FINANCIAL ICEBERG
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SP500 Full Risk On Behavior?
October 11 2016 ( From  TradeView, CNN Money )
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​​​
​​​The market participants never gave attention to that divergence that ​started from
August 15 2016 week ​​til now between Risk Taking ​behavior (stronger) and ​the ​
​Mighty ​SP500 Index that is unable to make new high since then. Observe that the
SP500 Index is ​within ​a new rising wedge technical pattern.
 ​​​​​​​​
​(See chart below - Bottom Panel - Yellow Trendlines).

That Risk Taking behavior (according to the ratio of SP500 High Beta stocks -
​SHBP ETF - to the SP500 Low Beta Stocks - SPLV ETF) is at the highest level
since November 2015.
(See First Chart Below - Top Panel - Candles)

​​​​The divergence is quite obvious on that weekly chart. As we reach now new highs on the Risk behavior pattern (ratio of High Beta Stocks to Low Beta Stocks on the SP500), the SP500  didn t confirm yet. In fact, the risk taking behavior is at the highest since November 2015 and the Fear and Greed Index  from CNN Money is coming from ​Greed Zone in mid-August and is now at the Neutral Level of 51 (was in the 30s in November 2015), another divergence with that risk taking behavior!


But honestly, a few things puzzle me on that market behavior on the SP500 lately:

1) SPHB ETF (PowerShares S&P 500 High Beta Portfolio) reached a new high on this up cycle this year on October 5 at 33.53 as it did reach and test the Daily Resistance Trendline of a Rising Wedge. 
​(See Second Chart Below - Blue Trendlines)
SPHB ETF is at +12.5% above the 200 DMA ​(Day Moving ​Average) as of the ​close of ​October 7 2016 and SPY ETF is only at +4.1% above it s 200 DMA.​

​​​​2) SPLV  ETF (PowerShares S&P 500 Low Volatility Portfolio) reached a new high ever as of July 14 2016 and is in a slow bleeding behavior since then. Contrary to the SPHB ETF (who is within a Rising Wedge), SPLV ETF is trading in a Daily Falling Wedge Technical Pattern. And also completely contrary of High Beta Stocks ETF (which are testing the Resistance of a Rising Wedge), SPLV ETF is testing the Daily Support Trendline of that Falling Wedge. ​(See Third Chart Below - Blue Trendlines) 
SPLV ETF is at +0.4% above the 200 DMA ​(Day Moving ​Average) as of the ​close of ​October 7 2016 and SPY ETF is only at +4.1% above it s 200 DMA.​


What we must realize is that the market is full Risk On. Not only that... The market is full Risk On with the most High Beta exposure stocks (Technology, Social Media, Biotech...) at a time (historically speaking) that the seasonality in terms of Volatilty is increasing (VIX) and pressure arise for the SP500 Index.

That tells me how convinced (or complacent?) market participants are about the market potential​​​ in terms of risk reward on a short term basis.
SP500 Full Risk On Behavior?   $SPY  #Trading #risk #spy #investing #stocks

Financialiceberg.Com
Weekly RATIO
High Beta - Low Beta ETFs​ ( Bar - Top Panel )
​SP500 ( Candles - Bottom Panel )​
Daily Chart
SPLV ETF (PowerShares S&P 500 Low Volatility Portfolio - Candles)​
​20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​​
Volume ( Blue Area)​
Financialiceberg.Com
Financialiceberg.Com
Daily Chart
SPHB ETF (PowerShares S&P 500 High Beta Portfolio - Candles)​
​20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​​
Volume ( Blue Area)​