The nice thing about the advent of inverse ETF’s is the ability to use them to give you a heads up about new buy or sell signals in the indexes that they might track. According to the chart below, XIV is not a ‘buy’ in the daily time frame. This brings into question the recent ‘buy’ signal on the $SPX and the recent ‘sell’ signal in the $VIX via the 9/20 method. No doubt the ETN’s have a wee bit more decay than do other ETF’s, but even so if the $VIX is a ‘sell’ then XIV should be a ‘buy’, but it’s not.
One encouraging thing about XIV is that it has been rising on increasing volume and today it came down on lighter volume. Other than that I just don’t see much to get excited about here. Unless the market falls off a cliff between now and the end of the week, XIV could get a ‘buy’ signal using the 9/20 method by Thursday or Friday, but until then I think XIV’s weakness is a ‘no confidence’ vote for the current market move, IMHO, of course.
Chart courtesy of StockCharts.com
A couple more things:
$BDI fell off a cliff today. Not the end of the world, but…
Ceridian came out last week with a not so encouraging report.