Friday, 2 December 2016

TVIX, UVXY - short term upside

With equities broadly lower across the week, volatility was on the rise. The 2x lev' VIX instruments of TVIX and UVXY saw net weekly gains of 8.0% and 8.2% respectively. Near term outlook threatens further equity cooling to the sp'2160s, which would equate to VIX 16/17s.

TVIX, daily

UVXY, daily


First, an update on the VIX, which saw a net weekly gain of 14.4%.

As for TVIX/UVXY, short term gains amidst the usual mid/long term horror.

If sp'2160s.. with VIX 16/17s... TVIX/UVXY should see another 10/15% higher

There is little reason that the VIX will be above the key 20 threshold for the remainder of the year.

As ever, the 'statistical decay' is a relentless problem, and holding overnight, across the weekend, or worse... multiple weeks, rarely ends well.

*yours truly has ZERO interest in being long volatility, as the broader US equity market remains outright bullish. That view only changes if sp <2130, Dow <18k.