FINANCIAL ICEBERG
Always consider hidden risks
 TECHNICALS
A Volatility Divergence for SP500 ? The Sum of All Fears ?
June 8 ​( From FRED )

If you would like to receive our free daily markets updates, please Sign-Up



Average of all 5 Volatility Index / 5 ( Candles )
​CBOE Interest Rates Volatility Index
​CBOE China Markets ETF Volatility Index
CBOE EuroCurrency ETF Volatility Index
​CBOE Gold ETF Volatility Index
CBOE Emerging Markets ETF Volatility Index

​SP500 Index Volatility ( VIX - Bar Chart at the Bottom )​​
​​​​So we will see below six different volatility index ( from stocks to currencies
​to ​emerging ​markets ) ​that will give us a broad view in term of risks...

The volatility of the US domestic market is in the low historical band -
​a sign of complencency. But the Currency markets and China is giving the
​signs of a turnaround into the Volatility of US Stocks...

​Volatility of Different Asset Class


Already 3 Volatility Asset Class is rising fast lately: US Interest Rates Volatility Index, China Markets ETF Volatility Index and the  EuroCurrency ETF Volatility Index. One that did move the least is the SP500 Volatility Index know as the VIX as shown by the chart below.
CBOE Interest Rates Volatility Index ( White / Right scale )​
​CBOE China Markets ETF Volatility Index  ( Pink / Right scale )​
CBOE EuroCurrency ETF Volatility Index   ( Blue / Right scale )​
​CBOE Gold ETF Volatility Index  ( Green / Right scale )​
CBOE Emerging Markets ETF Volatility Index  ( Yellow / Right scale )​ ​
SP500 Volatility Index ( Red / Left scale ) ​
Conclusion

May be volatility is giving us a pre-warning on the markets... We can t say that ​Mr Market didn t prevent us from being too complacent...​​​The VIX Index is too low compare to the other Volatility metrics.

​SP500 Index ( Bar Chart at the Top )
US Dollar Index ( DXY - Area Chart at the Top )​

US Dollar Index Volatility ( DXY - Blue Line)​​
CBOE Interest Rates Volatility Index  ( White Line )​
​SP500 Index Volatility ( VIX - Yellow Line at the Bottom )​​

Average of all 5 Volatility Index / 5 ( Candles )
​CBOE Interest Rates Volatility Index
​CBOE China Markets ETF Volatility Index
CBOE EuroCurrency ETF Volatility Index
​CBOE Gold ETF Volatility Index
CBOE Emerging Markets ETF Volatility Index

SP500 Index​ ( Bar Chart at the Bottom )​​



And as the sum of all fears : taking the Historical Volatility of the US Dollar Index (DXY) combined with the US Interest Rates Volatility Index shows that the VIX Index tell me a lot of complencency for the SP500 as shown by the graph below...

​​But what the market participants are missing completely was that volatility is already reaching the warning zone as shown by the chart below ( Ellipses )...
tatisticCode" src="Scripts/stats-tracking.js">

A Volatility Divergence for SP500 ? The Sum of All Fears ?   $SPY, $VIX #VIX #SP500

Financialiceberg.Com
Financialiceberg.Com
Financialiceberg.Com
In fact, to see it more clearly, I did an average of the 5 Volatility Index from different Asset Class ( Candles on the Chart Below ) to compare it to the VIX Index ( Bar Chart at the Bottom of the Chart Below ).
Rising Volatilites usually is bearish on Equities as shown by the Vertical Lines on the Chart Below.