Always consider hidden risks
SP500 Financials HVol: Complacent Markets?
March 29 2016 ​( From Tradingview)
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​​The Situation

​​​Rising Historical Volatility (HVol) on SP500 Financial Sector (SRFI) is most ​of
​the time ​​indicative of ​a market trend change or acceleration of previous trend.

​​And falling HVol is usually associated in a bull trend or trendless market. 
​​​​And rising HVol is usually associated in a bear trend or trendless market.

​​HVOL did reached on February 16 2016 a high level last seen back ​in September
​2015 after ​​we had a strong correction trade pattern in SRFI. 
SP500 Financial Sector (SRFI) Peaked at 344.90 on July 23rd and is making a Lower High and Lower Low Technical Pattern since then.

​​​​​​In fact, when we broke a Rising Wedge Pattern on August 20 2015 at 329.80 and also the 200 DMA (Day Moving Average​​ - Green Line on the chart below) then at 329.73 on SRFI ​, ​game was over on a short term basis and then ​reached then the panic ​selling level on August 24 at 299.11.

​​Since February 16 2016 til now, we had a decrease​​ in the Historical ​Volatility ​on SP500 Financial Sector (SRFI) ​with a strong bullish ​trend in Financials since... Closing price on SRFI on March 28 was at 302.06.

SP500 Financial Sector (SRFI) ​also broke on March 24 a steep rising wedge that started since February 11 2016 bottom at 262.78.  (See Chart below, Top Panel - Grey Trendlines )

​​​​Historical Volatility (HVol) on SP500 Financial Sector ​(SRFI) is falling at a level that we did see in the previous peak in price like in August 2015 and Novemver 2015. (See Chart below, Bottom Panel - Red Trendline - Ellipse)

​​​​​​But the most interesting technical factor is that the ​Historical Volatility (HVol) on SP500 Financial Sector
​(SRFI) is falling at previous market top at a time that we retested the previous peaks (August, September and October 2015) on SRFI. A tiny form of Complacency we have seen lately on Financials.  
(See Chart below, Top Panel - Blue Trendline)




SP500 Financials HVol: Complacent Markets? $SPY, $XLF #Trading  #volatility #SP500 #xlf

Top Panel : SP500 Financials ( SRFI - Candles )
SRFI 50 DMA ( Red Line )​
SRFI 200 DMA ( Green Line )​​
Bottom Panel : Historical Volatility ( MA10 - Blue Line )​