XIV
Long XIV @ 20.50
- VIX futures are back in contango (currently 4.5% from F1 to F2)
- SPY broke through resistance validating double bottom (see chart below). Although there are some upcoming resistance, SPY has momentum behind it. My assumption is VIX futures will remain in contango as a result.
- Since 1/20 SPY has increased ~9.6% where as XIV has...
VXX with completion of bearish Bat pattern.
27-28 is a daily resistance zone. A close below 28 can expedite the reversal in VXX
Pattern completion - 29
... without full conviction, but but the VIX suggests another LL . The last week in February would be strange.
The situation on $XIV:
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SVXY pays a price when VIX is high (>16).... even when SPY is increasing (see arrows). This is due to rollover but not to be confused with VXX decay due to contango.
Despite briefly dipping below 12, based on this chart interpretation the VIX is still poised for a rather large spike this summer. First trigger would be a move over ~14 then a push through major resistance ~19.50 - 20 would probably see a rapid ramp towards the low 30's.
This would roughly correlate to a 20-30% correction in the SPX.
Watch to see if the VIX can...
