TVIX, UVXY - rough end to the week

With equities snapping higher, the VIX was whacked lower, and for the 2x bullish instruments of TVIX & UVXY, it was a rough end, to what had earlier been a particularly good week. Across the week, TVIX/UVXY declined by -2.3% and -1.7% respectively.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX weekly.

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So..the week concludes with the VIX lower by 8.5%, and TVIX/UVXY slipping around 7%.

With the main equity market likely to close the year somewhere in the mid sp'1800s, the VIX is very likely to steadily decline into year end.

If that is the case, then TVIX/UVXY..will similarly decline, and suffer from the added old problem of decay.


Looking ahead into 2014

I see a moderate equity down wave of perhaps 5-7% in late Jan/Feb, but even that won't last long.

I am personally more focused on trading the next bigger down wave...with an intermediate top in late spring..and then 20% of equity downside..no later than Aug-Oct.

Arguably..next April/May will be the first reasonable period to consider going long volatility, but even then, the VIX is a tricky one to trade. It never stays high for very long.