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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.

Pharma Index

The Healthcare index that captures the Pharma sector gave up in the last two days. The rise is a-b-c, a 3 wave pattern, and overall an X wave in a larger decline for the sector. Wave Z down should mostly start, that should see a new low again at the lower end of the 2 year falling channel near 12500. 

pharma-280717

German 10 year yields

The trend towards German 10 year yields is going to be global. In other words higher interest rates is not a trend situated in the US alone, it is spreading and will hit our shores no matter what. Here No matter what means even if RBI lowers interest rates next week bonds will eventually sell off and signal higher rates. The RBI cannot change this unless it intervenes in the bond market with OMOs. Or the government with a new Demo like scheme to fund the banks bond buying. Remember banks have used up more than their SLR ratios anyway.

german-10year

Bank Nifty

Bank Nifty RSI is touching over 83 in live trade going past its 2017 range in a similar pattern to what it did in 2016.

banknifty-270717

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