Nope yoyo is not an ETF with a number plate size moniker.
However, for anybody following the VIX and the associated volatility ETFs, yoyo does describe the price action.
Since I last reported, what is becoming my favourite volatility ETF, despite the fact that it is hard to pronounce, the UVXY, has gone from a high of 27.32 on 16-Sep followed by a 16% decline, followed by a 15% gain, followed by a 9% decline, and finally followed by a 15% gain in one night, being last night.
When I enlisted for participation with these volatility ETFs I didn't appreciate that the volatility applied to the ETFs as well. That is, I had it in my mind that the volatility ETFs simply reflected the market volatility.
I have been content to continue to hold these volatility ETFs as my medium term target is the UVXY price on 7-Aug-2014 of 38+. Reaching 38 would realise a 59% gain from my entry point on 27-Aug. However, as it is fun to dream, and practice with these volatility ETFs is perhaps vital, could the UVXY break out above the 7-Aug high of 38 to target the 5-Feb-2014 high of 108. Probably not, but it is not impossible.
Although the UVXY as an ETF has been putting in some solid moves, the VIX index, which is obviously a trading instrument as well, has been achieving bigger moves. Of course big movers require big volume to ensure that your trade cannot become stranded due to lack of liquidity. Last night over 22 million UVXY units were traded, compared to a 12 month average volume of 8.6 million per night. Hence, there is no chance of my pinprick on an iceberg size trades becoming stranded.
With Russell's recent death cross, Uri Geller doing his thing on the iphone 6, durable goods taking a decent hit last night, and other key market moving events recently, perhaps now is the time for the VIX and associated ETFs to break out. The significantly above average volume on the UVXY last night perhaps suggest so.
Not for the faint hearted, and not for those with poor capital management techniques, but it is a wild ride that can be a whole lot of fun.
