XIV Is Bending but not yet Broken
Trade idea: I will continue to look for short term trades on the XIV in both directions. I will, however, remain on my toes and attempt to stay nimble during what may prove to be a rather complex wave pattern, writes Mike Golembesky of ElliottWaveTrader.net.
Last week the Velocity Shares Daily Inverse VIX Short Term ETN (XIV) moved up into the 83.07-93.56 resistance zone before turning back lower hitting a low of 76.07 on Tuesday, September 5. Since this low, we have seen the XIV move back higher in what is so far counting best as a corrective wave structure. This move higher has held the 76.4 retrace of the move down off of the September 1 high. We have, however, yet to see further follow through to the downside, thus not yet giving us confirmation that we have indeed begun the next swing lower on the XIV.
While I always keep an eye on the spot VIX charts, I typically defer to the chart that I am actually trading in regards to the price levels. I do have to note that price action on the spot VIX chart has been extremely interesting over the past several weeks.
After topping on August 11 at 17.35, the XIV had retraced down to a low on September 1.