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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.

US 30 year Treasury bonds

The 30 year bonds are still holding up and in wave v of C up. The bonds might make one more push higher at least and get closer to the upper end of the channel before we get a meaningful trend reversal from the rising trend in bonds.

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BSE Midcap index

As the index continues to strive higher in wave 5 of its move the BSE Midcap index hourly chart is still struggling at the 78.6% retracement mark amid weak breadth. So it will not be surprising that this index declines against the large cap indices as more stocks decline here on. It will need to breakout of this tight range for a positive trend to emerge in the broad market.

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US 30yr Bonds

US Bonds continue to rise in wave C of 2. The ideal level is near the upper end of the channel. Wave wise a 5 wave rise is to complete. The fifth wave is now extending into i-ii-iii-iv-v, and we are in iii, so a few more up down moves before it completes. Rising bonds keep the pressure on US equities for now.

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