Market will correct in the next 4 weeks. If this happens in May (without any real negative data), its likely 3-7% correction. If it happens after NFP, its likely 10-15% correction.
During the correction spot VIX will spike to 20+, about 50% increase from current levels. UVXY (although double exposure, due to 30 day spot VIX tracking) will go up 50-60%. Based on Aug 3-8, 2011 (^VIX doubled); Oct 28-Nov 1 2011 (^VIX up by 50%)
If the market doesn't correct in summer, we will likely get a huge drop one day (87 type crash, with circuit breakers they will try to minimize stock losses, but VIX will shoot up, during 87 crash spot vix shot up to 170+), if that happens UVXY will shoot up like crazy and all the people sitting pretty with their UVXY shorts will be forced to cover at insane prices.
In any case, UVXY will reach its highest price within 3 days, you have to be glued to screen and sell. After the criss is over, it will fall back to previous levels and then continue bleeding towards 0.
JPY carry trade getting busted. Big boys will try to keep the S&P futures losses as low as possible, they will short VIX futures and try to get cheap protection as they try to get out. But once the demand for protection increases, the VIX will spike, and the demand for these ETF/ETNs will soar due to liquidity and access.
if the NFP on 06/07 disappoints, serious damage is on the cards. All these days of destroying shorts can lead to a bid-less market, look out below !
That is exacty why it is crazy to be short this right now or at least to hold short overnight as if we did have another day like in 87 you could possibly lose everything you have. You could be down 5-10X your investment in day which would be devasting to ones portfollio.