TVIX, UVXY - just another day of pain

With the equity indexes climbing into the weekend, the VIX naturally saw another smack down  - especially in the closing hour. The 2x (bullish) VIX instruments of TVIX and UVXY saw significant declines of 9.4% and 10.3% respectively. Near term outlook looks somewhat dire.


TVIX, daily

UVXY, daily

Summary

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

With the VIX dropping over 11% this week, the equity bulls are back in control. VIX looks set for lower levels next week, perhaps the 12s.

The big question is whether Bernanke will upset the markets next Wed/Thursday - as his last two 'little chats' have done.

Weekly index charts are suggestive of broad upside into the low/mid sp'1700s by early August. If that is the case, VIX in the 11s...even 10s looks viable.

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As ever...such leveraged VIX instruments are for short- term holds only. Even a week or two of sideways chop is enough to knock TVIX/UVXY down by 5-10%, purely via statistical decay.