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.

IPO Index

The BSE IPO Index has had a big run, and I have not written about it for almost two years because the last time I did it formed the blue expanding triangle and broke out on the upside. Then I was a bystander, Now it is possible mark wave 4 as a triangle in 2017 and a 5th wave started. But prices have given up unexpectedly. So if the yellow line breaks we can say that wave 5 truncated and the move is finally complete. A move below the triangles low at wave 4 at 4628 may also be a confirmation that the best is over for the 2013-2018 IPO bull market.

ipo 310118


After many attempts another VIX breakout attempt, the US VIX is a measure of Volatility of US stocks.

VIX 310118

Gold and the Budget

Two things to keep in Mind with respect to Gold. First that it is being discussed that the Gold Import duty can be pulled down from 10% to 2.5%, and that can have a negative effect on domestic gold prices as spot prices drop by that amount to adjust to the reduction in price. It might make it a good entry point. On the other hand one of the factors considered relevant for a weak rupee and Positive for gold in any currency is Real Interest rates. And this chart from the just released Economic Survey caught my attention. Real rates are negative for the US throughout this period as the US remains behind the curve on interest rates. And on the other hand Indian Real interest rates that had spiked are now rapidly in decline. Both favor higher Gold prices or a weaker currency that is positive for gold indirectly.


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