Always consider hidden risks
SP100 Index ETF OEF: When Generals Get Nervous
November 03 2016 ( From TradingView )
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We just start to realize how deep the correction near the end of the month of June was on the US Equity Market and all that a courtesy of Brexit Fears. From the pre-Brexit close made on June 23 2016 at 93.30 on the SP100 Index ETF OEF (iShares S&P 100 ETF), to post-Brexit close 2 trading sessions after on June 27 at 88.79, a drop of 4.8%, a level reached in mid-March 2016. Rebounding from those technical levels was quite a statement from Mr Market but few of us realize that the the post-Brexit panic was in fact an opportunityfor portfolio managers to rebalance at the end of month/quarter from cash and bonds to stocks. Also,the relative flight to quality and liquidity was in strong favor of US Equities. Since then, an atypical rally occured as the Breakout on OEF ETF on July 8 2016 failed to bring much interest as trading Volume continue to shrink.We broke on August 10 2016 a Steep Rising Wedge (See First Chart Below - Blue Trendlines) and peak price was reach on August 15 so before SPY ETF (August 23). OEF ETF started a long Consolidation Phase in a narrow range but with Lower Highs and Lower Lows. We are now back testing the previous Daily Breakout Trendline so CRITICAL for Bulls to Hold. (See First Chart Below - Red Trendline - Ellipse).
In fact, the top 100 stocks of the SP Index is slightly outperforming the Mighty SP500 Index since July 22 2016 (Looking at the ratio of the SP100 Index ETF OEF over the SP500 Index) (Second Chart Below - Blue Line). Quite surprising that the top 100 stocks (know as the Generals) did not perform better than that into the breakout phase since July 8 2016.
At a time were the market start to price some risk mainly from US election, we should expect that the Biggest Capitalization (OEF ETF - The Generals) perform better in a lower Volatility set up than the SP500 Index.What strikes me the most is that as the Generals (SP100 Index ETF OEF) are slightly outperforming the Mighty SP500 Index ETF SPY since the breakout, the Volatility of the SP100 Index (CBOE VXO) is rising faster than the Volatility of the Mighty SP500 Index (CBOE VIX) on daily relative basis since September 2 2016 as shown by the third chart below. We are now at the Resistance Trendline that started back since June 5 2015!
In Summary, we have now Generals slightly outperforming as most of the soldiers of the SP500 Index, all that within a Rising Volatility set up..... Are the Generals too Nervous?
US Stock Indices Technicals: When Generals Get Nervous $SPY #investing #spy #SP500
SP100 Index ETF OEF
SP100 Index ETF OEF
SP500 Index ETF SPY ( Blue Line )
SP100 Index Volatility VXO
SP500 Index Volatility VIX ( Blue Line )