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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.

US 10 year T Notes

US T-Notes broke out of the inverted H&S pattern higher into wave iii. 

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US 30yr Bonds

US Bonds are quietly but surely rising. The 30 year bond chart shows that we closed above the 20/40 day averages. We should go higher

Higher bonds should mean lower yields

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Gold Silver Ratio

In deciding on Gold v/s Silver this chart makes it clear. Silver wins. The Gold Silver ratio is declining from the upper end of its long term range. Silver prices are therefore rising faster than Gold, except for the recent pause during the correction in Precious metals. The indicator should drop much further when prices move higher. Silver usually moves up 2-3 times more than gold. The ratio can go from 70 to below 45 as it has before. But if you chose Silver remember that it is more volatile both ways. If you do not like volatility then Gold is always s safer instrument.

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