Always consider hidden risks
SP500 Macro Tecnicals: From Break Out to Breakdown ?
August 24 ( From Tradeview )
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We have been in one of the most Bullish Stock Market in history
since 2009. The Mighty SP500 Index from a low in March 2009
of 666.79 to the high ever on May 2015 at 2134.71 rose by a
factor of 3.2 spurred by low interest rates and strong buybacks
from US corporations.
But lately, the Mighty SP500 start to be a laggard among their main
World Indices as you may see in the Charts below.
From the Nikkei break out in September 2014 to the DAX in January
2015 and the Hang Seng Index in April 2015, even the FTSE 100 in
May 2015, they all made Break Out. In fact, the SP500 was getting
seriously late at this party...
The main reason for that underperformance of the Mighty SP500
Indext was the strenght of the US Dollar Index which broke out, like the Nikkei in September 2014...
Most World Stock Markets were trading in a Rising Wedge Pattern on a Monthly Basis as shown by the charts below. Only the Nikkei is the survivor on that financial turmoil. Most of the others are already in a Breakdown Technical Pattern on the Support Trendlines of those Rising Wedges, IF they do close at those levels at the end of the month. IF so, will have the confirmation of a Major Technical Rejection; a previous False Break Out.
( See 5th chart Below - SP500 Daily - Grey Trendline )
But the most interesting factor is the correlation between the Mighty SP500 Index with the US Dollar Index (DXY). And we were in the last few days already into the zone where we usually at risk to see a short term market downleg as history suggest. ( See last chart below at the bottom - vertical lines )
"Chance favors the prepared mind."
SP500 Macro Tecnicals: From Break Out to Breakdown ? $SPY, $SPX, $SP500 #Trading #Investing #SP500 #dxy
Break Out in September 2014
Break Out in January 2015
Break Out in April 2015
Break Out in April 2015
Breakdown of the Rising Wedge
The Guilty: US Dollar Index
Break Out in September 2014 ( Minor Trendline - Red )
Break Out in November 2014 ( Major Trendline - Blue )
Broken 200 DMA ( Day Moving Average - Green Line )
Breakdown of a Rising Wedge Support Trendline ( Red Trendline )
SP500 Index ( Candles )
Correlation SP500 Index with US Dollar (DXY) ( Line Chart - Bottom Panel )