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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.

BSE Midcap index

As the index continues to strive higher in wave 5 of its move the BSE Midcap index hourly chart is still struggling at the 78.6% retracement mark amid weak breadth. So it will not be surprising that this index declines against the large cap indices as more stocks decline here on. It will need to breakout of this tight range for a positive trend to emerge in the broad market.

midcap-210617

US 30yr Bonds

US Bonds continue to rise in wave C of 2. The ideal level is near the upper end of the channel. Wave wise a 5 wave rise is to complete. The fifth wave is now extending into i-ii-iii-iv-v, and we are in iii, so a few more up down moves before it completes. Rising bonds keep the pressure on US equities for now.

bonds-150617

BSE 500

The BSE 500 has risen to a new high in 3 waves so is it wave b of an expanded flat. A meaningful RSI divergence also may develop here if prices drop. 

bse500a

The hourly chart shows a triangle like formation in wave c above so the triangle maybe complete today and prices have still not broke out of the range. A bullish breakout would mean that the triangle is wave iv of an advance. Otherwise the triangle should mark a distributive top.

bse500b

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