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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 Healthcare Index

Wave Z if the final wave of a complex correction and the Pharma index appears to be in wave Z now. How far down we go in this is all to be seen. The parallel channel goes to 11500 for the BSE Healthcare index.

health 110518

Capital Goods Index

An Ending Diagonal occurs in the last phase of a trend and not the start and this is a long term pattern so the implications are long term and multi year in nature. If proven true the implications are to go back to the wave 4 low at 5350 from 19243 close today.

CAPGOODS

India 10 year Government Securities

Bond Yields in India have become sticky in case you did not notice. The Govt postponed its borrowing program to the second half and helped create wave 2 of 5 down last month and now we are in wave 3 up that could see Indian 10 year yields rise to 8.2% in the coming month. Wave 5 is extending and could eventually draw us closer to the 9% mark in the coming year. The point is we are developing a strong up trend in bond yields that is far from over. The impact of OMOs announced on Friday was short-lived and absorbed in a day.

gsec 090518

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