/biz/ - Business & Finance

>>10953115
>it pretty safe bet that unless something crazy happens spy gonna keep climbing
>something crazy
like a near term commodities crash?
cuz thats what i think might happen

im fairly certain one of the major things that was spiking VIX today was the way oil was trading. it gapped up around 2% on the day in PM, then just before open started getting HAMMERED. never let up all day save for an absolutely pitiful bounce at close

see pic
>candles are CL1! (scale right)
>orange line is SPX (scale left)
>white bars are OVX (no scale)
>yellow line above is FEDfundsrate

if we look at the last time the FED was raising rates (years leading up to 08) we see a similar run in oil to around 80/barrel. we can assume that the dollar was doing a similar thing as now (rising steadily) and that oil was pretty much ignoring this and rising alongside it. suddenly after hitting highs, it started flapping around and then there was a beartrap when the FED switched to neutral policy. these sudden down moves in oil spikes OVX (which unfortunately wasnt around for this time so i cant compare). we can see how OVX spikes work essentially the same as VIX spikes. hi oil vol means high equities vol. now looking at the stochRSI, we see the monthly one pointing pretty much straight down.

imo the similarities in the FED policy and the charts themselves should not be ignored. we are in a period of relatively low oil volatility, and EM troubles are spiking the dollar nearly every other day now, w the FED funds continuing to hike. should oil crash out somewhat (likely imo) we will experience some increased volatility in the equities market.

now if this indeed a mirror of the 06-07 market, what will happen is that oil will recover, the dollar will start sliding hard as the FED switches to neutral, and then shortly afterwords (i guess were talking like a year or so on this month chart) the equities market will peak and we will head into a recession.