TVIX - the maniacs had a chance to exit

With the main indexes having a second significant up day, the VIX instruments were effectively massacred today. VIX itself closed -14% at 17.20%, and as the Elder Impulse (I call it the rainbow) chart shows, we did get a pretty conclusive red candle to close the day. It would appear the VIX has a long way yet to fall, low bol' is 12.80..so, that would be one 'viable' target.

VIX daily, rainbow

Lets look at the usual suspects...

VXX, daily

UVXY, daily

TVIX, daily

The trio of horror

VXX, UVXY, and TVIX, fell 8.6, 17.2, 14.8% respectively. As it appeared (and I noted) on Wednesday, the holders had a brief opportunity to exit with 'something'. Instead, two things occurred...

1. The holders were holding for even better levels (which I can understand, but the indexes had clearly floored late Wednesday).
2. The existing holders were actually ADDING to their positions, 'averaging down'.

Well, that hasn't really worked out so well. and now..I can only imagine they are STILL buying these crazy VIX instruments. It remains amazing that just over 3 weeks ago, everyone (even some clown channel analysis) were suggesting a target of 0 for TVIX..and yet the maniacs once again have forgotton so quickly.

TVIX will doubtless get a reverse split soon enough, although the threat remains the ETN might just get closed entirely. Although I'd say no to that, since its probably a real money-maker for Credit Swisse.


Leave them alone

As I've said before - and it remains a rare thing to legitimately argue, option calls/puts would be a more reliable and better way for those who wish to play market volatility. Options sure suffer from the decay as well (although it can be mitigated depending on how far out you buy), but the upside is immensely higher...and all the VIX instruments generally fail to capture adequate upside.

Goodnight