Always consider hidden risks
SP500 Technical Behavior: Still Oil Driven?
February 22 2016 ( From TradingView )
If you would like to receive our free daily markets updates, please Sign-Up
In these extreme volatile times, it is interesting to look the
behavior ( correlation ) of the OIL price in relation to the
other Financial Assets.
As shown by the charts below, this correlation tells that the
risks in Financial Markets wordwide have been behaving
according to the OIL market. As the OIL market have become
more and more since the summer of 2014 as US Dollar
collateral for the main explanation for financial behaviorists.Market have become so nervous that the pure and simple Risk On Risk Off is in summary the way OIL price is evolving; a scary trend indeed...Just to show you how the market technical behavior have become lately, take a look at the first chart below (15 minutes intraday chart) between the Mighty SP500 Index ( SPY ETF ) and the Oil price ( WTI ).
Same trend, same spike, same correction phase...
Observe the positive correlation between the Oil price and the SP500 Index. It is staying in a high correlation zone. ( Second Chart below - Grey Line - Bottom Panel ) And this behavior is translating into a negative correlation between Oil price and the VIX Index.
( Third Chart below - Grey Line - Bottom Panel ) We must realize also that there is a negative Macro Correlation between the Oil price and US Dollar Index, as the Oil price is a pure collateral within that world globalization environment and that the market have been trading lately in a binary manner with the oil price... As the US Dollar Index was breaking out in September 2014, Oil price was breaking down. ( Fourth Chart below - Yellow Trendlines - Ellipses ) Oil price is trading within a falling wedge pattern as shown by the fourth chart below...
Read Also: The relationship between stocks and oil prices - Ben S. Bernanke
SP500 Technical Behavior: Still Oil Driven? $SPY, $OIL #Trading #oil #usdollar #SP500
15 Minutes Chart
SPY SPDR ETF ( SP500 Index - Candles - Right Scale )
Oil price ( WTI - Bar Chart - Left Scale )
Oil Price ( Top Panel - Candles - Right Scale)
SP500 Index ( Top Panel - Bar Chart - Left Scale )
OIL over SP500 Correlation
( Bottom Panel - Blue Area )
Oil Price ( Top Panel - Candles - Right Scale )
VIX Index ( Top Panel - Bar Chart - Left Scale )
OIL over VIX Index ( Bottom Panel - Blue Area )
US Dollar Index - DXY ( Top Panel - Candles )
Oil Price ( Bottom Panel - Bar )