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

Yields breaking out the yield chart looks like minor wave iii up starting. The slow grind up in US yields will draw global yields higher.

PicsArt 09-28-04.48.40


It is not the first time that this chart has been highlighted. In fact I published it a year back, and positions did unwind into the year end. In other words then short interest in VIX futures has hit record after record. No looking back. It is unusual and never happened before but the trade has not reversed and continues to be the game in town. Sure, whenever volatility explodes this will be the worst hit trade with everyone on one side, but so far perception of risk is abysmal.

vix futures

Nifty Small 100

Nifty Small 100 index has the most perfect chart for the set up that I have been considering for the Midcap Smallcap segment. That wave E of an expanding pattern is developing

This second chart published later in the evening day before to Insiders shows that momentum indicators rolled over as prices failed to breakout and today prices have broken the break down point and so wave E throwover should be compete. The implications should be going back to the lower end of this range and like the previous two occasions it can happen quite quickly.

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