S&P 500 Analysis & ETF Trading

[kiy]

Correlation Matrix
FYI...This is some of what Ziko and I started talking about this past week looking at oil ...currencies...$SPX...
Correlation Coefficient
Correlation Coefficient is a statistical measure that reflects the correlation between two securities. In other words, this statistic tells us how closely one security is related to the other. The Correlation Coefficient is positive when both securities move in the same direction, up or down. The Correlation Coefficient is negative when the two securities move in opposite directions. Determining the relationship between two securities is useful for analyzing intermarket relationships, sector/stock relationships and sector/market relationships. This indicator can also help investors diversify by identifying securities with a low or negative correlation to the stock market.

http://www.sunshineprofits.com/media/cms_page_media/120/correlationmatrix-532-450.mp4

Correlation Matrix...5/10/50day
Displays the "big picture"
The Correlation Matrix shows the markets that influence precious metals, gold stocks and juniors. It gives you an advantage over most investors that focus on the precious metals market alone.
Works as a litmus test for markets
It estimates the strength of influence that a particular non-PM market is about to have on gold, silver and corresponding equities in the coming days/weeks/months.
Shows "how much" the markets have moved together in the past
The correlation coefficient takes values from -1 to 1. A negative value means that a particular pair of markets moves in the opposite direction on average. A positive value indicates movement in the same direction.
Identifies the markets that go one step ahead
It enables you to pay attention to the markets that show the future trends. It also enables you to detect a possible catalyst of either breakout or breakdown.


Source: http://www.sunshineprofits.com/gold-silver/investment-tools/correlation-matrix/pm-correlations/

Correlation Matrix