FINANCIAL ICEBERG
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 TECHNICALS
SP500 Index (SPY ETF): Stairway to Heaven?
 August 08  2016 ​( From TradingView , CNN)
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The Situation

​​​​In these Greedy times (good to know that​​ the Fear and Greed Index
​from CNN Money is coming from the Fear Zone at the end of June to
​the ​Extreme Greed Level now at 86).
It is interesting to look the
​behavior ​of the US Dollar Index ​​(USD-DXY) ​and the
​​​SP500 Index (SPY ETF).


​​​The SP500 index (SPY ETF) started a Bullish Trend from the post-Brexit panic on June 27 2016 to make a Breakout on July 8 2016 (from a Major Resistance Trendline that started back on May 20 2015)​ ​(See first chart below - Thick Red Trendline - Ellipse) , all that with a lower trading Volume which is quite unusual for a Breakout.
(See first chart below - Blue Area - Ellipse)

​​​​What strikes me the most is that in previous Breakout on the SP500 Index, the Volatility Index (VIX) was higher than the level now of 11.39 which is near the lowest level post financial crisis reached on July 3 2014 at 10.28.
We are now testing the Daily Support Trendline on the VIX as shown by the second chart below.

​​​​The US Dollar Index (DXY) is already within a rising Historical Volatility (HVol) pattern since July 20 2016.
(See third chart below - Bottom Panel - Red Trendline)

​​​​​​​​As shown by the charts below, the Historical Volatility divergence between the US Dollar Index and the SP500 Index (SPY ETF) tell me that the risks have ​not ​started ​to be fully priced into the stock market yet in ​terms of volatility: expect more volatility in the SP500 in the next few sessions...​​ 

The answer to that may come looking at a Weekly chart from the SPY ETF. (See fourth chart below)
In fact, we are within a steep rising wedge technical pattern; when broken, that pattern will bring tremendous volatility to the US stock markets. (See fourth chart below - Blue Trendline)

​​​​​​​​​But very few of us realize that for a foreigner looking at the SP500 Index on a Macro Basis (so in US Dollar Index - DXY times the SP500 Index) we did finally reach on July 22 2016 a new high ever (prior highest ever was November 30 2015) and at the resistance trendline that started back in March 2015. As domestic investors had their breakout on July 8 (SP500 Index), foreigners failed making their own standard breakout (SP500 times DXY Index)...   ​(See Fifth Chart Below - Top Panel -Red Trendline - Ellipse)

And we are already within a rising Historical Volatility for that SP500 Index (viewed from a foreign perspective)
(See Fifth Chart Below - Bottom Panel - Blue Line - Ellipse)

​Simply stated, I think that the SP500 Index is becoming more and more at the mercy of the US Dollar Index Behavior in terms of trend and mainly in terms of Volatility...



SP500 Index (SPY ETF): Stairway to Heaven? $SPY, $SPX,  USDX #Trading #dxy  #usdollar #SP500 #spy 



Financialiceberg.com
Top Panel: US Dollar Index - DXY 
times
​​SP500 Index
​(Daily Candles)
​Bottom Panel : Historical Volatility ( MA10 - Blue Line )
Financialiceberg.com
Financialiceberg.com
SP500 Index ( SPY ETF - Daily Candles )
20 DMA ( Yellow Line ) 
​50 DMA ( Red Line )​
200 DMA ( Green Line )​​
SP500 Index ( SPY ETF - Weekly Candles )
4 WMA ( Yellow Line ) 
​12 WMA ( Red Line )​
50 WMA ( Green Line )​​
SP500 Volatility Index ( VIX - Daily Candles )
20 DMA ( Yellow Line ) 
​50 DMA ( Red Line )​
200 DMA ( Green Line )​​
Top Panel : US Dollar Index ( DXY - Daily Candles )
20 DMA ( Yellow Line )
​50 DMA ( Red Line )​
200 DMA ( Green Line )​​
Bottom Panel : Historical Volatility ( MA10 - Blue Line )​

Financialiceberg.com
Financialiceberg.com
Financialiceberg.com