Always consider hidden risks
SP500 High Beta Stocks: Still Underperforming ?
Febrary 8 ( From TradeView, CNN Money )
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The market participants never gave attention to that divergence that
started from May 8 2015 between Risk Taking behavior (weakening) and
the Mighty SP500 Index that was holding in a rising wedge pattern til it
broke finally on the downside on August 20.
( Ratio of SP500 High Beta stocks to Low Volatility Stocks )
The divergence is even more obvious on a weekly chart. And we broke
on the July 20 week, the support trendline that started back since
June 2012. ( See chart below - Top Panel - Blue Trendline ).
The market reached since November 9 2015 a full risk Off status according
to the ETFs High/Low Beta Ratio. ( See chart below - Vertical Trendlines and Ellipses ).The level of risk taking now according to that ratio is at the zone reached at the end of July 2012.
( See chart below - Top Panel Amber Trend Line - Ellipses ).
Also interesting to note the Fear and Greed Index from CNN Money as of February 8 is now at the Extreme Fear Level.
But the most interesting technical pattern here is that we continue to have a Lower Risk Pattern Behavior on a Weekly Chart as the Mighty SP500 Index are still above that support trendline that started since October 2014; what a divergence! ( See chart below - Top and Bottom Panel ).
The most obvious High Beta sectors under tremendous pressure lately are the Internet and Bio Technology. ( See second chart below l ).
SP500 High Beta Stocks: Still Underperforming ? $SPY #Trading #risk #spy #SP500
Weekly Relative Performance since 2014
SPY ETF ( SP500 Index - Blue Line )
FDN ETF ( First Trust Dow Jones Internet Index Fund - Yellow Line )
IBB ETF ( iShares Nasdaq Biotechnology - Orange Line )
High Beta - Low Beta ETFs ( Bar - Top Panel )
SP500 ( Candles - Bottom Panel )