Always consider hidden risks
China ETF Volatility Index and SP500: Still at Critical Level?
April 18 2016 ( From TradingView, CNN Money )
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In times of almost full confidence from investors and speculators,
it is interesting to check the relationship between the ratio of the
CBOE China ETF Volatility Index to the VIX index compare to
the Mighty SP500.Usually, when we have a spike in this ratio near or over the
1.88 treshold ( See chart below - Amber Trendline and Grey Vertical Lines), quite often, we have a correction or consolidation in price from the SP500... Also observe that this ratio (CBOE China ETF Volatility Index to the VIX) is near the Resistance Trendline that started back in April 2015. (See chart below - Top Panel - Yellow Trendline) Also interesting to note the Fear and Greed Index from CNN Money as of April 15 is at the Greed Level still.
But the most interesting technical factor is that at the time we are testing the major Resistance Trendline that started back on April 2015 for the ratio of Volatility, we are at the support trendline on the CBOE China ETF Volatility Index (See second chart below - Yellow Trendline) and kissed the resistance trendline for the Mighty SP500.
( See chart below - Bottom Panel - Yellow Trendline ) No coincidence at all...
China ETF Volatility Index and SP500: Still at Critical Level? $SPY, $SPX, $VIX #Trading #Investing #VIX #SP500
CBOE China ETF Volatility Index over VIX Index (Top Panel)
7 DMA (Red Line)
SP500 Index (SPX - Candles - Bottom Panel)
CBOE China ETF Volatility Index (Top Panel)
7 DMA (Red Line)
50 DMA (Yellow Line)