Friday, 13 January 2017

TVIX, UVXY - another week lower

With the US equity market still regularly breaking new historic highs, market volatility remains very subdued. The 2x lev' bullish VIX instruments of TVIX and UVXY saw net weekly declines of -5.8% and -5.9% respectively. Near term outlook offers little realistic hope that VIX will even break into the mid teens.

TVIX, daily

UVXY, daily


First, an update on the VIX, which saw a net weekly decline of -0.8%

As for TVIX and UVXY... there is nothing to be said other than 'normal service' continues.

*UVXY saw a rev' split of 1 for 5 - as of the Jan'12th open. No doubt...TVIX will follow, although nothing is scheduled right now (that I'm aware of).

As ever... holding such leveraged instruments overnight, across the weekend, or worse... across multiple weeks rarely ends well, due to a number of issues, not least 'statistical decay'.

Yours truly sees the VIX-long trade as dead, and has ZERO interest in being long the VIX for some months ahead.

Yes, there will be sporadic spikes to the mid/upper teens, and perhaps even test the key 20 threshold this spring. Yet broadly, the US equity market is unquestionably super strong, and that will see the VIX pinned low.