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Correlation

JICPT| Global market rattled by Evergrande CrisisHello everyone. It's not a happy Monday for bullish stock buyers. Actually, mainland China market is closed today for celebrating Mid Autumn festival. I was outside with families in another city and didn't have a plan to update anything, until I got a message from a colleague, saying that please check the market. I'm not so keen to know what caused the market move, because what we should do matters the most. I guess the Evergrande crisis might be the major contributor of today's market crash, especially HK. It then quickly spread to other markets, e.g. Nikkei 225, Europe and US markets. Firstly, let me brief the Evergrande crisis. Evergrande, a Fortune Global 500 group enterprise, is a top 3 real estate enterprise in China with more than 13000 projects through out the country. Its debt issues emerged in recent months with a severe cash liquidity problem of unable to pay back its $300 billion worth liabilities. The enterprise is listed in HK with market cap dropped by more than 70% so far this year. I observed US dollar, Yen and Gold got supported from this as they normally are served as safe-heaven assets. For gold, as I previous mentioned in my posts it's likely to seek support from the 61.8% fib retracement. I also noted that BTC has suffered a great loss toady by 7-8%. Looking at the chart, BTC acts more like a risky asset which has a negative correlation with the USD dollar index. However it dropped too much so there is another reason behind it. I don't know what it is but what I want to point it out is the risk management. Don't use high leverage to trade it. The high volatility will blow your account. The nearest firm support zone is around $40000 with long-term MA and flip structure. In the end, financial markets are multi-dimensional and there is correlation between different assets. With more money poured into the 'quant' strategies, price movement of one thing will quickly impact another. Market will become more volatile. So stick to your rules, especially risk management. Stayer longer will make you become a winner ! Give me a like if you're with me. Thank you for your support.
FX:XAUUSDShort
by JICPT
How do you trade with Correlation?How do you trade with Correlation? You can trade on forex pair correlations by identifying which currency pairs have a positive or negative correlation to each other. I have identified above the 3 main correlation pairs which correlate best with each other. In the conventional sense, you would open two of the same positions if the correlation was positive, or two opposing positions if the correlation was negative, for example when OIL increases in value, the Canadian Dollar tends to increase in value. This is because Canada is among the top 5 oil producing and exporting countries making them directly correlate. CHF & GOLD Correlation Both the Swiss Franc (CHF) and physical gold have acted as reserve 'currencies' thereby establishing a relationship between the gold price and Swiss Franc . Despite some differences, the Swiss Franc and the gold price are correlated and the similarities shared by the two can be clearly identified. This the Swiss National Bank has a huge amount of Gold Reserves and is one of the largest possessors of gold reserves worldwide. This also gives the Swiss Franc direct correlation with gold as the government passed a legislation that the Swiss Franc must be backed by gold . Why is it important Correlation is important when trading your strategy as you can manipulate the market and gain more confluences to confirm your entries. For example if you are focusing on the Canadian Dollar and can see a bullish trend and an entry point, OIL must also be bullish due to the correlation and you can confirm your analogy as you have analysed 2 correlating pairs which are both bullish .
OANDA:XAUUSDEducation
by Pips-Collector
JICPT| Gold failed the 3rd try with Treasury & DXY rise today!Hello everyone. Gold has suffered a $30+ loss today with US 10Y yield and the dollar index surge. Normally, gold has negative correlation with the two. especially the dollar index. Please refer to the below line chart. On the daily chart, we can clearly see that gold failed to challenge previous high again located around 1832. Looking below, price is likely to seek the support in the zone of 1771-1782 . What do you think? Give me a like if you're with me.
FX:XAUUSDShort
by JICPT
2
Euro Currency at KEY levelThe $Euro has stayed above the orange level, around $109, for a year. We have seen several tests of this level (shown by the purple arrows). Why does it matter? 1. The US dollar has an inverse correlation with the Euro as well as Gold. 2. A strong US dollar negatively affects international equity (such as Europe and Emerging Markets). 3. A weak dollar generally creates a bullish scenario for commodities. 4. Gold has a slightly negative correlation to Bitcoin. Currently at -0.5
AMEX:FXE
by dorfmanmaster
1
JICPT| Copper on the verge of another breakout again!Hello everyone. Copper is a leading indicator that I like to review from time to time. My previous breakout projection worked well. However, it fell back again formed a higher low, indicating strong momentum. So, basically this is a momentum play. I also searched other clues as an odds enhancer. Below is the line chart of copper and Us 10Y yield. It clearly to see that the two has been in the same direction for sometime in general. The reason behind this is the recovery of the economy. Though, supply and demand is another key factor impacting copper's price. After the breakout, the nearest target is 4.63 . With the continuation of the economy recovery, I'm bullish on copper. The nerve zone for me is 4.7 and above. What do you think? If you're with me, don't hesitate to give me a like.
COMEX:HG1!Long
by JICPT
Using Correlations to Predict Markets: Review & DiscussionSeveral months ago, I posted the original idea (see related) when I thought that markets were preparing for major asset rotation. Instead, it seems that we only got a preview of the real thing. Meaning, that Bitcoin had a major selloff right around the time of the first post, but it wasn't severe enough to drastically shift the major asset classes. Right now, I feel a similar type of paradigm shift is coming, so I wanted to review some key points that I've gathered since monitoring this correlation study. The major takeaways are listed in the top part of the chart and the updates to what the correlations with Gold could mean for each asset class are shown in the bottom sections, respectively. In my opinion, not much has changed regarding the future direction of the various asset types, with the exception of USD. I think that as of today, inflation will get its recognition as a potential destroyer of wealth and will lead to mass exodus from risk assets. The reasons for this are too many to include and are beyond the scope of this post. The main point of this is that I believe that due to the bizarre and artificial economic landscape painted by the Fed, that inflation will be viewed as a harbinger for risk assets, before it is considered an "invisible tax" on the USD, which would lead to broader questions concerning its purchasing power. The reason for mentioning this inflation belief is that we find ourselves in a unique situation whereby there are only two main asset types that are "undervalued": 1) USD, 2) Gold. Ironically, these two things should be polar opposites; yet it is now undeniably true (based on recent correlation studies), that the two move in tandem when correlated, and have been such more often than not over the past several years. Lastly, I would strongly recommend keeping tabs on USD/Gold corr going forward, since it can really help to find true direction when financial markets unravel. -Pig/USD TVC:GOLD TVC:SPX TVC:DXY CURRENCYCOM:OIL_CRUDE BITSTAMP:BTCUSD
TVC:GOLDEducation
by UnknownUnicorn5511258
8
JICPT| Gold rose as expected to opposing supply zone! Hello everyone. This is the update of my published idea titled 'Daily bullish setup of Gold(1790-1783)' on July 22nd. You can check the link below. The setup worked very well. It kissed the level of 1789 which is just below my recommended level. The risk is low and profit margin is high! After that, price went sideways until FOMC statement released yesterday. The fed chair Powell reassured investors that rate hike won't happen soon. As the negative correlation of interest rate and gold, the upper boundary of the sideway zone gets violated firmly. The momentum is pretty strong that the price is now approaching opposite supply zone. You can see how gold, Nasdaq and US 10Y yield move in the below chart. I drew black lines to better show It quite useful. I took the recent high as supply zone. Buyer should watch for the potential reversal risk. Once conquered, the next level is 1870 . Give me a like if you're with me. Thank you for your support.
FX:XAUUSD
by JICPT
Scary BTC & ETH correlation may call for a Bear Market!Here I present a curious and scary correlation between Bitcoin ( gray line ) and Ethereum ( orange line ) tops indicating a possible extended bearish scenario ahead. One chart on the left shows Bitcoin's 2017 top, followed by Ethereum's top ocurring 28 days latter. Last bear market has started after that. The chart on the right has the current prices of Bitcoin and Ethereum, showing us the exact same 28 days appart from their recent tops... This already confirms the money flow from Bitcoin to Ethereum (and possibly followed by other alts, starting an altseason - which we've actually had) that tends to happen in the end of a bull market. So this could potentially indicate the end of the current bullrun for crypto and the beginning of an antecipated Bear Market, considering it would be early based on Stock to Flow model. The news get even worse if added all the other bearish indicators we've had in the last weeks to support it. Also worth mentioning, the trader's disbelief regarding this being the top of the 2021 bullrun may actually be a factor reinforcing this event, once history tells us most retail traders are usually wrong about tops and bottoms, and specially, trend reversals. Crypto twitter is full of "BUY THE DIP" kind of calls. >> What's your opinion on the topic? Is crypto really done for a while? Or is it just a double-top bullrun? I'm looking forward to hearing from you in the comments. *My previous idea "Bitcoin's mid-term analysis you should consider", linked below, offers a great perspective on the bearish indicators I've mentioned.
INDEX:BTCUSDShort
by B4Baggio
1
JICPT| Drop of US 10Y yield favors NQ & GoldHello everyone. The recent economic data is sort of mixed, with better-than-expected job data released last Friday and worse-than-expected ISM Services PMI data published today. We can see how market perceived the data from the long end of treasury yield, say the drop of US 10Y yield indicating slower economic growth in the future . The correlation works with NQ and gold going up. I explained the relationship in my previous post titled 'How things got linked up with one chart(FED, Gold, US10Y, NQ) '. If you're interested, you can read check the link below for more details. Normally, in my trading strategy, correlation plays an important part. It serves as a powerful odds-enhancer and can help you catch some big moves. So, let's back to US 10Y yield. From the chart, it fell into the old zone again. The next possible support level is 1.27 after 1.35 is firmly taken out. Fed minutes will be released this coming Thursday. Market might be very volatile then. Please trade safe and stay safe! Give me a like if you're with my idea.
FX:XAUUSDShort
by JICPT
Bitfinex Margin Long ChangesBrainstorming This is a back-of-the-envelop analysis of the correlation between Bitfinex margin long positions and BTC price. My intuition is that a more disciplined analysis of Bitfinex margin positions, crypto exchange flows, margin funding rates, and changes in something like the SPY ETF could yield a predictive model. There appears to be some relationship between these two data series, but only when there is a large change in the Bitfinex margin positions. In 2021, generally, margin longs correlate with BTC price. If margin longs were to decrease, BTC price would likely fall due to selling pressure. Again, this is a back-of-the-envelop analysis. Broad market sentiment likely influences the Bitfinex long and short margin positions. So, the correlation will not be stable. Watching changes in the Bitfinex margin longs may help forecast BTC price... but this has not been proven in this analysis. I do have a bearish bias at this time. More to come as I continue to think about this. Thoughts? Comments?
BITFINEX:BTCUSDLONGSShort
by UnsungTraderTV
1
Portfolio Optimization With BNBIs BNB correlated to other assets? The average correlation ratio amongst cryptocurrencies stood at 0.72, a high value indicating a strong relationship between the returns of cryptoassets.Amongst ten of the largest marketcap cryptoasset, BNB was the least correlated asset displaying an average correlation of only 0.58.BNB displayed a medium positive correlation with other large cryptoassets: only 0.57 with BTC, 0.52 with XRP, 0.64 with LTC, and 0.63 with ETH. In comparison, BTC and ETH, the two largest cryptoassets, displayed a strong positive correlation(0.82). Correlations with traditional financial assets BNB appears to be a unique asset: not only is it uncorrelated with traditional financial assets, but it is also one of the lowest correlated assets with other cryptocurrencies.Hence, the next subsection focuses on the construction of model portfolios, including Bitcoin (BTC) and BNB, along with the backtesting of the performance of these portfolios.
Education
by Berzerk_invest
11
DXY and EXY correlates negatively !! EUR/USD SHORTHy trader, good mood and profitable trades ! 💲 In the 1h chart we can see a negative correlation between DXY and EXY. While DXY broke out of the falling wedge with a nice kick, we saw EXY break out of the rising wedge. In the Dollar index I see a nice bottom formation with HLs and a HH. In the Euro Index we can see a top formation with LLs and LH ! My trading plan for this week: EUR/USD SHORT I would like to mention that all I post are just options and my own opinion ! Always trade with SL, and do not risk more than 1% of your portfolio (max 3%) per trade. Unfortunately, my english is not so good and I work with google translate, but if you have any questions I will be happy to answer them . ➡️If you like my posts smash the like👍👍 button, comment or follow me.⬅️ Thanks for reading my ideas, Trade save!!
TVC:EXY
by TR7z
16
GOLD PRICE/VOLUME CORRELATION - GC1! - MONTHLYThank you for your likes, comments and shares! Much appreciated! This is an idea not a financial advise. __________________________________________________________ A quick look at the some of the Gold key points. It probably will provide you an extra look on the price action. See how the volumes have increased throughout the time. Some parabolic moves and little corrections. But, overall, the Gold price will probably continue to rise. Some probable lower price ranges are identified and might be good entry points for a long entry. Holding long term position or dollars cost averaging.
COMEX:GC1!Long
by Diallo_Charts_Ideas
Crude oil rises with US 10Y weighing on Nasdaq!Today's a bit bumpy for Nasdaq. The tech-heavy index has reached a key zone(flip zone) . In my opinion, correlation come into play again! Crude oil has risen steadily for the past few days. It might add inputs to future costs as oil plays a very important role in the modern society. I know the concept of ESG but until No. of new energy cars outnumbers traditional ones. We know the economic outlook and inflation can impact the US 10Y yield. Normally, better economy and high inflation would push up the yield. What's more, the rising yield could weigh on the stock market and we all what happened in Feb. Job data(NFP) will be released this Friday. This might be the old play that good news is bad for stocks or vice versa. So how high could crude oil go? I would say 70 is a key level.
OANDA:WTICOUSD
by JICPT
Who Is Driving BTC Price? MicroStrategy Based On Elliott WavesHello traders! Today we want to show you how strongly MicroStrategy and Bitcoin are correlated, so it can be telling us who is driving the price of Bitcoin. As you can see, charts are in tight positive correlation and looking at the wave structure of MicroStrategy from Elliott Wave perspective, seems like one more leg down is missing to complete a five-wave cycle within wave (C), therefore BTC may stay down or sideways for some time. From psychological point of view, many new Crypto traders are buying dips now in fear, desire, and greed not to miss again, so in Crypto market is always dangerous when the price turns for 50% from the highs, so we have to be very smart and patient. We actually believe that BTC is still trading in a correction, it's just a higher degree corrective phase which can be a bigger one and it may take some time to make traders insecure and impatient before bulls show up again. Be humble and trade smart! If you like our idea, then please like and share it. 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.
NASDAQ:MSTR
by ew-forecast
6
Elliott Wave Analysis: Energy Sector May Face Some WeaknessHello traders and investors! Today we will talk about energies, specifically Crude oil and Natural gas in which we see interesting developments. As you can see, both oil and gas are in tight positive correlation as energies are in recovery mode, but a rise looks corrective. Oil has slow, choppy and overlapped W-X-Y complex wave structure, while gas has A-B-C correcitve rally. Well, with current sharp and strong decline below channel support line, seems like bears are taking the lead, at least for a short period of time, so watch out for more weakness in upcoming days/weeks. Be humble and 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.
NYMEX:CL1!Short
by ew-forecast