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.

At what Point to Bond markets matter to Equities

Do bond prices or yields matter to equities? At what point should we worry because no one cares right now. This video shows the exact level for trouble to start based on the past. The point at which the falling bond market will have a direct impact is when it breaks last years swing lows. Till then the falling bonds maybe read by the market as an asset allocation from bonds to equities. Watch this video to get a perspective. 4 mins

US 10 year T Notes

Everyone should be paying attention to this, the US bond market will give a lead signal for interest rates in the near term. I am not sure markets will ignore it this time. No demonetization to save us when that happens. US Bond yields have been rising every day and the chart suggests this trend should continue near term.

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Nifty PSU Bank Index

The All In trade comes in once in a while, and today everyone is all in. Most bears would have given up on PSU banks after this recent move. But the bigger capitulation is of the bulls. Analysts that write reports are now all at once bullish across the board putting out a report before its too late. As always i never take sentiment lightly. If everyone is all in on a news event it must be wrong. the chart of the PSU bank index gives levels to verify this. The last time I turned bearish on the sector was May 2017, and we came very close to the falling trendline from the 2010-2015 tops shown in blue. But we did not kiss it. With yesterdays move we are above it but will this hold or end up as a Pinocchio bar at the end of the month. The chart shows that if you connect all the highs of the last year then today mornings panic high in the PSU Bank index hit just that line. So a valid move would require us to go above that. Else this would end up being simply wave E of a topping structure and the trend down will resume. This time with everybody all in and buying the dip. [of course not me]

nifty psu bank

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