FINANCIAL ICEBERG
Always consider hidden risks
 TECHNICALS
SP500 Index (SPY ETF): Stairway to Heaven?
 December 15 2016 ​( From TradingView , CNN)
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​​​​In these Greedy times (good to know that​​ the Fear and Greed Index ​​ from
​CNN Money is coming from the Fear Zone just before the US Election to the
​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 November 7 2016,
​just a day prior to the US Election to make a Breakout on November 25 2016
​(from a Major Resistance Trendline that started back on May 20 2015)​
​​
(See first chart below - Thick Yellow Trendline) , all that with an average trading
​Volume ​which is quite unusual for a Breakout.  
(See first chart below - BottomBlue Area)  
Now within a steep Daily Uptrend Channel that Bulls need to protect at all costs...

​​​​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 12.79 which is near the lowest level post financial crisis reached on July 3 2014 at 10.28.
We tested the Daily Support Trendline on the VIX on December 7 and rebounded slowly as shown by the second chart below. Market in total Complacency Mode.

​​​​The US Dollar Index (DXY) in breakout mode and already within a rising Historical Volatility (HVol) pattern since October 5 2016, the highest level since July. 
(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 Channel technical pattern that Bulls need to protect; when broken, that pattern will bring tremendous volatility to the US stock markets. (See fourth chart below - Channel)

​​​​​​​​​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 December 15 2016 a new high ever (prior highest ever was July 22 2016) and at the resistance trendline that started back in March 2015. As domestic investors had their breakout on July 8 (SP500 Index), foreigners made their own standard breakout (SP500 times DXY Index) finaaly on November 9 2016...   ​(See Fifth Chart Below - Top Panel -Blue Trendline)

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)

​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