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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.

BSE Metals Index

The BSE Metals index could be completing 5 waves up near the upper end of the channel from the wave 1 high. The rally above the March high was not wave 3 as earlier considered. We may only be completing a larger degree rally in the Metals sector now. And accordingly a pull back or retracement of the gains may follow.

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US 10 year T Notes

After a long wait the US 10 year and 30 year momentum indicators rolled over yesterday and tonight they broke the rising channel from the July low so the move up should be complete. The bond market started its next wave down. Unless it is part of a more complex rise, we should anticipate that wave 3/C down long term has finally started. Prices sold off from the 20 month averages. Next will be the broader rising channel from the March low.

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Nifty Small 100

Nifty Small 100 - visually all these indices continue to look like expanding patterns marking the end of a trend. One look and there is no reason to believe otherwise. Let the world buy wave E but wait for a confirmation that it is over and rolling over. The trend reversal from wave E up is always brutal.

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