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.

Emerging Markets or Commodity Producers ?

For People who cannot appreciate that some markets can hold on in the wake of a US bear market. 2007-2008 itself has the clearest evidence. For those who came in late... The S&P topped out in Oct 2007, but commodity prices liike base metals held on to their gains till May 2008 and Oil till June end 2008 along with the CRB index. The impact of this was that markets like Brazil and Russia continued to make new all time highs into May 2008, breaking their support levels only July onward after Oil was done and commodity prices fell along with equities.

Today, Oil at 60 is being well debated; will prices rise or fall? But if it rise and put it in context with the Wave counts of Brazil published today, it is indicative of the start of a breakaway in trends across different markets. 

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When Bitcoin peaked and crashed from 28/01 onward so did all equity markets, will that repeat? So far recently the Dow and BTC are falling together. That said BTC as explained below is on its path to sub 6000. No coming back anytime soon. This is the end of cryptocurrencies in slow motion


BSE Metals Index

The metals index has corrected in a triple zig zag on daily charts and the fall has taken it to the 40 week ema, a key support that has been a support for most of the last two years. The set up and wave counts therefore indicate that prices should head higher from here for the metals stocks. This even as the Nifty is in wave B of a counter trend bounce. This is going to be tricky either the recent lows break and we get a deeper correction to 61.8% of 1, meaning that still in wave 2, or the sector holds on to the support maybe rallies a bit but somehow holds this level against all odds. 

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