Get started

Correlation

Bitcoin: Will History Repeat(ETH)?COINBASE:BTCUSD On August 1st, the Bitcoin community will be deciding on the future of Bitcoin. Since there is a likely chance that a hard-fork will occur, I will attempt to go through what may happen based on what happened to Ethereum when it hard-forked into Ethereum and Ethereum classic. This analysis will be based primarily on fundamentals and what happened historically compared to my heavy technical-analysis on Ripple. We begin during the period of the hard-fork of ETH and ETC which occurred on July 20th 2016. This is shown by the pink vertical line on the ETHUSD chart. It can be seen that the lead-up (one day before) into the hard-fork and also after the hard-fork did not affect the price of ETHUSD at all, where the up-trend in price continued. This pump in price is what I believe is happening currently to BTCUSD 1-year later (2017) over the past 2 days as seen in the below screenshot. I would not be surprised that on the actual date of the actual hard-fork for BTC (August 1st) and a few days after, price could pump to 3013.47 (similar to the pump 1 year ago on ETCUSD chart), hitting the top of the ascending triangle where the previous high could not reach. However, on the 26th of July 2016 the price of ETHUSD entered a down-trend. This down-trend seems to have been delayed, where you would think that the down-trend should have began at the date of the hard-fork. However, what is notable on the 26th of July 2016(shown by the purple vertical line on ETHUSD) is that Kraken, a major crypto-currency exchange opened markets for ETC (blog.kraken.com). With these markets open by 27th July 2016 (shown by the orange vertical line on both charts) it explains the down-trend occurrence. This, however, is not the most interesting observation I came across. From the opening of the ETC markets on Kraken until August 10th (shown by the green vertical line on both charts) price movement between ETHUSD and ETCUSD was almost perfectly negatively correlated (shown by the green curve lines and red trendlines on both charts). This implies that money flow into ETC primarily came from ETH. There would be two reasons why investors/market players would place their money from ETH into the new blockchain: 1. Speculative: As many believe that the new block-chain is better and thus its value will increase 2. Hedging: Risk-averse investors that want stability (maybe to use BTC to purchase goods and services) will place a portion of their funds into the new block-chain such that if case 1 is true, they will not miss out on the exposure (which i think is a good move, given how perfect the negative correlation is a fortnight from Kraken ETC markets opening) These 2 reasons are also relevant one year later to BTC as it approaches its period of hard-forking. I believe money flow from BTC to BCH(Supposed new ticker if hard-fork occurs) will occur and we will see a decrease in the price of BTC to the base of the ascending triangle pattern around August 17th which by serendipity is about a fortnight from the hard-fork. If this occurs then history will have repeated itself. We now reach the final part after August 10th 2016, where it can be seen that ETCUSD continues in a constant downtrend until the end of October. In contrast, ETHUSD continues to range by October's end. The market after August 10th can be assumed to be now valuing each of the new crypto-currencies separately and the correlation lowers. Again, looking back to today, I believe after the fortnight from the hard-fork, August 17th on-wards, we will see a proper valuation of the new bitcoin and this is an improved bitcoin thereby making logical sense to have a higher valuation. Hence, the ascending triangle after 17th August will be completed and an upwards breakout will occur.
COINBASE:BTCUSDLong
by TheTraderJ
LTC/USD : **Long opportunity ** Whats up guys ! ** Watch below for more info ** ** RISKY = every crypto is going down since few days ** Here we have a setup on the ltc/usd. Accumulation of : - Daily trendlines from bottom and top - Support zone - Lot of fibonacci retracement as usual - Stochastic strong oversold ( watch below ) - BTC trendlines bounce correlation TP1 is the pinkline , I recommand to breakeven for the 3 other targets . Don't put a huge amount on this one , SL is big . Good '' luck ''
KRAKEN:LTCUSDLong
by Foralex
9
BMW - VW (Correlation)Comparing the BMW chart to the VW chart it is striking that both price developments are strongly correlated to each other. Given the current spread between the two price changes in percentage, determined by using the closing price of the first day after going public, subtracting it from the current stock price and then subsequently deviding it through the first closing price, this offers us to greatly take advantage of their correlation. Obviously, it is likely that both prices are going to cross again in the future which means that all we have to do is shorting the BMW stock and buying some VW stocks in order to benefit from the decreasing spread between both prices. If we now charge both positions with the same amount of money and then close them when prices cross again, we are going to end up with 16.43% in profit.
FWB:BMWShort
by Lucas_Aschenbach
EEM/EWZ pairs trade (covered strangles)EWZ and the Emerging Markets ETF EEM have a strong correlation (Since EEM have 7.7% of brazil stocks). The correlation for the last year have been .92, and the last 30 days have drop to .40. Today we got a strong move on EWZ of -3.18% at the time of the trade and -.64% on EEM. By trading one to the upside and the other to the downside I will look to reduce risk on this trade until time has passed enough to take my profits. The trade is two Synthetic Covered Strangles EEM 38.5/40.5 Calls for $1.92 credit EWZ 38.5/35 Puts for $2.95 credit In total we got $4.87 credit (1 to 1 ratio) and will look to close at $2.00. I don't do a lot of these trades, but I find them very interesting so lets if in the next 30 days we can close for profits.
AMEX:EWZ
by AlexanderGotay
Potential AUDUSD Long Reentry Possibility?!Hello Traders, AUDUSD is in a big triangle pattern in the daily chart, as you can see in the first chart. It was flirting with the last significant breakout highs at around 0.7536. Where also the 200-day moving average comes across. The main idea is now that the market should at least bounce from its current daily levels. Therefore, we waited last week for a confirmation in the 1-hour chart. As a matter of fact, the 1-hour chart gave as an ending diagonal. With a breakout and a retest of this broken falling trend line, as you can see in the second chart, we decided to take a long position at 0.7555 with a stop loss of 0.75688 and an initial target of the last daily highs at 0.7715. It is an approx. 5:1 risk to reward ratio, which is pretty good. The trade is currently with +70 Pips in profit. But we will wait now for another consolidation pattern, like projected in the second chart. With a break again of its potential consolidation, we will take another long position to scale into our existing position. In case of a scale in we will put our stop-loss from the first position to break even. We will keep you updated. We wish you a successful start in this upcoming week and please do use a tested strategy, this is just our opinion and we don't share OUR exact multi-timeframe strategy here. This will just give a sense of market direction. Cheers
Long
by secrets2trade
working the 12000 mark The dax has been retesting the 12000 mark in the wawe of usd growth following trump speach before the congress . That the Pivot point beetween making new high and confirming the uptrend or it s going to range for a while and then going back down . Seeing the dax working this level would make belive that something its going to decide for it's faith , either way , anyway for our type of analisis beetwen market , these market is interesesting , seing how it open will be very interessing . IF the market decide to range , it would for very nice scalping type of market , for scalping and intraday directional strategie . if you want to come and talk to us about dax or other market we trading or publish analsys just don't hesitate to come and visit us over our group : www.facebook.com
OANDA:DE30EUR
by jeanbaptiste.laurent.94
violently been pull back out of the 1220 ish battle zone Trump speach before congress had a nice effect on the usd and gold react accordingly , went strait back into the 1220 battle zone the got vilently faught back out of it . I mean this kind of candle just mean reaction and the next support to the up side would be the 1240 1245 zone for completion of an nice head and shoulder pattern . If those price manage to contend price action then we can start talking about a reversal in the dollar . but it to soon for that on the other side a breach on the other side of the 1250 mark would mean a continuation of the up trend on the gold , so new target on the up side and down target on usd as usual dont hesitateto come and talk to us on our group : www.facebook.com
OANDA:XAUUSD
by jeanbaptiste.laurent.94
1
UJ Correlation with DXYCorrelation between DXY and USD/JPY Let’s start at DXY, if you look at the beginning of the year you can see we topped out just under 104 and then dropped during January down to 99.2 area which lines up right with the 38.2 FIB. If you move over to UJ, you can see that at the beginning of the year we started 118.5 area and during during January we dropped down to essentially the upper 111s. If you take a ratio of that fall, DXY dropped 450 pips and UJ dropped 650 pips, you get 1:1.44. Which essentially means that for every pip that DXY goes up/down, UJ will go up/down roughly 1.44 pips. With that being said, from my observations it appears that DXY is going to be moving back up to the 103.00 area moving roughly 100 pips from where it is now. Using my ratio above, that would mean UJ should go up around 144 pips from where it is now. Coincidentally this area lines directly up with the 1.236 Fib extension. I think with the recent push with the dollar we may see some draw down before this move occurs but it goes along with my prediction that I had about two weeks ago. Green arrows go with my bullish idea above. Red arrows line up with my idea below. Blue arrows are from my idea about two weeks ago. I linked my DXY chart so you can see a visual rather than having to chart yourself. On the other side I have a trendline drawn on UJ that it just bounced off of so it very well could reject and go back down to test the 112.5 area where I have another trendline drawn. I have a couple of pendings setup on my demo account to test my theory. With DXY breaking the 61.8 I see this continuing bullish but my other thought is it could have just passed the 61.8 but when it retests it, it will fall back down to the 50 and then go back up to the 103 area.
by CasMinor
Hershey's CoCo Sector Report - January 28, 2017Materials and Finance both started the week flat, moved up for a couple days, then remained steady on Friday while the US and World markets were down. If the US and World indexes are up next week I expect much from these two! Real Estate and Consumer Staples (Non-Cyclical) were the clear Sector losers taking back all the gains they made early in the week to finish weak. Materials had over 60 stocks > 5% for the week... compare that with Real Estate that had only 9! Good trading! Brian Hershey ***************************** Check out my "Hershey's CoCo World" indicator, available now for your US stock and sector evaluations. "CoCo World" helps to answer the following question: Is this stock moving alone or with the US and world markets? No stock is an island, so it's important to see what everyone else is doing. Useful across all time frames, small and packed with info!
AMEX:XLB
by bnh
1
CABLE Validates Classic Opening GAP Price ReversalCABLE @1.2594 N. High Confirms Price Reversal After Opening GAP similar to the what transpired from POST UK Exiting ERM dated Sept 1992. Even when there was a follow-through on the way up, only then when price levels sets a new high for the new month of January can we claim a validation & confirmation. The classic opening gap was indeed a price reversal even after touching its previous low @1.1986 before making a follow-through to the upside. This was in line with the extension levels of the DXY @103.55 high that gave way for a corrective move lower until today currently below 100 basis point.  Alternating trade sequence with the DX Futures Short @103.48 is a strategic move to cover any adverse / contrary price direction from the prevailing major trend as prices for CABLE are well within a down trend in spite of its recent rally. Therefore never discount the probability of price pullback in either direction. This provides traders the ability to maintain an ' UNBIAS' stance in their market analysis. CABLE is trading @1.2594 as a new high for January can find some resistance @1.2775 - 1.2880 levels. That is there would be more interest for CABLE to build up its momentum as long as the USD does continue to trade weaker.
Long
by megatrade101
Correlation Trade To WatchKeep an eye on this correlation setup over the coming days and weeks. The correlation is falling apart between AUDCAD & NZDCAD as you can see in the box on the right. You will notice the left box, when the spread got to approximately 400 Pips the correlation began to return, handing those in the trade a great return. The spread is currently approximately 200 pips, we could see it widen over the coming days and weeks. One should be ready to take positions if we see the spread get to approximately 400 Pips.
Long
by unique4x