TVIX, daily
UVXY, daily
Summary
Most noticeable for both TVIX and UVXY is the soaring volume. Now, that is at least 'significantly' due to the falling price. After all, you can now buy many more shares for the same money, as a result of the near incessant decay.
However, some of the volume ramp is surely attributable to real buying interest. With the VIX now in the 11s, there is very considerable upside, and arguably..only minimal downside.
A brief reminder on how the VIX closed this week...
VIX, weekly
Another 10% knocked off the volatility index, and we're now at levels not seen since Feb'2007. VIX in the 10s looks 'briefly' likely this week. The only issue is whether we'll briefly see a spike into the 9s..if only for mere minutes.
I do not expect VIX to stay at these levels for more than another week or two. My index outlook remains for the sp' to max out in the sp'1560/80 zone, before a retracement lower to at least the sp'1470s, no later than mid May.
If that is the case, I would have to think VIX has the opportunity to break the key 20 threshold. The only issue then will be, can the VIX break the 2012 high of 27 ?
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As is the case with all leveraged instruments, TVIX and UVXY are for very short term holds only. The typical VIX up cycle generally doesn't last more than a week or two. Even when the VIX has exploded in the past few years, the trend is always burnt out after a month.
