Gold breaking 1200 would send it down huge.
Now I sold calls against my position and will let it be assigned or expired this Friday.
reversal in the markets and it will begin this Friday. Today UVXY will close slightly positive after down open. Thursday flat and Friday up to $13. Next week we'll hit $17 as the market pulls back.
My quant analysis seems to be working.
Computer is analyzing technical trends in 20 largest GDX positions cross-referenced with social media flows to come up with the sentiment score.
You have to recognise that the pain trade is now lower and that is why we move lower. Many are trapped at higher levels in this decline and will be giving up slowly
Leverage cuts both ways.
Just wait until they roll over. It will be fun watching it take the elevator down.
But not before it gets killed in the contango roll down to $7-$8.
32% loss just on contango unless market completely falls apart.
Aug 25th, 2015 VIX (front month) hit 27. UVXY is holding 18s right now and will be buying 20s.
That would be only 3x 10%. For UVXY it would imply compound rising of front month VIX by 20%. So it would top out at $25.
But you are talking about nailing the market correction to the T on this kind of move. What is the probability of that. What if market crash doesn't happen but we kind of move along slowly down and sit for a few months. Then UVXY decays from the movement and gets destroyed by contango.
Their economy is imploding and we are about to experience huge deflation. Typically in this environment all asset classes end up losing money
When that happens you are looking at $9 .
That is 30% loss for UVXY on the rollover. Now most of the VIX futures they hold are 17.20. Those can rise a bit from here, but we are in the boring market so it won't stay that elevated.