Always consider hidden risks
SP500 Financials HVol: Unusual Behavior ?
October 12 ​( 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 August 7 a low level last seen back ​in mid-April 2015 when ​
​we had a range trade pattern in SRFI. But what is interesting, ​it is that HVol is ​getting lower after a false break out on July 22 with Financials, that was the very first unusual ​trading behavior.

​​( See 1st chart below - Red Trendlines - Ellipses)
SP500 Financial Sector ( SRFI ) Peaked at 344.90 on July 23rd.

​​​​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 September 2 til now, we had a decrease​​ in the Historical ​Volatility ​on SP500 Financial Sector ( SRFI ) ​with a bullish ​trend in Financials since...
Closing price on SRFI on October 9 was at 313.03.

The SP500 Financial Sector ( SRFI ) is now trading within a Downtrend Channel that started since August 25 as shown by the chart below.

​​​​But the most interesting technical factor is that the ​Historical Volatility ( HVol ) on SP500 Financial Sector ( SRFI ) is not falling as we did see in previous top but staying at level seen in previous bottoms.
A very unusual behavior if we look back at history.  
(See Ellipses - Chart Below ).

​​That bad volatility is in fact showing that we are shifting into a more uncertain market behavior​ on SP500 Financial Sector ( SRFI ) as The Fed continue to delay its first rate increase and Asian Markets are still quite volatile indeed.  Read Also:  Market volatility reflects uncertainty about low-growth economy




SP500 Financials HVol: Unusual Behavior ? $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 )​