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Inter Market Analysis

Inter market analysis is a series of articles studying related segments of the market to identify lead lags between trends in each segment. This can often forewarn you of impending changes in trend and allow for planning of required action based on it. For example midcaps v/s large caps, currencies v/s commodities and US markets v/s European markets and so on. In a global environment inter-market relationships are not restricted to a country but between countries and their respective asset classes as well.

Midcap Indices Gyrating

Midcap indices have been all over the place since May. These large gyrations are signs of a market with increasing volatility seen more at the end of a trend. So is the recent bounce back that has today morning retraced 78.6% of the fall in wave A simply a counter trend move, or Wave E of a ending pattern that will see it touche the upper line once again. It is hard to say. The fall may appear impulsive on hourly charts just as it did at the end of May but that might not be enough. All we can say is that these gyrations will eventually give way to an ending pattern in line with the already declining momentum on weekly charts.

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US 30 year Treasury bonds

US Treasury bonds sold off from the 61.8% mark and the upper end of a flag. Ideally wave II is complete and wave III down unfolds which should see bond yields spike up in the coming weeks. 

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Realty Index

Realty or should I say Reality index? The index stayed up so long in Wave C near the upper end of the channel that people start believing in it being a turnaround story. It still does not look like that. -A-B-C done we should be due for a complete reversal back to multi-year lows for the sector index and so for realty stocks.

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