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.

Steel Prices

Since Steel futures do not directly trade we often look at other related data. Like this Hot Rolled Coil from CME that rallied from Sept'17 to date. Paused a bit now but near the highs. It tells you something about the steel price cycle.


US 10 Year Treasury notes

I have not written about it in a while. But my outlook was that wave 5 down in Bonds will start and the US 10 year has been falling with a rising stock market. Now rising commodities prices are also leading to expectations of coming rate increases. Funny thing is that is not what you will read in the news. As news media are reading into weak inflation numbers for a sign that there will be fewer rate hikes. To me it is not about few or more but the trend. The trend is down for bonds and up for crude. Yes at some point it is going to matter to markets that bond yields are rising and at that point we have to take note of it. Till then wait and watch.

notes 190418

PSU Bank Index

The NSE PSU Bank index completed a 3 wave bounce back in wave 4 and started to decline again from the 40day average. Wave 5 down may have started and 5=1 goes down to 2500 on the index from 2941 today. However I will not rule out wave 5 extending. Fibonacci extentions for wave 5 go to 2220, and the neckline break at 2956 has a long term pattern projection to near 2000. Essentially the small bounce back in these banks is over as the result season kicks in. 

psu banks 130418

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