XIV - bearish volatility instrument on the rise

With US equities continuing to climb for the fourth consecutive day, the VIX was knocked significantly lower once again. The non-leveraged bearish VIX ETN of XIV settled higher by  8.0% @ $32.92.


XIV, daily

Summary

With the VIX getting smashed back lower from a cycle peak of 31.06 to the 16s, it is no surprise to see XIV rallying strongly from the recent 24s.

Indeed, there are two classic floor 'hollow red' reversal candles, the first with a very powerful spike, highly indicative of a cyclical floor.. aka.. a peak in volatility.
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Like the bullish VIX instruments of TVIX and UVXY, there are serious issues of long term decay for XIV.. although to a far lesser extent.. due to not being 2x leveraged.
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Near term outlook is for VIX to continue sliding lower, to the 15/14s... which will likely offer another 2-3 days of upside for XIV.. along with the broader equity market.