FINANCIAL ICEBERG
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A New Financial Conundrum: Multi-Asset Breakout?
 July 11 2016 ( From TradingView )
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The Situation

​​We just start to realize how deep the correction near the end of the month
​of June was on the US Equity Market and all that a courtesy of Brexit Fears.
From the pre-Brexit close made on June 23 2016 at 210.81 ​on the SP500 Index
​(SPY ETF), to post-Brexit close 2 trading sessions after on June 27 at 199.60, 
​a drop of 5.3%, a level reached in mid-March 2016.

​​​
Rebounding from those technical levels was quite a statement ​from Mr Market
​b
ut few of us realize that the the post-Brexit panic was in fact an opportunity
for portfolio managers to rebalance at the end of month/quarter from cash
​and bonds to stocks. Also,the relative flight to quality and liquidity was in
​strong favor of US Equities​​. 

Some technical indicators and statistics on financial products:
1) SPY ETF is at only 0.5% from its peak reached on May 20 2015.​
​​( See first chart below )​
​2) SPY ETF broke the Major Weekly Resistance Trendline that started back
​on May 18 2015 week. ​​​
(See first chart below - Thick Red Trendline - Ellipse)
It was done on a very weak Volume trading environment. (See first chart below - Bottom - Blue Area)
​​3) TLT ETF (iShares 20+ Year Treasury Bond ETF) closed above the Major Weeky Resistance Trendline that started back since December 2008.  ​​​​(See second chart below - Thick Blue Trendline - Ellipse)​
​It was done on a very strong Volume trading environment. (See second chart below - Bottom - Blue Area)
4) Gold Futures broke the Major Weekly Resistance Trendline that started back ​on September 5 2011 week. ​​​​(See third chart below - Thick Grey Trendline - Ellipse)​
It was done on a very strong Volume trading environment. (See third chart below - Bottom - Blue Area)
4) The Yuan Renminbi broke the Major Weekly Support Trendline against the Japanese Yen that started back ​on July 9 2007 week. ​​​​(See fourth chart below - Thick Blue Trendline - Ellipse)​


At a time were Chinese are getting out the most money that they can by all means​ from their country (Bitcoin, Gold, Silver, Real Estate in Canada and US,...) since the devaluation process that did accelerate since 2015, we have Central Banks almost on a panic mode as Government Bond rates are collapsing worldwide and Financials getting crushed oversees from negatives rates and political uncertainties...

​As the SKEW Index reached the biggest level ever on June 28 2016 (indicating the market was more than fully hedge with bear strategies - put options) and portfolio managers being long cash the most since 2001 (and mostly Allocations to US equities remain near their 8-year lows - Read: Fund Managers' Current Asset Allocation - June, all the planets were aligned to have a quite bullish end of the month/quarter rebalancing
​into US Equities.

​As the uncertainties from foreign markets is quite high, it makes even more the US Market as the best in terms of liquidity and relative safety...

Almost a Financial Conundrum to me to have in the same week, a weekly Breakout in US stocks, bonds and gold. A very atypical ​​way indeed and something have to give. I think the US Dollar Index (DXY) is key to that to resolve that financial imbroglio. If we start to see the US Dollar weakening, the party will be over for US Financial Assets.
​​ 


​​




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"To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy's resistance without fighting."

-Sun Tzu, the Art of War

A New Financial Conundrum: Multi-Asset Breakout? $SPY #investing #trading #SP500 #stocks #spy

Weekly Chart (  Candles )
TLT ETF (​ iShares 20+ Year Treasury Bond ETF )
​Volume ( Bottom Blue Area )​

Financialiceberg.Com
Financialiceberg.Com
Weekly Chart ( Candles )
​SP500 Index ( SPY ETF )
​Volume ( Bottom Blue Area )​​
 ​Weekly Chart ( Candles )
​Gold Futures ( GC1 )
​Volume ( Bottom Blue Area )​​

Financialiceberg.Com
Financialiceberg.Com
 ​​Weekly Chart ( Candles )
​Yuan Renminbi Japanese Yen Exchange Rate ( CNYJPY )

Financialiceberg.Com