TVIX, UVXY - extremely powerful weekly gains

With equities seeing very significant net weekly declines, the VIX soared into the low 20s. The 2x lev' bullish instruments of TVIX and UVXY saw net weekly gains of 59.6% and 64.6% respectively. Equity outlook remains broadly bullish, and the VIX looks set to cool into early next year.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX... which gained a massive 78.3% this week

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*I had noted last weekend 'VIX instruments.. a dead trade'. Clearly, the title of that post now looks bizarrely ill timed. However, the point I had wanted to make was that.. yes, there will be sporadic spikes... but they will be brief... with the VIX not likely pushing much above the low 20s.
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This weeks move is merely another one of those periodic spikes.

As ever... the problem of decay remains.. and TVIX/UVXY will both be breaking the recent lows... certainly by late January.
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Broader outlook

I am seeking the equity market to build a floor early next week around the sp'2000 threshold. From there, first target are the sp'2100s.. by late January. That will very likely equate to VIX back in the low teens.. perhaps even 10s.. if Mr Market starts to fully realise the implications of sustainably low oil prices.

I do not see the VIX breaking the mid Oct' spike high of 31.06 for a very considerable time... probably at least until late spring 2015.