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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.

Google

Google - or now better known as Alphabet, the stock has been in the long term 5th wave for a while. I would have liked to believe that it would be complete by now but as shown on this chart till the parallel channel support at 907 holds there is room for wave 5 of 5 up to 1050 to develop in the coming months.

google070917

US 30 year Treasury bonds

US 30 year bonds are still within retracements limits for wave II up, so while there is no change in the wave counts or view, wave II has gone up to 78.6% and wave III remains far overdue to start. The third wave in bond yields would see big jump in US interest rates and rub off on other bond markets around the world as well.

bonds 280817

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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