VelocityShares Daily 2x VIX ST ETN (TVIX)

[gldtimer]

Contango => Backwardation...

Go to VIX central

http://www.vixcentral.com/

Notice the majority of positive or contango numbers, although a few negatives are starting to pop up in the early couple of months. Also note the upward sloping tail.

Then hit historical prices and you are sent back in time to 10/16/08 the market meltdown being in full swing, a complete backwardation market environment with all negative backwardation numbers and a downward sloping tail. Backwardation, if it lasts long enough will take TVIX back up to its IPO price and beyond!

What kind of TVIX bagger are you talking about Gldtimer?

A 10,000x bagger, if it all plays out in the direction my models are pointing.

The tail is significant in that it represents optimism (up) or pessimism (down) for future equity prices. Like a wave the body of the curve starts down first...this is only a correction, but then will transmits itself to later months (tail) as we head towards the Greater Depression.

Contango causes the price of TVIX to decay, but backwardation will cause the price of TVIX to explode.

Learner, if you would be so good to highlight this post taking down the 'cat' post I'd appreciate it.

I've got a busy schedule for next week and won't post until next weekend. I'll turn the board over to the day trading boys to hoot and holler like they do on Zircon-212...paraphrased by yours truly from the KV's classic Slaughter-House Five.

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The moral tale is about Earthlings who were kidnapped by extra-terrestrials. They were put on display in a zoo on a planet called Zircon-212. Trouble was the humans weren't much fun for the Zirconians to look at since they would only sulk and sit in a corner unhappy being held captive.

To solve the problem the Zirconians set up a big board supposedly showing stock market quotations, commodity prices, and TVIX-lol along one wall of their habitat, a news ticker, and a telephone that was supposedly connected to a brokerage on Earth. The creatures on Zircon-212 told their captives that they had invested a million dollars for them back on Earth, and that it was up to the captives to manage it so that they would be fabulously wealthy when they were returned to Earth.

The telephone and the big board and the ticker were all fakes, of course. They were simply stimulants to make the Earthlings perform vividly for the crowds at the zoo-to make them jump up and down and cheer, or gloat, or sulk, or tear their hair, to be scared shitless or to feel as contented as babies in their mothers' arms.

The Earthlings did very well on paper. That was part of the rigging, of course. And religion got mixed up in it, too. The news ticker reminded them that the President of the United States had declared National Prayer Week, and that everybody should pray. The Earthlings had had a bad week on the market before that. They had lost a small fortune in olive oil futures. So they gave praying a whirl. It worked. Olive oil went up.