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 IT index

The IT index went past the 2015 high this month. For long I did think that it was the final high. So I have to revisit it and this is what best mabe considered. Wave 5 can go to the upper trendline of the highs near 16000 for this index that is currently at 12688. In this within wave 5, 1>3>5, in other words wave 5 will be shorter than wave 3.

bseit 290118

Ethereum - ETHUSD

Ethereum - ETHUSD - was not wanting to look at more than one crypto but I got a message that said that only BTC is going down and others are up.   Upped my ante, there maybe some lesson here, and there is. An inter market divergence occurs when one security in an asset calss makes a new high low without the other one confirming. So In March 2009 Midcap indices made new lows without the Nifty and that was the last low of that bear market. In 2007 Oct US markets topped but Nifty went on to new highs till Jan 2008. So it is not a surprise tha Bitcoin topped in Dec 2017 but Ethereum carried on till Jan 2018. What is interesting is both have a triangle in wave 4 that completed in Nov. In Bitcoin I have shown a rising triangle called a running triangle but in the chart below we have a symmetrical triangle in wave 4 and then an overlapping wave 5. So i think it is late but done. And unless the highs are surpassed what you witnessed was nothing but an inter market divergence. The lower line of the lows is at 820 so a break below 820 would confirm trend reversal and wave C down to the wave ii or wave 4 swing lows.


US 30 Year Treasury Bonds

The Long Bond is getting to break point, the story has been slowly moving from the 2 year then 5 year then 10 year breaking down. The 30 year, TLT, has lagged behind. This monthly chart shows that we maybe about to hook a sell signal again. The indicator is an upside down or inverted Momentum. So the up move in the green indicator is a sell signal. It could be a big move down in the long bond and a jump in yields in the weeks ahead. This is now immediate.


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