Stocks Climb, XIV Destroyed

Interesting day in the markets again today trading in a wide range with the SPY gapping down nearly 4 points to open at 259.94 and close 9 points higher near the day high above 269. The market seemed to be bracing for the worst and we opened lower there were quickly buyers stepping in to drive prices higher throughout the day. It actually gave the feeling that the market wants the selloff to be over. From a technical standpoint, it’s not unrealistic to have support where there was previously resistance, using the 259 area from November in the SPY for example. Nearly a 10% correction in the matter of a week. Certainly isn’t pretty, but would be acceptable to carry on from here and grind higher to continue the bull market. As usual, I’ll be observingĀ and letting the price action play out and decide which way it truly wants to go.

SPY Daily Chart

SPY Intraday chart

And as expected following yesterday’s after hours trading, the XIV Inverse VIX ETN got destroyed today and lost 92% of its value. I have no intention of ever getting involved in one of these VIX related ETF/ETNs, much less an overnight position. If you’re day trading and use short term momentum then it may work for you, but for holding overnight and longer term it seems like a potentially lethal move as seen today.

XIV Snapshot

And my trading plan remains the same, let the dust settle and continue to search for high volume weekly breakouts. Currently hanging onto ORIT from 16.75 and ERF from 10.41.