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Is the XIV walking on a tight rope? Well.... This hasn't happened yet!

There's been a notable rise in popularity of this ETN that shorts volatility, over the last few years. When I started studying this product in 2014, I recall it only having about 3,000 or so followers on StockTwits. Today, that number has more than doubled to about 8,000 followers. In comparison, the VXX ETN that goes long volatility, has about 12,000 followers on StockTwits. So what does this mean? It simply means that more and more retail traders/investors are starting to gain interest in XIV. This is mainly driven by the remarkable returns this product has seen in a short period of time. Since the election on 11/4/16, the XIV is up more than 150%! 5 year returns are over +500%!

So, after all these impressive returns, is XIV walking on a tight rope? Lets take a look at some interesting data points:

The first data point that makes my antennas go up, is that the VIX has entered a period a seasonal strength. This means that based off seasonality, XIV has entered a period of weakness. See chart below:

The second data point is that the XIV is on a record breaking winning streak. XIV has finished higher for a record 8 months in a row. This has never happened before in this ETN's history! Can this streak continue? Sure, but the longer it goes, the bigger the drop will be when this streak ends.

The third and most remarkable data point is that the XIV hasn't seen a -25% drawdown this whole year. This is incredible given the fact that there's been a -25%...