TVIX, UVXY - disappointing end to the week

With the indexes melting higher across Friday, the VIX slipped lower. Naturally, both the leading 2x bullish VIX instruments of TVIX and UVXY closed lower. The bigger VIX weekly chart offers the small hope of further significant upside next week.


TVIX, daily

UVXY, daily

Summary

First, a reminder on the VIX weekly chart, where we saw a gain of almost 14% on the week, although this was far below the highs of Thursday morning , when the VIX was in the low 16s.

Massive trading volume

The most noticeable thing right now about ALL the VIX instruments is the trading volume. Since the index reversal on Wednesday, volume has surged. Even the Friday volume was still above average. Are the big players just hedging some of their long equity positions? I'd guess that is partly it.


Looking ahead

The weekly VIX chart is set to go positive cycle next week, and that does offer the small hope that we'll be back in the VIX 16s....and possibly 17/18s.

However, considering the continuing Fed POMO program, and the index charts, I find it implausible to consider the VIX will be in the 20s any time soon. Indeed, I think the doomer bears will be lucky to see VIX break 20 in early May.

If that is outlook is broadly correct, we'll see further consistant, and significant decline in the VIX instruments.