Since July 2014, XIV has been in a classic corrective pattern, whereby wave (A) ended in October 2014 and wave (B) seems about to end shortly. The following wave (C) is expected to target values below 25. XIV is very sensitive to both the so-called fear index VIX (tracking its inverse) and the market as exemplified by SPX.
The correlation of XIV and SPX was very high until July 2014, lessening afterwards (some slight negative divergence apparent at times) due to the effect of the dollar index on VIX.
The correlation of XIV and SPX was very high until July 2014, lessening afterwards (some slight negative divergence apparent at times) due to the effect of the dollar index on VIX.