TVIX, UVXY - failure to detonate

Despite the indexes falling around 1.5% on the week, the VIX slipped lower by 11%. Both TVIX and UVXY suffered as a result, and closed the week in a very disappointing manner. The one consolation is that the TVIX/UVXY lows from October were not taken out.


TVIX, daily

UVXY, daily

VIX, weekly

Summary

A very bearish week in the markets, yet the VIX itself declined a very bizarre 11% on the week. This market remains almost entirely fearless in the immediate term. It is important to recognise that VIX futures in the further out months are still holding up in the mid 20s.

As has been the case since the VIX floored in early August @ 13.30, the doomer bears are seeking an explosion in volatility.

Despite the index decline from sp'1474 to sp1343 (this Friday's low), the VIX has surprisingly failed to break above the key 20 level.


Waiting to chase @ 20.

In many ways, the smarter - and arguably more patient traders, will be waiting to chase TVIX/UVXY higher, once the VIX breaks back over the important 20 threshold

My best guess is that VIX 20s will be seen in early December, whether we can spike into the 30s..and beyond, that IS the ultimate question right now.

TZA - small caps still falling

With the main market still in a multi-day decline, the Russell small cap (3x leveraged) bearish ETF TZA climbed a further 1.5%, and closed @ 18.63. This is the fourth close above the important $17 level, with the next key level being around $20.


TZA, daily

Summary

TZA floored the day after the Bernanke announced QE3, and has been generally climbing ever since, from the lowly level of $13.35.

Next target is $20, although..since TZA is a leveraged instrument, charting such things is rife with inherent issues.

Regardless, the general  trend remains UP, and even though today's candle was a slightly fat doji - often signalling a top, a reasonable stop level would be the daily 10MA @ 16.88, which will rise to the low 17s at the Friday open.

FB - another stupid bounce

Facebook (FB) saw a major bounce as a combination of factors synced together, with FB closing 12% higher @ 22.28. Just like the stupid 25% gain of Oct'24th, this gain won't likely hold either.


FB, daily

Summary

So, another 1.3 billion shares of FB are now unlocked, and there will be a lot of major institutions now in the process of trying to dump their trash to a willing idiot, ASAP.

Tomorrows price action in FB will be interesting to watch. If FB closes red, then FB back in the teens looks very feasible within days. However, it might take 3-5 trading days for the underlying MACD (blue bar histogram) momentum cycle to level out.

For those looking to re-short the FB, a little patience, would be useful.


Original downside targets, still on track

First target remains a break of the multi-month support @ 17.55. A break of that level should open up a very swift decline to 15, and then 12/10.

That is still viable by year end.
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FB remains laughably overhyped by the media, and overvalued by the algo-bots.

Fair value remains $4, and I would still not be a buyer, even at $1.25 (yes, that's one dollar, and 25 cents).