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Correlation

CADJPY warsOil clearly took the up-ramp. Now as you can see CJ was playing pretty much playing a leading role on this chart, which spans from May last year. There have been three other occasions back in August and September last year where CJ dips before catching up with Oil. It signals a possible USD roll over, which often plays in the second half of the year. Should we see a start of the USD roll over season at this time of the year it may take a little longer than usual to return bullish again. I see a possibility to last till December from any time it starts. Let's keep an eye on the stock markets as they play a big role to kick it off.
Short
by Deep-Peat-Shark
USDCAD x USOIL - A Peek Into The Future Of Oil 🛢👀USDCAD and USOIL are inversely correlated - meaning when USDCAD goes up, OIL goes down (and vice versa). In the chart we have USOIL at the top and USDCAD inverted at the bottom. It appears that USDCAD is ahead of Oil by around a month or so. When USDCAD started it bearish wave, USOIL was starting its bullish wave (after a month). We recently saw a third touch of a trendline for USDCAD and price rejected nicely and USDCAD is now bullish. We haven't yet seen that for USOIL. We're still yet to touch the trendline for the 3rd time, which will very likely follow USDCAD inversely. FUNDAMENTALS Fundamentally we have reason to believe that in early Feb Oil prices will head lower. Opec Plus is expected to adhere to its current strategy at its February 2nd Meeting, raising its March production target to 400,000 barrels per day. More supply = Lower prices = USOIL Shorts. It just so happens that the third touch of the trendline for USOIL falls around the Feb 2nd - which would give us a perfect reason to short. In conclusion, we have the following reason to short OIL: - USDCAD is leading the way a month early whilst USOIL follows - USDCAD has already hit the trendline for the 3rd time and is bullish - USOIL is about to hit the trendline for the 3rd time and turn bearish - If the OPEC meeting goes well and they adhere to the 400k barrels a day, we will see USOIL move lower. What do you guys think? Do you agree? Did you know about this correlation? Let me know below. Goodluck and as always, trade safe!
TVC:USOIL
by WicktatorFX
11
EURUSD & US dollar Index (H4)On the top chart, price has cleared through support that has been holding for some weeks now for the US dollar. Current trend is making lower lows & highs as well. I am looking for the DXY to form a lower high & retest broken support as new resistance, where I will be looking for price to resume the downtrend for a new potential lower low. Vise versa with EURUSD, price last week cleared above the resistance structure of the downtrend that has been holding for some weeks now, forming a higher high & breaching the descending trendline. I will be looking for EURUSD to retest previous resistance as new support, forming a higher low. After proper confirmation at the zone of interest, I will be going to the lower timeframe (2 hour timeframe), to look for signs of a reversal that EURUSD will resume the current uptrend for a new potential higher high. Thank you to all my supporters & lets have another great week ahead! :)
by Profound_Ambition
Correlation of Different Markets with Forex: CheatsheetOne of the biggest things you should understand as a trader is prices don’t just go up and down (well, maybe on a really small timeframe they’re more chaotic). They’re usually backed by some actions, data and things happening in other markets. This all creates general economic tendencies. But how do we know what affects dollar/currency pair and how? Well, here is a quick cheat sheet for that case. More importantly with an explanation of why. 😊 USD and Gold (negative) Investors prefer to abandon the dollar in favor of gold during times of economic uncertainty. Gold, unlike other assets, retains its inherent worth. Gold and NZD/USD (positive) New Zealand (number 25) is a major gold producer. Gold and AUD/USD (positive) Australia is the world's third-largest gold producer, exporting around $5 billion worth of gold each year. Gold and USD/CAD (negative) Canada is the world's fifth-largest gold producer. When the price of gold rises, the pair tends to fall (CAD is bought). Gold and USD/CHF (negative) Gold backs up more than a quarter of Switzerland's reserves. As gold prices rise, the pair falls (CHF is bought). Oil and USD/CAD (negative) Canada is one of the world's top five oil producers. It exports 5..5 million barrels of oil per day to the United States. As oil prices rise, the pair falls. Bond Yields and USD (positive) Higher bond returns attract greater investment to a country's economy. This makes its native currency more appealing than the currency of another economy, resulting in lower bond yields. Here it’s more about looking out for bond differences between countries. For instance, if bond difference between UK and United States goes down, this will cause GBPUSD fall as well. Gold and EURUSD (positive) Because gold and the euro are both considered "anti-dollars," if gold prices rise, the EUR/USD may rise as well. USD and Stock Market (depends on the market situation, mostly positive) So, here is a little weird one. Strong stock market is an indicator of a strong economy. So as company gets stronger -> stock price goes up -> attracting more international investors to step in, who have to get local currency in order to buy a local stock -> this cases dump of other currency in favor of the currency we’re intending to buy the stocks with (in our case USD). Seems easy? On the other side, people from the local economy dump their dollar/bond holdings to acquire more stocks weaking the currency itself. That’s why it’s a complicated love story. This correlation is quite different depending on the volumes for both cases. Enjoy, family! But keep in mind that these tendencies change to some extent as the world economy shifts/develops. Make sure to always stay updated and observe on your own.
TVC:DXYEducation
by Investroy
13
Correlation of Bitcoin, SP500, Nasdaq 100.Crypto proponents have long argued that Bitcoin and other digital assets, on account of their being an idiosyncratic asset class, could act as hedges against wild swings in other areas of the financial market. That proposition is currently being tested as more speculative areas of the market come under pressure amid expectations interest rates could climb higher much sooner than previously expected. This graph compares the price movement of SPX against Nasdaq 100 and especially against Bitcoin since mid-2021. It is not a surprise that these markets are correlated, but it is an illustration of the force that one has over the other and further evidence of how wrong is the idea that digital assets can serve as a hedge in an investors portfolio. BINANCE:BTCUSDT NASDAQ:NDX SP:SPX
by JRuiz000
5
SPX since 1980s & 10Y Bonds. "Manual Guide" Technical analysis !Simple manual guide to better understand the relations, if there is any, between SPX & US10Y BONDS This is combing our four last studies into one comprehensive idea to try and figure out the patterns in both instruments. Thanks for your understanding if i missed one here or there or made some mistakes here and there. *** THE KEY FOR THE WHOLE STUDY IS : Daily Golden Cross (75% success) + Weekly kissing/cross (75% success rate) 200weekly MA = 75 % success rate we will get a pullback or a correction*** ---------------------------------------------- Starting with closest,2009-2021, crashes of SPX & US10Y BONDS price at that moment. (Idea included) 2.3xx 2.5xx 2.9xx 3.4xx 3.7xx All the above #s happened during the while the rate was actually going down, in our case today the rate is going up from most extremes low. Will it continue to go up/down is beyond my knowledge/experience. ------------------------------------------------------------------------------------------ General perspective: ------------------------------ 1/ Using weekly Crosses on the US10Y have a 50-50 chance, not sensitive to the volatility of 10Y Bond. Therefore, do not come close to it :-). 2/ Since 1980 , past 41 years, we have 8 Golden & Death Crosses on the daily. 3/ Since 1980, past 41 years, there is 75 % chance to get a 20% correction or more while we are under the daily Golden Cross. 4/Since 1980, there is a 25% chance to get a 20% correction or while we are under the daily Death Cross. 5/Since 1980,past 41 years, not surprisingly we have the largest single percentage gain from a reasonable bottom before a 20% correction or more "244% up " to be exact as it is the case for all indictors since March's low all are our of the ordinary readings. 6/ as of today, we are under the "GoldenCross" = 75 % correction. 7/ we have 4 possible dats plotted on the chart for such event to take place , one of them we are already in !!! Next one is April 1, 2021. ---------------------------------------------------------------------------------- Data for Kissing/Crossing 200Weekly MA: 2017-2019? One year nothing then 11%/20% 2015-2016 : 14% 2015-9 months sideways then 12% 2015 xxxx nothing 2013-2014 Long bull move. 9% pullback. 2011- 8% 2011- 7% 2010- 17% 2005-2007 : xxx long Bull move the crash 05-6% 05- 7% 04- 8% 1999-13%/10%/13% then crash 1997- 10% the bull move. 1996-8% Choppy Market then bull move 1994-9% then big bullish market ( 1 Year choppy market) 20% 11% 7% 7% 8% 36% 14 % ---------------------------------------------------------------------- Summary: 24 signals Kissing or Crossing 200W MA. 18 signals we went down @ kissing/crossing or Kissing/crossing happened a during pullbacks/correction 6 signals months-Year nothing happened then crash crossing down. 75% success rate we will get a pullback/correction kissing/crossing 200w MA. 25% we will continue a Bullish till crossing down then crash - 2 Years after crossing then crash 2007 -2015 cross up/down = Nothing happen to SPX !!! ------------------------------------------------------------------- Since the 80s every time we get a spike in US10Y Bonds SPX got a correction with a minimum of 20% and maximum of 57 % the question is where & when. Therefore, looking back to all the data available on Tradingview since 80s to 2021 we have measure the spike's percentage of 20% and more and the distance from the Golden Crosses & Death Crosses and showed the crash percentage as results of that. Surprisingly the weekly Golden Cross are 50-50 chance not the normal with indicators so the results are shown not plotted for the weekly. As for the daily all the work is plotted on the chart for your reference. Feel free to print, share, redistribute and publish this study for the benefit of any one out there. How to read the table below, just follow the steps: 1. Fist percentage is the gain of US10Y from the last reasonable low. 2. Second percentage is the % of the actual crashes. 3. The distance between the Gold Cross & the peak of the crash it self. 4. G.C = Golden Cross. D.C Death Cross 244 % up So far- ???? so far 144% up -20%- 305D G.C 59 % up -20%-70D G.C 70% up -57%- 20D D.C 64 % up -50%- 363D G.C (-24% Down) -22% -357D D.C xxx. 18% up -20%-78D G.C 28% up -36%- 130D G.C 43% up- -27%- 53D G.C 3 G. Crosses Vs 4 D. Crosses "Irrelevant weekly" 6 G. Crosses Vs 2 D. Crosses " 75% G. Cross " --------------------------------------------- Ideas:
SP:SPX
by samitrading
6
NZDUSD might look fantastic for sellHello guys USD is strong pair at the moment. All USD pairs are moving in correlation so we should take advanta of it as we already did with usdjpy in previous analysis. In this scenario sellers broke important lower low level, which was improtant for us to take advantage of it. We draw you a new support level at 0.67025 which presents safe entrance. If price can broke through this support level, you can sell position. Overall target is at 0.65941. For elite members; you can easily entrance before, around spot price is at the moment, but we still need more data. Once we get clear facts, see ya in our chat. Check also previous NZDUSD analysis
Short
by EliteFxAcademy
CORRELATION COEFFICIENTS on FOREXHello everybody! Professionals have been aware of correlation for a long time and use it profitably. The essence of correlation is not difficult to understand and using it in trading can significantly increase your profit. Correlation coefficient of currency pairs – what is it? Correlation is a statistical relationship between two or more random variables. The correlation coefficient is an index of the interdependence of quotations of different currency pairs. Correlation of currency pairs is divided into two types: direct (positive) and inverse (mirror or negative). A positive correlation is a similar movement of quotations of different currency pairs. Inverse correlation is the reverse movement of the exchange rate of different currency pairs. For example , EUR/USD and USD/CHF are in a mirror correlation because both European currencies are against the dollar. Any change in the euro affects the franc exchange rate and vice versa, on the chart, the price of the euro and the pound moves the other way around because in the EUR/USD pair, the dollar is in second place, and in USD/CHF in the first. Method Analysts have come up with a method that makes it easier to understand the correlation, it is called the correlation coefficient. Using it, you can understand in which range each pair is relative to the other, where +1 is a complete correlation, and -1 is the opposite. The stronger the link between the economies, the stronger the value tends to unity. Let's consider the main ranges of coefficient values and their impact on the currency pair: • 1 - Denotes the same movement of currency pairs. * From 0.9 to 0.5 – High dependence of currency pairs among themselves. * From 0.5 to 0.1 – There is a decrease in correlation. * 0 – There is no correlation, the instruments do not depend on each other. * From 0.1 to -0.5 - Characterized by a decrease in correlation. * From 0.5 to -0.9 – An increase in correlation and a change in the direction of movement of currency pairs in the opposite direction. * -1 – Inverse dependence of currency pairs. One price is going down, the other is going up. Trading options Novice traders often think that they reduce risks when they invest in different currency pairs, but at the same time they do not understand that a large number of pairs correlate with each other. Forgetting about the correlation, you can start getting double losses. Correlations can be used to confirm signals. For example , the analysis of the EUR/USD chart showed growth. To make sure that the forecast is correct, you need to get a reverse confirmation for USD/CHF. Sometimes, to confirm trading signals, a comparison of three assets that are minimally related to each other is used. Take for example EUR/USD, USD/JPY and EUR/JPY. • If EUR/USD is predicted to go up, then the forecast for the reverse currency pair USD/JPY should signal a fall. In the event that there is no signal for USD/JPY, then it is necessary to carefully study the behavior of EUR/JPY. No matter what tactics a trader uses, you always need to remember about correlation and use several pairs with positive and negative correlation in the analysis to increase the accuracy of the forecast. In addition, correlation helps to hedge transactions. Having decided to invest in one currency pair, you can divide the investment amount into two parts and invest the second part in a currency pair with Time interval in correlation analysis The correlation has the ability to change depending on time. It may be that the daily correlation = 0.6, but when switching to a monthly interval, this value increases and shows a strong correlation. There may be an inverse situation, when the correlation drops relative to the selected interval. Pay attention to this when analyzing. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
16
CRYPTO MARKET CAP & COVID19 DEATHS - Conspiracy?! Coincidence!? Hi, this is CRYPTOFILIO, your dark knight in the lightness! This nugget of truth is about DEATH and CRYPTO..... Almost as correlated as death and taxes... The blue line is the crypto total market cap and the yellow line is COVID19 DEATHS in the US (same scale and percentage). I'm not saying crypto causes covid or covid causes crypto - or eggs cause chickens or chickens cause eggs. Can you handle my cold hard crypto factoids, while I handle your warm, soft.... If a star fell from the sky every time I thought about you, then the sky would be empty... And, consequently, billions of innocent aliens, whose planets fell out of orbit... would suddenly die. Think about these deep thoughts for your shallow life!
CRYPTOCAP:TOTAL
by cryptofilio
JICPT| Omicron, VIX, BTC and global marketsHello everyone. What a volatile week for investors. I just got the time to write down something after a busy week. First of all, Fed turned to be hawkish. Taper may be accelerated according to what the Fed chair said earlier this week. In addition, He said transitory should no longer be used to describe inflation. It seems fed started to realize inflation became an issue. What feared the market is that rate hike may happen much sooner than expected. Secondly, the first case of omicron variant of Covid was detected in U.S on Wednesday. That's another blow to the market caused by uncertainty . I see VIX continues going up after the downtrend line got violated last week. Also, the weak economic projection has been reflected in the US 10Y yield. I see it went all the way back to the old range(0.994-1.386). So far, we still need at least 2 weeks to understand the features of omicron, especially, if it can make the current vaccines less effective . If omicron intensifies the severity of the situation, fed may postpone the rate hike. Thirdly, it's job data released on Friday. Nonfarm payrolls increased by 210K in Nov. ,well below the wall street estimation of 573K. Market shrugged off the data at the first place, then turned negative at the open. Nasdaq was down more than 300 points. I did some research on the relationships between inflation and S&P 500. Guess what, high inflation doesn't mean weak broad market index. inflation S&P performance 1980: 13.5% 25.8% 1979: 11.3% 12.3% 1974: 11.1% -29.7% 1981: 10.3% -9.7% 1978: 7.6% 1.1% 1977: 6.5% -11.5% 1973: 6.2% -17.4% 1982: 6.1% 14.8% BTC is another asset I want to discuss here. After the institution joined in, its the correlation with stock market became very high. With limited liquidity, volatility is expected to be high until it reaches attractive buy zone. Finally, I'd like to recommend a potential buying opportunity for Nasdaq around 15200 where the long-term MA meets demand zone. The long-term MA in red color has been respected well since April of last year. Give me a like if you're with my view. Thank you for your support.
CME_MINI:NQ1!Long
by JICPT