Thursday, 10 August 2017

TVIX, UVXY - a powerful day higher

With equities closing significantly lower, there was powerful upside in volatility. The 2x lev' bullish VIX instruments of TVIX and UVXY settled higher by 26.8% and 26.9% respectively. Near term outlook offers sp'2435, which should equate to VIX at least another 1-2pts higher in the 17/18s. The key 20 threshold is a serious (if brief) threat.

TVIX daily

UVXY daily


Special update on the VIX, currently net higher for the week by a hyper powerful 59.9%

I have generally refrained from highlighting any of the VIX instruments since summer 2016, not least as the VIX-long trade has been frankly... dead.

With the sp' swinging from 2490 to 2437, things are getting a little interesting, and we've seen the VIX surge from the 9s to the 16s.

A three day series of gains have clawed TVIX and UVXY back to levels from early July. The mid May highs look out of range, unless next Monday sees a mini-crash to sp'2350/25 zone... which on balance, is extremely unlikely.

As ever, holding across multiple days or certainly - weeks, is extremely problematic for any leveraged instrument.