TVIX, UVXY - big bull flags

With the market seeing significant weakness in the closing hour of the week, the VIX flipped back to positive. The 2x bullish VIX instruments of TVIX and UVXY both closed 1.3% higher. Price formation looks to be a rather clear..and large bull flag. Significant upside appears likely next week.


TVIX, daily

UVXY, daily

Summary

First, a reminder on the VIX weekly chart...

So, across the week, the VIX declined by around 7%. Yet the Friday equity/VIX price action looked particularly in favour of the equity bears.

If today was a key reversal day, then the next 5-7 trading days should effectively be broadly downward, with sp'1580/70s.

That should equate to VIX in the low 20s.
--

In terms of TVIX/UVXY, that should probably offer a good 25/30% higher.

As ever though, when the indexes floor this September...and the VIX tops out..it will be imperative to exit the leveraged instruments..not least for issues of decay..never mind the trend!