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Correlation

EW Analysis: Bearish Looking Treasuries May Push USDJPY HigherHello traders! Today we will talk about treasuries (10Y US Notes) and its negative correlation with USDJPY. As you can see, 10Y US Notes turned sharply down after a corrective movement in wave 4), which means that it can be now on the way back to lows for wave 5), especially if breaks below channel support line. At the same time USDJPY may continue higher as we know they are in tight negative correlation, so be aware of more upside on USDJPY with room even up to March 2020 highs and 112 area. Trade smart! If you like what we do then please like and share our idea! Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
CBOT:ZN1!
by ew-forecast
Gold recovered from daily loss with correlation plays! Hello everyone. Happy Labour day! As I mentioned previously in my published idea. Gold has strong negative correlation with US 10Y yield. With recent rising covid-19 cases and new variant detected, people started to worry about potential impact on the global economy. I can see stocks, BTC as well as US10Y yield dropped in the past 2 days. Dollar and Gold rose as safe heaven assets. Now gold will come to retest previous high and supply zone I marked a couple of days ago. Will it pass the zone? I don't know! How far will it go depend on how bad the situation is. It's harsh...I watched videos about what happened there. My heart is broken. Sometimes, It's hard to become emotionless under such circumstances even as a well-trained trader. Trade safe and take care!
TVC:US10YLong
by JICPT
COIN vs BITCOINI haven't seen anything about this yet, so here is a chart comparing the price of COIN with the price of BITCOIN. I think that it's safe to say that so far there is a direct correlation between the two. Not saying they won't diverge or converge at some point... but that might be a signal of sorts. It will be interesting to follow this pair and see how they relate to eachother as time goes on, especially during large BTC price swings. I assume that this direct correlation will continue. Let me know what you think. // Durbtrade
NASDAQ:COINLong
by Durbtrade
2
US 10Y to form bearish pattern amid NQ gaining momentum Hello everyone. It's been a while since I reviewed US 10Y yield last time. Now the control low has been violated, indicating sellers started to take control. From the daily chart, we can see that bearish downtrend has been formed with a control high zone just above. With the weakness of US 10Y yield, stocks are recovering from the low created by the news of possible capital gain tax rate hike. BTC also suffered a lot by approximately 30% from the fresh record. I'd like to use the yield as an odd enhancer for trading other assets, such as stock and futures. The correlation between the yield and other assets can help us to increase the winning ratio a lot. Trade safe and stay safe. Do give me a like and follow if you like my idea.
TVC:US10YShort
by JICPT
BTC is the MASTER of THE UNIVERSE at least the crypto universeLike evil Skeletor... BTC has its crypto MINIONS, binance, cardano, polkadot, ripple, uniswap, theta, and litecoin..... When there is stress in the crypto market, there is an incredible amount of correlation in the charts!! REMEMBER THIS, you have to look at the flagship, to see what colors the rest of the armada will wave. LOOK AT THE LIGHT GREEN BOX!. You always here everyone whining about correlation... but it is made very obvious here. You can use this link for analysis of correlation. charts.coinmetrics.io Quote: (in case you wondered why there are so many stupid leaders!) "Success in almost any field depends more on energy and drive than it does on intelligence. This explains why we have so many stupid leaders." - Sloan Wilson
by Ifyouonlyknew
1
Using Longer-Term Correlation to Predict MarketsIn the chart above, I display a daily chart of gold at the top, followed by the graphical 90-day correlation coefficients between gold and various asset classes. I do this kind of analysis at times when I feel a major inflection point is incoming. It is very handy when everything is moving quickly, since you can make the right choice after the dust settles. Moreover, you can anticipate what will happen and get into positions during the brief period of pandemonium. I will say from experience that being on the right side of certain markets before the final directions are determined is perhaps the most profitable way to trade markets. It is also extremely difficult to do and requires a thorough analysis of each major interrelated asset that is involved. In my opinion, and based on these correlation readings, I am essentially bullish on gold, bearish/neutral on everything else. And, when you really think about it, it makes a ton of sense. Let me explain briefly. I am not sure how anyone qualifies an asset class as "overbought," but just a quick glance at any equity index's monthly chart should be enough. All of them are so overbought that I do not feel the need to substantiate the claim with an indicator reading of any kind. The same goes for Crypto, except double. DXY and Oil are historically quite inversely correlated, and would imagine that they diverge as a result of a crypto-induced equities selloff. That's right - amazingly enough, it seems that the "safe haven" known as Bitcoin is actually what is holding equities up so high on the backend. I think. In any case, I hope this serves trading society well as volatilty soon approaches. -CorrPigEarningsMiss TVC:GOLD TVC:SPX TVC:DXY CURRENCYCOM:OIL_CRUDE BITSTAMP:BTCUSD
TVC:GOLDEducation
by UnknownUnicorn5511258
8
The Big Hedging is Coming; Bonds and VIX looking BullishThe market lately has been very unstable to say the least and has been willing to jump onto any boat it can in order to avoid inflation, However the price action we are seeing on the 30 YR seems to indicate that Inflation fears are overblown and that the Value if the Dollar index will likely remain stable. While looking through the charts i noticed that there was an unusually high correlation between the 30YR Bonds and the VIX: Starting March 3rd 2014 as marked by the green vertical line on both charts. You can see that most Green Months in the 30 YR results in a Green Month in The VIX. I assume this is because many investors buy bonds in times of market uncertainty as a hedge against potential downturns in the value of equities and securities. Todays Surge in Treasury Bonds could signal: A rise in Volatility to come, A downturn in the Stock market, and a Rise in both the Value and Confidence in the US Dollar.
TVC:US30Long
by RizeSenpai
8
US 10Y yield broke control low pushing stocks & commodities up! Hello traders, US 10Y yield just violated the control low zone on the daily chart, retreat to the lower part of the new range on the weekly. It's good for stocks and commodities as we saw NQ, copper, gold, silver all rally. Day close candle is important. I will check how it closes. As the yield goes lower, odds are on buyers side. You can check my linked idea below titled How things got linked up with one chart(FED, Gold,US10Y,NQ) However, I think the yield will go up again against the backdrop of strong economy recovery and rising inflation.
TVC:US10YShort
by JICPT
No Correlation Fround DXY and DJIi dont see any correlation to dxy rising = market crash from 6/14 to 3/15, DXY rose 19%, in the same period DJI rose 1200 pts from 1/17 to 1/18 dxy fell 13% in the same perido DJI rose 2500 pts From 1/07 to 2/09 the dxy dropped 7%, rose 20% then dropped 6% then rose 8% while DJI dropped 7000 pts From 3/87 to 11/87 DJI dropped 20 %; DXY dropped 9% i see no correlation From 1/02 to 3 / 08 DXY dropped 40%; during the sane period DJI dropped 3600, rose 5800 and then dropp 1800 From 3/10 to 4/11 DXY dropped 16%; during the same period DJI rose 1500pts i will continue until the point is made that there is no correlation to indicies moves and dxy and everyone relents From 6/89 to 12/90 DXY dropped 20%; during the same period DJI rose400 pts then dropped 400pts then rose 200pts From 12/93 to 9/95 DXY dropped 15.7% during the same period DJI rose 1000pts From 8/92 to 2/93 DXY rose 19 % ; DJI rose 125 pts from 8/95 to 2/02 DXY rose 47% : DJI rose 8600pts From 12/04 to 10/05 DXY rose 13%; DJI was flat From 11/09 to 6/10 DXY rose 15.5%; DJI rose 700pts then dropped 1100 pts
TVC:DXY
by dilille010
Focus shifted away from US10Y with less impact on NQ and GoldI'd like review the patterns from time to time. Pattern works until it doesn't. On Jan.6th, I wrote the idea titled " US 10Y jumped by 5+% A dangerous sign for stocks ". I was concerned of the speed. One month later, stock market started to fell drastically mainly due to this factor. What I observed for the past few days is that the pattern may not work again. The correlation seemed to turn from negative to positive. From the chart, I can see that NQ, Gold and Treasury yield moved in the same direction since March the 8th. People may wonder why. Frankly speaking, I have no clue, maybe, investors shift the focus on something else, e.g. corporate tax hike, tensions between US and China. The reason doesn't matter at all. What matters is how we are going to do. We should identify the certainties among the uncertainties. Personally, the certain things are: 1) Economy is on its way to pre-pandemic normal. 2) Strong dollar. 3) Fed will raise its target rate sometime in the future, e.g. late 2022 or 2023, depending the CPI data. So, I'm bullish on value stocks(banks, real estate) as well as USD pairs. Crude oil may hit 75 or even higher level. I'm bearish on gold until inflation reaches 3.5% or higher. Neutral strategy may work as well( check my BABA/Bidu strategy in the linked idea below ) Feel free to share your thoughts. Give me a like and follow if you think it's useful .
FX:NAS100
by JICPT
Hedge Your Investment PortfolioWhat Is a Hedge? A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting or opposite position in a related security. _______________________________________________ A perfect hedge is one that eliminates all risk in a position or portfolio. In other words, the hedge is 100% inversely correlated to the vulnerable asset. This is more an ideal than a reality on the ground, and even the hypothetical perfect hedge is not without cost. Basis risk refers to the risk that an asset and a hedge will not move in opposite directions as expected; "basis" refers to the discrepancy. _______________________________________________ In our previous educational post we noticed that you really liked this theme. The most pressing question in the comments was, what cryptocurrency is able to hedge the rest. So we made a short research to find and provide this table for you, guys. Here is the list of these cryptos that may safe your wallet from being bankrupt. This is not the financial advice to buy some of these coins or something like this. It is just a short material that all the crypto traders should follow before entering into the trade. _______________________________________________ All the materials were taken from Binance and Bitmex open sources We are glad to share all the materials with this community. Feel FREE to leave comments below about your vision Thank you, wolves🔥
Education
by Berzerk_invest
5
Correlation of Cryptocurrencies“Correlation statistically measures the strength of a linear relationship between two relative movements of two variables and ranges from 0 to 1.” In general, assets with a correlation above 0.5 or below are considered to have strong positive/negative correlations. Conversely, a close-to-zero correlation indicates no linear relationship between two variables, and for the purpose of this analysis, the returns of two assets.If the returns of two assets do exhibit a positive correlation, it implies that the two assets are, to some extent, moving in the same direction, and therefore share similar risks. On the other hand, a negative correlation between the returns of two assets indicates that the two assets are moving in opposite directions, and it is thus possible to use one asset as a hedge against the other. Based on this analysis, correlations are highest between altcoins and Bitcoin itself (~ average correlation of 0.69), indicating that most of the altcoins move in similar directions as Bitcoin, underscoring Bitcoin’s status as a bellwether for cryptoasset markets.While, generally speaking, altcoins are highly correlated with BTC, select cryptoassets exhibit materially weaker correlations both with BTC and among one another, which suggests that additional idiosyncratic factors may affect the prices and returns of these assets.
by Berzerk_invest
286
Gamestop Reckoning Part 1. VolumeAs the community of traders reckons with many a crazed new-comer and their love of gamestop GME and AMC we have to be glad that people are being more and more interested in trading. However, for many of us, trading isn't to make a statement: it isn't to make a point, to stick it to someone or to prove how resolute you are. For me at least, trading is the end result of an exciting process of creative research, imaginative planning and positioning, using algorithms that I've written to try to get a well-timed entry, and the satisfaction of not worrying about each pricepoint thereafter -- knowing that I like the stock because of the sub-industry position in our future as a society I like the stock because of the particular company's financials relative to any similar sub-industry member I feel that management, both based on metrics and intuition from listening to the researchers, COO, CEO, CTOs at the company actually believe in what they are doing. I feel that the timing is right from a technical perspective, relative to events, from an industry-cyclic standpoint, and broader market threats. Thus, in summary, my "advice" to anyone would be: buy a stock because you find it compelling, you can imagine what they do 5 years from now and its more than what they do now, you know the company is healthy, there aren't many threats, and you wouldn't be upset if it lost 10% because you are confident in its future. . If you feel this way about GME, then that's great. But its unlikely that you will make it through the above points without a bit of heartburn -- especially given the following: EARNINGS COME NEXT WEEK . This is a time to ask yourself the following question: what is a fair price? Did 100% gain exceed your fair price? How about 500%? I'll leave that to you. Today lets look at GME's Volume using the OBV Correlation Indicator. The OBV Correlation Indicator can be set to correlate with any reference. I've chosen QQQ Secondarily the direction of chart stock's OBV is encoded with color: So if the histogram is negative AND red this means the correlation is negative and the obv direction is downward for GME. Lastly price correlation is encoded with a line, and price direction with color. Thus a negative red line means the price directions are also anti-correlated and price is downward. In the case of GameStop we see the natural pre-earnings pattern. A lower price correlation than usual to the broader market A lower volume correlation than usual to the broader market. But we see something else here. We see accelerating negative correlation in Obv of GME and the index as well as obv oscillator decreasing at an increasing rate. This is all one moment in time. However we have to remember earnings are about rectification: rectifying the price with perception, rectifying expectation with guidance, and also rectifying expectation with position --- i.e., a time to take profits. Ask yourself this: Do you see whatever will be said by management as being something to sustain a 1,000% increase in price? Do you imagine a buyout would be offered at 1,000% its price at last earnings? This week: Watch the relative volumes, watch the decoupling of volume and price using this indicator (OBV correlation indicator), and if you are holding GME, consider looking like a genius and selling now.
NYSE:GMEShort
by BradfordFournier
8
How things got linked up with one chart(FED, Gold, US10Y,NQ)I covered this part in my video. To be more specific, I made this chart to better understand how things linked up. US 10Y yield is the anchor that rising rates may indicate two things: 1)strong economy, 2) inflation Fed is only able to directly control the short-term rate, say federal funds rate, not the long-end rate. On March 15th of 2020, It reduced the target range for the federal funds rate to nearly zero. That triggered the quick rebound of everything, including gold and NQ. We can see the two assets moved in the same direction . I bet everything moved to the upside! So when things started to change? In early Aug. of 2020 , US 10Y yield completed consolidation and started to go up in a moderate mode. Look at the slope! However, gold reacted to rising yield with a retreat from historic high of USD2075ish and it came all the way down. NQ shrugged off and kept moving higher. The two assets started to move in opposite direction. On Jan. 6th of 2021 , I published an idea titled 'US 10Y jumped by 5+% A dangerous sign for stocks' . Actually, I'm concerned then, because I observed the speed of going up is tooo fast! So when was the pattern of moving opposite terminated? On Feb.8th 2021, US 10Y yield stood at 1.17%. That day was a special day. It created a new high, indicating the readiness of going up. Two days later, the yield started with a series of big bullish candles ! This time, stock market couldn't shrug off like it did 6 months ago. It tumbled with gold. The two assets moved in the same direction again until now! So, when will this pattern be terminated? I don't know. But that day comes with a few signs as below: 1. inflation goes above 3% above. Funds will go back to gold again as it serves the function of hedging inflation. Stocks, especially, growth stocks will suffer a lot. Value stocks will outperform the growth. 2. Corporate earnings are way better than expected. Investors realize that stocks are under valued. The main driver of the market comes back to earnings, not the monetary easing policies. Dollars may get stronger with funds outflow from emerging markets. That's the map in my head of what might happen in the future. Follow the path, I'm confident to dig some opportunities. Give me a like if you love this idea!
FX:NAS100
by JICPT
2