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Negativecorrelation

Macro Negative Correlation with BitcoinThe US Dollar Index TVC:DXY is negatively correlated with the macro Bitcoin BNC:BLX chart. Indicators like the Correlation Coefficient indicator will display swings from negative to positive correlation between TVC:DXY and $INDEX:BTCUSD. This can lead to a belief that they are not in fact negatively correlated. But, when you zoom out to a macro view of Bitcoin and compare, the dollar index's peaks correspond with Bitcoin's lows, while Bitcoin's peaks correspond with DXY's lows. At times, these corresponding peaks and valleys have occurred near the same dates and times, while at other times DXY has acted as a leading indicator for future movement for Bitcoin. Where will we go next? if DXY returns to its previous high and breaks it, I suspect Bitcoin will move lower on the other hand, should DXY move further down or get stuck within a range, it's likely that Bitcoin will move higher What do you think?
TVC:DXY
by dudebruhwhoa
6
DXY May Signal Next Crash Across Stock and Crypto MarketsWithin the four panels above are comparisons of major US market and the international Bitcoin indices with the US Dollar Index, $TVC:DXY. From top left to right: TVC:DJI SP:SPX NASDAQ:NDX BNC:BLX As we can plainly see, each one acts a a near mirror image going back to 2017. When looking at correlation via an indicator, like Correlation Coefficient, we would see regular swings from negative to positive on various timeframes and settings. Yet, when viewing both indices over the years as shown above, there are several observations: it becomes clear that there is a macro negative correlation between the dollar index and these major stock and crypto indices. There is also a consistent tendency for both to correct and eventually meet near the middle and/or see a crossover to the other side. Strong opposing reactions occur between these valleys of one meet or cross with peaks of the other (meeting in the middle or crossing), and when peaks of one drift furthest apart from valleys of the other. DXY often reaches local highs or lows prior to these market indices reaching lows or highs, or vice versa. One can act to forward indicate the direction of the other. It's certainly possible that any of these markets could instead signal DXY's next move, or even move together at the same time with it (both of which have occurred before and even in cases on the chart above). However, there has been a pattern since 2017 of DXY making local highs or lows prior to the indices above making their local lows or highs, at least when leading up to major spikes in DXY and crashes in markets, bringing them nearer to the middle. Should DXY move up and back above 105-106 and then 112, and continue, it may signal the end of these recoveries we've been seeing over the last year, and could point to crashes across markets. My present theory is that we may see something like double-tops with slightly higher or slightly lower highs, across many of these markets, and as DXY ranges between 101-106. This, leading to a breakout of that range and a move back above 112. Should DXY turn down hard instead, we may see extended recoveries and new ATHs until it bounces again off monthly support and heads back up. Many of the stock indices shown above are already near double-tops with potentially a bit more room to run up. Bitcoin hasn't yet caught up and has a lower weekly RSI, so it may be the last one to make a strong recovery before we see a downturn. *** related ideas linked in the related ideas section **** Thank you for reading! -dudebruh :)
TVC:DJI
by dudebruhwhoa
Triple Top for Gold if a Strong Move Back Up from DXYI've posted about this for a while now, DXY is presently negatively corresponded with multiple markets: Gold, Bitcoin, Dow Jones, etc. Should that negative correspondence continue and DXY makes a move back above 105, confirming a failed Head & Shoulders and then heads to 112 -> 118+: - Gold may confirm a bearish triple top and lose nearly half its value. If you zoom out to 3 month chart on DXY, the current Head/Shoulders looks more like a long term falling wedge that has broken out, re-tested the top, continued up and is now re-testing the top of a W pattern breakout. The long-term DXY chart looks incredibly bullish. That said, it could instead drop in the interim and give Gold and other markets a chance to run to new ATHs, first. Let's see what happens.
TVC:DXYShort
by dudebruhwhoa
Potential for a Pull-back as it Correlates with DXYIf you've seen my other posts about this - Bitcoin has clear negative correlation with DXY. You could pull up the Correlation Coefficient indicator and make an argument that it correlates positively just as often as it does negatively, but when you compare the charts with each other, nearly every peak corresponds with a valley vs. the other and vice versa. They are typically offset by some period of time if not at the same time. Also, try setting CC length to 35 and it provides a more clear picture of its long-term correlation. Presently, Bitcoin looks like an inverse head and shoulders re-testing its neckline. Meanwhile, DXY looks like a head and shoulders with a pullback that hasn't quite reached the highs of its right shoulder. Also, each shoulder and head of both head and shoulders have eventually corresponded with each other, in opposite directions, and Bitcoin has yet to have made a pullback. However, it may skip the pullback altogether should DXY continue down and move back below ~98-101. Or, DXY could instead move up above ~105-106 leading to pattern failure on both, and a strong uptrend on DXY / strong downtrend on BTC. Let's see what happens next! Please see my related posts below in the links to related ideas. Thanks for reading!
BNC:BLX
by dudebruhwhoa
3
Markets move back into IndecisionAnother update on the US Dollar index and its negative correlation with major markets. DXY has moved back into an area of indecision with regards to recoveries occurring across markets: Bitcoin, Gold, Dow Jones Industrial, Nasdaq are all negatively correlated with the Dollar Index, with few exceptions, over the last year or more. Many of these are also at major decision areas or have recently faced major resistances to further recovery. It is possible recoveries could continue while the dollar index remains in this area of indecision, or they could also remain in an area of indecision as well. The main point here is to pay attention to what DXY does next, and: -- For as long as it continues to be negatively correlated with these other major markets, expect them to do the opposite when DXY finally breaches and remains above or below the blue box above. -- They may also do the opposite for any major moves within the indecision area as long as negative correlation remains true. This is another major update to the following post: Plus a more recent major update related to Bitcoin: And, if you'd like to use the correlation indicator I recently made for comparing multiple markets, you can find it here: Please take a moment to hit the thumbs up button if you like this idea, and I'd love to hear your comments whether you agree or have an alternative view that you'd like to share. Thank you for reading and best of luck with your analyses and trading plans! -dudebruhwhoa
TVC:DXY
by dudebruhwhoa
Gold and the Dollar IndexGold and the Dollar Index have been mirror images of each other over the last year and a half or so. Near perfect negative correlation, with no signs of divergence from this. I'm expecting this will remain true for some time, creating an educated assumption that we can expect a near equal and opposite reaction from each other, and both are at major decision points: Gold is facing strong resistance to moving towards a new ATH and hasn't yet reacted. DXY is also facing resistance towards a stronger move up. One of these will do it, the other will likely not. For more context, confluence, and further details - follow my links below under the "Related Ideas" section.
OANDA:XAUUSD
by dudebruhwhoa
Bitcoin's Negative Correlation with DXY - Part IIHere's a longer-term look at Bitcoin's negative correlation with the US Dollar Index, in looking at an overlay of the monthly DXY on top of Bitcoin. CC also displays significant negative correlation, and during the brief periods where it has been positively correlated, that correlation has been insignificant. At least this has been true over the last two major bull runs/corrections and halving cycles. The two also look like a mirror image of each other, and as mentioned in previous posts - this makes sense. If the dollar is strong, we should expect Bitcoin to weaken, and vice versa. My previous post about this, here: The same is true for Gold vs. DXY, as shown below, and for stock markets as well, most of which have been positively correlated with Bitcoin, especially more recently since the 2020 March black swan event. Here are a couple different looks at this: From the perspective of DXY and its correlation with Bitcoin, Gold, Dow Jones Industrial, and Nasdaq. And then a look at Gold vs. DXY: Should DXY move up here, the Bitcoin market and other markets mentioned above may be in for much further and deeper correction. Conversely, should it move down, we could see extended recoveries or even new ATHs as shown in the diagram above. Either way, we should be aware of DXY's movements: Long-term DXY looks incredibly bullish, with breakout, after re-test, after breakout, after re-test: Meanwhile Bitcoin could go in either direction as well, and I would imagine it will go in the opposite direction of DXY here, long term. It could first reach 38k to create a new high following DXY's more recent low, and then head back down towards the lower target at 13k should DXY continue up: Long-term if DXY moves up beyond 112-114 -> 118-120ish, expect blood in the markets.
INDEX:BTCUSD
by dudebruhwhoa
1
Bitcoin's Negative Correlation with US Dollar Index It is already pretty obvious to any analyst - a stronger dollar means a weaker crypto or stock market, and a weaker dollar trends toward stronger crypto and stock markets. As you can see on the chart, Bitcoin (BLX) has a crystal clear negative correlation with the US Dollar Index (DXY), as expected. So, why am I talking about it? Each time DXY has peaked, BLX has made a new low, and vice versa. A large majority of these major milestones first occur on DXY, prior to following in the opposite direction with Bitcoin. There is one exception noted above during the March 2020 black swan event, where DXY peaked after Bitcoin and stock markets bottomed. Otherwise, most of these events happen first on DXY, and then markets follow. Presently, DXY has closed its weekly candle above the neckline of a confirmed head & shoulders pattern. Is this just a pullback, or are we headed towards ~105-106 and a failed HS? If you zoom out on DXY's monthly chart, it looks more like a bullish re-test of a breakout, but still possible it moves back down into the 90s: Conclusion: Can we use this assumption again now: that DXY can an early indicator in determining direction of Bitcoin and the crypto/stock markets as a whole?
BNC:BLX
by dudebruhwhoa
1
DXY Negative Correlation to MarketsYesterday just before FOMC notes came out I was watching an ascending triangle pattern in DXY form, test and hit profit target. I noticed that the S&P 500 was moving in perfect negative correlation to DXY during FOMC. So I decided to measure the correlation between the two and found significant negative correlation on the daily. The weekly chart shows strong negative correlation during times of market turmoil. 2022, March 2020, Early and Late 2018, 2015, 2016 If there is a significant selloff in markets, I expect the dollar to continue to strengthen into a weakening economy. Same can be said for a selloff in DXY one might anticipate a rally in markets. Thanks for Reading.
TVC:DXY
by SPYvsGME
3
Resistance On Crude Oil Is Support On USDCADHello traders! Today we will talk about Crude oil, USDCAD and their negative correlation in the market. As you may already know Crude oil and USDCAD are in tight negative correlation, not tick by tick, but they are mostly in the same shape, just inverted. Well, want we to point out is that correlations are very important to get the right approach to the markets. And, if you combine them with EW and some other technical tools, then sometimes can be much easier to recognize the pattern and direction. Let's dig into the charts. Crude oil can be forming big triangle and now when it's trading nicely within a corrective channel and right at the upper triangle line and potential resistance, we wonder if it will break up or it will turn down. But, if we take a look on USDCAD, from EW perspective we can see quite nice bullish formation that can send the price at least towards the upper triangle line. So, if we consider all the evidences, then the next move should be down for Crude oil and up for USDCAD, at least into the projected minimum target area, if not even further. Trade smart and wait for confirmations! If you like what we do please like, share and follow us. 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.
TVC:USOILEducation
by ew-forecast
1
APPLE 4% ALGO SPIKE? LOWER VOLS & VOLU; HIGHER NEGATIV VOLS CORRAlgo spike 4% to $101.8? At 18:19 BST Apple stock surged from 99. to $101.8 and back again all within a minute. It was Likely to be algo driven OR a data/exchange error - though no news outlets reported either or offered any other speculation. Though $101.8 is the closest near by resistance strong hold for apple, so it would be a weird coincidence for a "data error" to trade to that price - equally as possible none the less. IMO, because there was little volatility after the event and also because Apple is now struggling to break the $100 i think it was probably a data/exchange error. If it was an actual demand induced algo spike, the stock would have experienced signifcant price volatility after the event as much of the markets TP/SL levels would have caused a large wave of stochastic automated buying/selling as positions are closed out. Further, if the spike was real, apple should have been able to trade above $100 easily today; 1. As $101.8 would be a clear bull target level. 2. as the spike would have removed all of the $100TP selling pressure last night - meaning there would be little volume left to continue long squeeze selling today (which annoyingly has been the case). Volume Apple Volume fell significantly on Monday by 40% to 23m vs 39m (1month av.) and 43m (6month av.). In the first half of trading today, volume was also 7% down from yesterdays first half at 11.23m vs 12.0m - signalling today may continue the bullish trend. This is Bullish IMO as it shows that at these prices holders are not willing to sell their AAPL risk at these prices, as they seek higher prices before they offer higher supply, hence volume stays low and the stock trades with a bid bias - hence the gap up at the open today - illustrating the supply & demand disequilibrium caused by low supply side liquidity and maintained order demand. Volatility & Apple vs VXAP Correlation We continue to have a bullish view from a vols perspective as vols dropped yesterday despite an algo driven spike to $101.8 (4%). Apples CBOE VXAP continued to sell off, closing yesterday at 21.64 from 21.73 Friday. Also the correlation between APPLE and its Implied volatility index continued to fall deeper into negative territory - surpassing levels seen in the last bull run to $112 which peaked at 90% (92% to 94%), This reinforces the bullish volatility signal - as historically, a higher negative relationship sets the best environment for Apple price growth.
NASDAQ:AAPLLong
by QuantumLogicTrading