TechnoMeter

The trend is undeniably weak since hitting a record high in June, the weakest of major global indices at this time. The euro continuing to press on to two-and-half year highs is certainly not helping the cause for investors. The correlation between the DAX and euro is a strongly negative 87% over the past three months. For traders, the trend higher in the euro, lower in the DAX has provided opportunity in a low-volatile global market environment. It’ll be interesting to see if the strong relationship between the two will persist should we see a turn in the euro (As we discuss regularly in webinars, correlations can get turned on their heads without warning.)



The DAX volatility benchmark – VDAX – is trading up over 14, which still isn’t very high, but certainly an improvement from the string of sub-10 readings we recently saw in the VIX, the volatility benchmark for the S&P 500. So, if there is a major global index to look to for volatility it’s the DAX, along with the Nasdaq 100, which has also experienced volatility in its own right. The Nasdaq 100 volatility barometer – VXN – is trading over 14.

more...