TVIX, UVXY - equity bear failure

With the bears failing to build upon last Wednesdays index declines, the main market is right back to algo-bot melt. The 2x bullish VIX instruments of TVIX and UVXY are thus back on the slide of decay, both slipping over 3% today. Outlook appears...grim.


TVIX, daily

UVXY, daily

Summary

First, keep in mind the VIX daily chart...

VIX is back in the low 12s, and looks set for the 11s, perhaps even 10s. Indeed, we have complete and utter market complacency.

As for TVIX/UVXY, even if the market just churns sideways for a few weeks, that will have very serious downside implications, probably in the range of 10-15%.

If my outlook for the broader market is correct, with Trans'7000 - and sp'1800s, then VIX looks set to have a chance of going sub'10 this summer.

If the hyper-bullish outlook is even broadly right, then TVIX and UVXY will decay by 50%, and that's probably an under-estimate.

As ever...such things are for short term holds only, and that includes periods when the VIX is low.