As compared on the 5min chart, TVIX and UVXY were trading in synchronized fashion until the close of trading on February 21st. After the close on that day, Credit Suisse announced a suspension of further TVIX issuances:
This resulted in TVIX trading at a premium starting on February 22nd. In another recent example, GAZ, a Natural Gas futures ETN traded at an extreme premium.
"Premiums occur when a fund is no longer able to create the shares needed to satisfy demand, ultimately capping the fund's growth. In essence, GAZ has begun to trade like a closed-end fund."
An extreme bubble formed in GAZ. TVIX is a much larger ETN than GAZ. There are some similarities in that both GAZ and TVIX issuances were suspended after a long downtrend on the Daily charts.
It is unclear what will happen to the current premium in TVIX going forward. Ultimately, as long as issuances are suspended, it depends on the balance of supply and demand characteristics which are influenced by various factors including market conditions, behaviour of the VIX and VIX futures etc... Another consideration is whether an accumulation of short interest in GAZ resulted in a subsequent short squeeze.
In any case, an understanding of the facts, and a prudent approach is required considering the uncertainties involved going forward.
An extreme example of an imbalance can be seen in the recent GAZ bubble.