With US equities starting the year on a pretty bullish note, volatility was ground broadly lower. The 2x lev' bullish VIX instruments of TVIX and UVXY both saw a rather severe net weekly decline of -25.6%. Near term outlook offers little to the volatility bulls, as equities remain broadly strong.
First, an update on the VIX, which saw a net weekly decline of -19.4%.
As for TVIX and UVXY, there is little to add. Today's settlements were at new historic lows, but then, such instruments decay across the mid term anyway.
To me, the VIX-long trade remains dead. There are clearly going to be sporadic jumps in the VIX in 2017, but for now... even a brief move to the key 20 threshold looks out of range.
*TVIX/UVXY will likely be due another reverse split within 3-4 months.