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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 10 year T Notes

The US T notes broke out of the ending pattern in wave 5 and this should mark the bottom for Bonds and a top for US bond yields for some time. Going back to the wave 4 high is not ruled out.

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US 30 year T Bonds

US 30 year Bonds - have been in a decline and in wave 5 for a while. Amidst the most negative sentiment it has now formed an ending pattern at the lows with a small positive divergence in the RSI. Once a move up starts it should retrace a lot of the losses in wave 2 up of larger degree.

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JP Morgan

Once in while you must go crazy with your imagination. So JP Morgan fits the bill. A flat correction from 2000-2009. And then a move up that looks like an ending pattern. Except that waves D and A are not overlapping. So you can argue that it is wave 5. That too should be ending as wave 3 is shorter than wave 1 and so the 5th should be shorter still. The implications remain the same for an ending or a 5th. The Fibonacci ratios fit the expanding structure. With the ending now at 123.6% of wave A, and can be wave B of an expanded flat. If so long term wave C of an expanded flat sends JP Morgan back to 12.20$. This is a figment of EW imagination based on where we are today.

JPMKORGAN

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