XBI vs SPY: a tight relationship as a bull/bear indicator
Since VIX has been updating the lowest values ever and Gold value has been growing alongside the markets and sometimes even correlated with the US Dollar, traders were trying to find a valid bull-bear indicator that could show an approximate top of the historical rally on Equities.
In my opinion, DXY is a very valid indicator but there are more instruments that show a high level of correlation with the market and can be followed. One of them is a highly speculative Biotech index.
Notice, while the market is running in a perfect bull trend, Biotech are in a correction after a massive dump in 2015-2016. In my opinion, Biotech has topped back in 2015 and a new massive decline can be closely monitored to determine the whole market´s top.
The specilative instruments are normally the first to fall as their growth is commonly built by hot money that rush into a same small door once any sort of a real danger appear. Obviously, one cannot fully relay on the speculators only as we all know how quick they can be on restoring their positions. But if a joint analysis will show a real bear at some point of time, speculative instruments decline should confirm a change in the trend.
In my opinion, DXY is a very valid indicator but there are more instruments that show a high level of correlation with the market and can be followed. One of them is a highly speculative Biotech index.
Notice, while the market is running in a perfect bull trend, Biotech are in a correction after a massive dump in 2015-2016. In my opinion, Biotech has topped back in 2015 and a new massive decline can be closely monitored to determine the whole market´s top.
The specilative instruments are normally the first to fall as their growth is commonly built by hot money that rush into a same small door once any sort of a real danger appear. Obviously, one cannot fully relay on the speculators only as we all know how quick they can be on restoring their positions. But if a joint analysis will show a real bear at some point of time, speculative instruments decline should confirm a change in the trend.
Kommentar:
SPY and specially Nasdaq currently diverge from the XBI fund. Lets see if it works as a signal
Kommentar:
If everything goes well, Biotech is almost at the target
Kommentar:
Please, follow your strategy! Always!
If there is no strategy that has proven itself successful, please do not trade with real money!
If there is no strategy that has proven itself successful, please do not trade with real money!
