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Commodity Crash (Gold, Silver & Oil) and S&P 500 : VIX Correlations
Fibozachi ~ Technician's Corner
Commodity Crash (Gold, Silver & Oil) and S&P 500 : VIX Correlations
Yesterday's session (2/4) dealt a severe blow across the commodity landscape ... but who really cares about anything in the space outside of Gold, Silver and Crude Oil. GC (Gold Futures), SI (Silver Futures) and CL (Crude Oil Futures) each registered some of the largest daily losses (as measured by open-close range) since the infamous daily candles of 10.10.08.
The five pics below (5-minute, daily & weekly) illustrate [1] a near perfect, positive correlation (R-squared ~ 1) between Gold Futures (GC), Silver Futures (SI) and Crude Oil Futures (CL), [2] a nearly perfect, inverse correlation between precious metals & the US Dollar Index (DXY), and [3] an interesting relationship between the S&P 500 (INX) & the VIX (CBOE Volatility Index).
While such inter-market correlations certainly do exist, they are neither static nor foolproof.
(1) Gold Futures (GC) : Silver Futures (SI) 5-minute chart
(2) Gold Futures (GC) : Crude Oil Futures (CL) 5-minute chart
(3) Gold Futures (GC) : US Dollar Index (DXY) 5-minute chart
(4) S&P 500 Cash (INX) : VIX (CBOE Volatility Index) daily chart
(5) S&P 500 Cash (INX) : VIX (CBOE Volatility Index) weekly chart
That said: correlations such as those depicted below can provide secondary confirmation ( or lack thereof ), which savvy traders & tactically-oriented technicians may utilize to further strengthen their TA (technical analysis) and help aid in the "IITEM-izing" of ideal trades.
Identification ~ Isolation ~ Timing ~ Execution ~ Management
GC vs. SI
Gold Futures vs. Silver Futures (5-Minute)
- Please click on any of the snapshots below to open a large, crystal-clear picture -
GC vs. CL
Gold Futures vs. Crude Oil Futures (5-Minute)
GC vs. DXY
Gold Futures vs. the US Dollar Index (5-Minute)
INX vs. VIX
S&P 500 Cash vs. the CBOE Volatility Index (Daily)
INX vs. VIX
S&P 500 Cash vs. the CBOE Volatility Index (Weekly)
Disclosure: during any given session, we may trade any of these instruments bi-directionally. We are currently flat at the time of publication, eagerly looking forward to a much-needed break for us and (yet, again) another much-needed reflexive upward bounce across financial mkts to simply let off steam and 'reset' internal measures / metrics of trend / volatility & ATR (average-true-range) before the next rolling-dislocationary leg down, down, down within Primary wave 3 (circle).
For similar technical market calls and insights into the idiosyncratic machinations of financial markets; please visit our website ~ fibozachi.com. There, you can view a body of our analytic work as well as detailed explanations of the unique design development and technical methodologies within the proprietary technical indicator packages that we employ daily to perform a comprehensive technical analysis of financial instruments (stocks, options, ETFs, bonds, futures, FOREX, etc.) across interval periods of time, tick and volume.
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"This whiff of complacency underscores
how the VIX could be in just the second
inning of a multi-quarter trampoline ride to
circa 128."
Clearest analysis here yet, bro...
NEW YORK (Reuters) - Gold posted its biggest one-day loss since 2008 on Thursday, hitting a three-month low as a wave of risk aversion swept through global markets, triggering massive technical selling in the metal.
"If you are short, you stay short, because there is no real reason to be a buyer unless the market sold off more," said Rick Bensignor, chief market strategist at broker-dealer Execution LLC.
Hey Z - Yet another display of the amazing accuracy of Spectra bars and Fib lines -- particularly given your Gold/ Dollar calls beginning w/ gold top of 12/3 as recorded in 12/4 and and subsequent articles which you kindly retain on your site for the edification of your readers.
thanks for the uber-kind words, babbs. (check is in the mail)