Always consider hidden risks
SP500 Index: US Dollar Driven ?
February 9 ( From TradingView )
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SP500 Index: US Dollar Driven ? $SPY, $USD, #Trading #Seasonalities #SP500
US Dollar Index ( DXY - Top Panel - Candles )
SP500 Index ( Bottom Panel - Bar Chart)
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 that is now fading quickly...
In fact, when we broke a Rising Wedge Pattern on August 21 2015,
game was over on SP500 on a short term basis and then reached then the panic selling level on August 24 at 1867.01. ( See Chart Below - Bottom Panel )
Few of us realize that we are already below the August 24 2015 level and that the Mighty SP500 Index is at 12.5% from its peak reached on May 20 2015. ( See Chart Below - Bottom Panel - Red Trendline )
US Dollar and SP500
Back in April 2015, we started to observe a new behavior as the stock market was getting near its high ever:
the relationship between the US Dollar Index ( DXY ) and the Mighty SP500 Index on a Daily basis as shown by the chart below. Now the risk on risk off bring very often the US Dollar Index and the SP500 Index in the same trend as it happened in April 2015, May, August, December and now.
The US Dollar Index is testing a Major Support Trendline that started back since August 24 2015.
( See Chart below - Top Panel - Blue Trendline - Ellipse )
But the most interesting technical factor is that the Mighty SP500 Index seen by International players including the currency effect (US Dollar Index - DXY ) is testing a Major Support Trendline that started back on August 2011. It could become a game changer for International portfolio managers.
( See Second Chart Below - Red Trendline - Ellipse )
US Dollar Index (DXY )
( Candles )