Always consider hidden risks
The VIX/ Gold Correlation US Dollar and SP500: Expecting Higher Volatility Ahead ?
July 20 ( From TradingView )
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In these still too complacent times, it is interesting to look the behavior
( correlation ) of the VIX and the Gold in relation to the US Dollar (USD-DXY)
and the Mighty SP500 Index.
As shown by the charts below, this correlation tells that the risks have not started
to be fully priced into the foreign exchange market yet in terms of volatility:
expect more volatility in the US Dollar and SP500 in the next few sessions...
VIX/GOLD correlation getting at the 0.70 zone on July 17 and
VIX at 11.95, indicating higher volatility ahead...
Observe the US Dollar two previous peak at the Resistance Trendline; one was back on April 13 and the other was on June 1. VIX/GOLD correlation was then near the critical zone of 0.70.
In both cases, USD started a huge move in a higher Volatility set up; looks like the same pattern to me today. See first chart below - Red and Grey Trendlines.
The US Dollar Index is within an uptrend channel and near the Resistance Trendline that started on March 13... See first chart below - Channel - Red Trendline
For the SP500 index, it started a Bullish Trend within a Rising Wedge that started back on March 11 and already at the Resistance Trendline . See 2nd chart below - Red Trend Lines...
So both the US Dollar Index (DXY) ans the SP500 are within a technical set up that call for a higher Volatility environment as history suggest.
The VIX/ Gold Correlation US Dollar and SP500: Expecting Higher Volatility Ahead ? $SPY, $SPX, $VIX, ,
$GLD, USDX #Trading #vix #gold #SP500
VIX ( Top Panel )
VIX over Gold Correlation ( Middle Panel )
SP500 Index ( Bottom Panel )
VIX ( Top Panel )
VIX over Gold Correlation
( Middle Panel )
US Dollar Index ( DXY - Bottom Panel )