BEI

SP500 vs GOLD vs DXY correlation

BATS:SPY   SPDR S&P 500 ETF
1802 4 3
This is macro analysis and shouldn't be traded upon, added to the fact that period of analysis is too short to make any reliable conclusion.

POINT A = Market moves with gold             , best moment to look for decoupling between the two, remaining unknown             is direction.

SP-TP closes the trade (signal) = Gold             moves in the opposite direction of the market, this has resulted in a down market and further correction in old prices (1 green box) and up market and ranging gold             prices (2)

What should it do now (?) on the last box? 1, 2 or something else? Point A is nice place to make assumption because SPY             and gold             are correlated, but here is unknown             .

If we consider where the market is doing now, we would be bullish and thinking that SPX             will hit 200-220 with GOLD             coming back to 1500-1600 (green box2). Otherwise we are bearish and the market looks to be at all time highs and gold             continuing it's long term down trend (wave#5) because we believe that the dollar will go up next year (2).

But in both cases we had a negative correlation, the signal triggered a DXY             rally. My point of view is that we cannot really make a conclusion other than the fact that DXY             will rally, Gold             is in a strong downtrend (i am short term bullish BTW) and may resume it early next year and SP500             is making all time highs.

Cheers!
BEI
3 years ago
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BEI
3 years ago
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BEI
3 years ago
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BEI
2 years ago
Gold is currently attempting to break the DMA50 to make the double bottom...considering the correlation has been negative with the market i will be careful with any longs. Why? because last time Gold crossed this moving average SPY lost 50 points and VIX is at 12.14, which has been an historical reversal point for the market in 2012.Oh, and of course the usual: all indexes look good on daily charts but weekly and monthly says that they are all smocking crack. Does not seem to be a failed attempt to do so because GDX and specific miners are quite strong since christmas.
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