any significant climb in the VIX, with TVIX/UVXY set to broadly decay into early 2017.

TVIX, daily

UVXY, daily


First, an update on the VIX, which saw a net weekly decline of -3.7%.

As for TVIX and UVXY, it was merely a week of further decay, as the VIX remains subdued in the 13/12s.

At best, the most realistic retrace for the equity bears is a test of the 50dma, which by mid December will be around sp'2165/70. That might briefly equate to VIX 16/17s. Anything >20 looks highly difficult, as the equity market is regularly breaking new historic highs.

*As ever, such leveraged instruments suffer from near relentless decay. Holding overnight, across the weekend, or a few weeks, rarely ends well.

**yours truly has ZERO interest in being long-VIX, as the equity market looks set for broad upside into early spring 2017.