FINANCIAL ICEBERG
Always consider hidden risks
​
 TECHNICALS
US Dollar and SP500: At Technical Crossroads?
 May 23 2016 ​( From TradingView , CNN)
If you would like to receive our free daily markets updates, please Sign-Up









The Situation

​


​​​​In these neutral times (good to know that​​ the Fear and Greed Index 
​from CNN Money is coming from the Greed Zone a month ago
​to the  Neutral Level now at 56). It is interesting to look the behavior 
​(correlation) ​of the US Dollar ​​(USD-DXY) ​and the Mighty ​SP500 Index.

​​​​As shown by the chart below, this correlation tells that the risks have 
​not ​started ​to be fully priced into the foreign exchange market yet in terms of volatility: expect more volatility in the US Dollar and SP500 in the next few sessions...​​

​​​​​DXY/SP500 correlation getting below the -0.70 zone on May 19 ​2016, ​indicating higher volatility ahead as history suggest... (See first chart below - Middle Panel - Blue Area - Vertical Lines)
​
​​​The US Dollar Index is within a Downtrend Channel (See first chart below - Top Panel - Channel) but most importantly at the Resistance Trendline that started back since January 29 2016 (See first chart below - Top Panel - Ellipse): Breaking that Channel Trendline will increase tremendously  the Volatility of all US Financials Assets. 
​
​For the SP500 index, it started a Bullish Trend from an almost perfect double bottom (January 20 and February 11 2016)  and failed to break yet the Resistance Trendline that started back on April 21 2016. 
​(See first chart below - Bottom Panel - Channel) 
​
​​So both the US Dollar Index (DXY) ans the SP500 are within a technical set up that call for a  higher Volatility environment as history suggest according to the DXY/SP500 correlation.


​




US Dollar and SP500: At Technical Crossroads? $SPY, $SPX,  USDX  #Trading #dxy  #usdollar #SP500
#spy 




US Dollar Index - DXY ( Top Panel )​
CORRELATION​
DXY over SP500 Correlation ( Middle Panel )
​​SP500 Index ( Bottom Panel )
​








Financialiceberg.com