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Standarddevation

Next Week's IWM, 21 Day Pivot Standard Deviation RangeLooks like the medium term bias is to the downside for small caps, as we see the weekly pivot (red solid line) fall below the monthly pivot (dark solid line) with AMEX:IWM closing below both. Both deviation boxes represent two standard deviations above and below the a moving monthly pivot. We may see demand in the lower deviation range if we fall to start off the week. A rally to start of the week will likely be met with resistance from our pivot points and a fresh downward move from the 21 day moving average. Investors that want to take advantage of this medium term bias could short volatility in the short term (June/July) for IWM using AMEX:TZA but bet bigger on long volatility in the longer term (September/January2025). Take any short term gains to the upside and hold onto your short thesis heading into the second half of the year, into 2025.
AMEX:IWMShort
by D1Finance
S&P 30m Analysis: Unveiling the Perfect Sell Setup for Maximum📈 S&P 30m Analysis: A Perfect Setup! 🎯 ✅ Price successfully captured its buy side liquidity and formed a breaker block, signaling a prime opportunity for a sell entry. 📉 Targeting the untouched sell side liquidity, traders can aim for a remarkable 6.5 risk-to-reward ratio. 💰 With the option to book partial profits at 2.5 deviation or hold for the ultimate gain at 4th standard deviation, this trade is a true gem. 💎 EIGHTCAP:SPX500
EIGHTCAP:SPX500Short
by Furqan_Malick
1
Possible double bottom? I'm bullish on LTC, trend is positive and a double bottom already happened, but expecting crypto market dump soon so lower prices ahead are to be expected IMO. This is also confirmed by negative (statistical) skewness trend (pale red line), and negative volume trend yet to breakout. I see a possible double bottom forming on LTC on an important resistance. Based on previous volatility, I expect a sigma 3 move (3 standard deviations) to the upside as target for the pattern and next peak, which is about 110, which is also an important price level.
BINANCE:LTCUSDLong
by ManuNotWill
An easy way to lower the risk profile of your stock portfolioThe correlation between Visa and Mastercard creates an interesting investment trick. I began this analysis not even looking for the correlation between these two companies' stock prices. But rather I was looking for some chart patterns using a stock screener. At the top of the list, these two companies emerged. As usual, I was going to go through the stock charts of all the companies in the list briefly to determine if they hold any chart pattern merit. However, as I scanned over Visa, and then Mastercard, I noticed they looked extremely similar. Weird. I then opened up Tradingview and put these stocks in. Side by side they look the same. These two companies have very similar price movements. No surprise, they are very similar companies. They are direct competitors. They are both big players in the global credit services market. Transacting trillions of dollars in total payments volumes per year. They’re both tech companies that connect the consumer and the merchant digitally for transactions. They have been seen as rivals for over a decade now. Neither Visa nor Mastercard are involved in extending credit or issuing cards. They work in a co-branded relationship with the card provider. That's why you will see their logos on your credit card but won’t see a full absolute Mastercard/Visa credit card. Visa is generally larger in terms of the transaction, purchase volume and cards in circulation. However, Mastercard growth has been picking up and may see a catch-up. Now let’s get back to the price movement analysis. I have split this up into three time periods and then done a Pearson Correlation Test. The first period is the matched IPO date to the current date. The next is the last 5 years and then the last 2 years. The reason for the three time periods is simple. I want to do a full IPO to current date analysis to get the full picture and long-term perspective. A 5-year analysis because if you look at the charts above, that’s when the volatility in the stocks picks up. The last 2 years, because if you look again at the charts above, some crazy price movements have been occurring in the last two years that do not follow the past 14-year trend. The closer to +1, the closer the correlation. March 2008 - Nov 2022: 0.83 Nov 2017 - Nov 2022: 0.92 Nov 2020 - Nov 2022: 0.90 As you can see from the above stats both of these stocks have a close relationship with each other. A higher correlation in recent years. Of course, correlation doesn’t mean causation. However, the fact that these two companies are very similar and direct competitors means that one could form a reasonable conclusion. Not that one stock is affecting the other price. But rather than investors see these two companies as very similar. Such that when they exit one, they exit the other. Unless there is a big reason not to. But as you can see from the stats above. The stocks have a close correlation over the last 14 years such that even if one says that, let, for example, Visa is going to grow faster than Mastercard, the chances are - Mastercard wouldn’t be far behind. Henceforth, this leads to an interesting investment tip: Let’s say you want to diversify your portfolio by gaining some exposure to the credit services industry. Since Visa and Mastercard are the two leading companies, you chose them. However, you only have enough money to invest in one. But you also want to lower the risk profile of your portfolio. Is there a way both can be done? The answer is yes, since Visa and Mastercard have such a close correlation and are very big established companies they will most likely follow each other in price movement. Also, since they are two different companies, you will be diversifying your investment and will be lowering your risk. So, you divide that last portion of your portfolio into two smaller portions and buy Visa and Mastercard 50:50. This will mean you get the exposure you are after, the returns as well since they have a close correlation, and the risk is lowered since they are two separate companies. Quite a cool trick is not it? I created three different portfolios. Each beginning with $10,000. I invested the full out in two of them into Visa and Mastercard. The last portfolio had a 50:50 split. I then calculated the standard daily deviation and the annualized standard deviation. Here are the results: Visa 100%: Start value: $10,000 End value: $137,295.57 Annualized STD: 29.60% Mastercard 100%: Start value: $10,000 End value: $151,466.00 Annualized STD: 32.30% Visa 50% Mastercard 50%: Start value: $10,000 End value: $144,380.79 Annualized STD: 29.50% As you can see from the above stats, once the two stocks have been combined the standard deviation drops by 8.67% and the standard deviation is lower than the two stocks individually. This means the risk is lower. However, yes, the final value isn’t as high as the Mastercard 100% the returns are higher than the sole Visa 100% portfolio by 5.10%. So, in other words, the risk has been lowered than if you had individual portfolios and the returns are higher as well. Of course, the returns aren’t as high as they are in the Mastercard 100% portfolio, but the risk is lower while still ensuring higher returns. This means the Visa 50% Mastercard 50% portfolio provides an effective way to reduce risk while increasing returns. However, one thing to note is the maximum drawdown was the lowest in the Mastercard 100% portfolio. The second lowest is Visa 50% Mastercard 50%. Highest in Visa 50%. So, ensure that if you are going to follow this strategy, there is more research to be done and it is best worked in a long-term investment strategy possibly combined with dollar cost averaging. To conclude, if you want to see a higher return while lowering the risk profile of your portfolio. It pays to diversify with similar correlating assets.
NYSE:V
by BlackbearTrader
NQ1! IdeaThanks to a lower than expected CPI print (though just one data set for now) markets have attempted to breakout of a daily high set just two days ago. QQQ/TQQQ have also left a substantial gap in the process, no gaps do not have to fill immediately and sometimes will not for a varying length of time however the point still stands. Futures have now met Yearly VWAP's mid-band after reclaiming the -1 standard deviation band at the end of July. If this happens to get rejected here (13443.00 on the daily) I'd look for a bulltrap this week and then a swift pullback. Not only eyeing the gap below on ETFs but possibly as low as the next VWAP target below (Decade VWAP resting at 12584.75 at the time of writing). If it gets worse than that (doubtful at this point in time) Then perhaps the -1 standard deviation of yearly VWAP to be retested resting at 12174.00 at the time of writing. A clean break above current levels and a consolidation tomorrow and I'd suggest going/staying long into further upside. Good luck traders.
CME_MINI:NQ1!
by Todoubled23
$SNAP Long TradeHolding monthly VWAP's lower standard deviation band...monthly VWAP sitting at $11.71 currently. Big earnings tonight from %AAPL and $AMZN which could definitely change this in a hurry but for now, as long as we see the lower band hold at $9.48+ then over the next week or two could see a squeeze up to mid $11s before retracing lower trying to find more support. Zooming out on the weekly chart Century VWAP's lower standard deviation band rests at $6.85 which granting a failure and rejection around $11 I would expect to eventually fall to that level to test the lower band. For reference each level of century VWAP has served as an important support area since the beginning of this years fall ($43 and $25 +1 STDV band and Century VWAP respectively). Good luck traders/investors.
NYSE:SNAPLong
by Todoubled23
NZDUSD: TECHNICAL ANALYSIS - 0.70 RES, MA, STDEV, IV=HV & RR NZD$ Technical analysis - Remain bearish below 0.70 - 0.69tp1 0.68tp2 on a rate cut (Aug 10th): Key level close: 1. On the daily and weekly we closed at the strongest pivot point of recent times at 0.70 - this is very bearish as historically this is the strongest level (lower than post brexit). MA: 1. We trade below the 4wk and 3m MA - this is a bearish indication + we are finding some support at the 3m moving average where price currently sits, though NZD$ looks to try and push lower with daily candles skewing their spikes to the downside. We have been above the 6m MA since June which sits at 0.69 and likely offers our next bearish support once we break the 3m MA. IV/ HV: 1. Realised Vols have also unsurprisingly aggressively come off in recent days, likely a function of the RBNZ rhetoric fading. Plus Implied vols are seen steeper in the 1wk and flatter in the 2wk-1m - with 1wk, 2wk and 1m Implied vols trade at 13.12%, 12.66%, 13.09% vs HV 1wk 2wk 1m at 10.90%, 15.60%, 14.58% - this mixture between HV and IV shows there has been considerable volatility drivers in the past/ future which are causing the curves to converge and diverge in no particular direction e.g. brexit, RBNZ hawkish/ dovish comments, future rate expectations - which all distort the interaction between HV and IV. Deviation Channels/ Support levels: 1. We Trade near to the bottom of the 6m deviation channel at 0.69 as NZD economic assessment asserts downside pressure on the pair, nonetheless but we could see support here as 0.69 is also a price action support level. Looking at the 12m SD channel, we are trading just below the average price at 0.703 - hence there is definitely more room for downside and we have just crossed the middle regression line implying we are entering some downside deviation now, with the 12m -2SD resistance level at 0.675 which is in line with the price support level at 0.68 which is where i think we will head after the RBNZ announces a 25bps cut.. Risk-Reversals 1. 25 delta Risk reversals trade marginally bearish for NZD$, with current at -0.2, 1wks at -0.3 and 2wks at -0.6 and 1m at -0.95 - this suggest the NZD$ has a slight downside bias which concurs with the RBNZ's dovish stance and committment to cutting rates that was made clear in the July economic assesment (see attached). - 3m risk reversals trade with a similar downside bias to the 1m at -1 which shows the market expects extended NZD$ downside, likely a function of further rate cut expectations from the RBNZ. *Check the attached posts for indepth fundamentals*
Short
by QuantumLogicTrading