LEAD MCX Bonds VIX Euro Dollar ADR DJ stoxx

Published: Fri, 03/03/17

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Dear Members,

03 MARCH 2017

Indiacharts Market Analysis including the Insiders updates on Lead Mcx, Dollar, among others, published over the last few days. Of course I remain bullish on inflation and waiting to see the next wave in the Dollar show up which should be a major trend reversal, the exact opposite of what the street is expecting. As always contrarian to popular belief. My equities view and asset allocations reflect it.

Euro

The Euro has been facing resistance near the daily averages over the last few days. The daily momentum in the meantime finally managed to turn up enough to trigger a buy crossover. So Wave 3 up should be in progree, however it would really help once we cross above the 20dma near 1.0638. The move would set the stage for forming an inverted head and shoulders bottom formation on the Euro dollar pair, with the neckline resistance [yellow line], near 1.081

euro-010317

DJ Euro Stoxx 50

Nothing has changed to change the larger view on Europe. The Eurozone represented by the DJ Euro Stoxx 50 index shows That wave C of 2 maybe over just below the 61.8% retracement mark. Waiting for a clear sign of wave 3 down to start. The entire move up since 2009 ended in 3 waves at the upper end of the long term channel. The bounce back this year in that sense is only a counter trend move till proven otherwise.

dj-stoxx-010317

ADR index

The Bank of New York ADR index has been edging up slowly within wave E of a wedge like formation for months now. Price has still not touched the upper yellow trendline which is close to 135. We maybe forming a wedge near the end of wave E shown in blue and could be close to completion as well after one more push higher. All this also brings us close to the Oct 2015 swing high seen in the index.

adr-020317

US 30yr Bonds

The 30 year bond price has been in a trading range for 2 months that looks like a triangle. 149.80 is the lower end of the range where wave e of B should complete. Following its completion we should expect wave C up to unfold. Rising bond prices have evaded me for a while but we now have multiple bottoms at this level that I believe should eventually lead to higher prices [lower yields]. This might have nothing to do with the FED hike expectations I think but lets see. A 25 basis hike might be priced in at these yields. Bonds might just get the safe haven bid in wave C up.

bonds-020317

Lead Mcx

Lead MCX - completed wave II and started Wave III. I know I said so at the start of FEB, it moved up to 165 and sold off. But that does not change the interpretation. Wave III did not start then but is the next wave progression from here. Daily momentum has crossed back into buy mode yesterday and III=I now points to 184 from here. Support is at 148.

lead-020317

Bonds v/s Equities

I have no problem noting that US equities rallied from the point bonds bottomed. But clearaly bond market rallies are associated with equity declines [Dow in this case], and the reverse. So the bond market crash [upper half of chart], is associated with a stock market rally since June [Brexit]. However even after bonds bottomed in Dec they have not taken off upwards and equities have so it is a long wait but sooner than later when you see bond prices get a bid again it will cause an equity market decline. It is just history

bonds-equities

VIX - Volatility index

The US CBOE VIX has not been making new lows with the new highs in the US stock market. An inter market divergence that maybe indicative of a impending trend reversal.

cboe-vix-020317

Dollar Index - The Big Picture

The Big Picture - The Dollar index follows cycles and is due to turn down into the next 7 year bear market sooner than later. This chart of the dollar index says so. If cycles repeat they should.

DXY-030317A

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Rohit Srivastava
www.indiacharts.com
For accurate market forecasting. Market forecasting is a study of past data to assess
future probable outcomes. It is our endeavor to discuss high probability outcomes for
traders and investors. However this is not a solicitation to buy or sell stocks futures or
options or any security. Trading in any financial market should be done with sound
knowledge and the help of a qualified investment adviser. Stocks based on the Elliott
wave model are based on the Fibonacci fractal of the market and momentum indicators,
targets are based on Fibonacci maths and are only indicative of what the mathematical
model throws up. This is not a recommendation to buy/sell.
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