Silver S&P Sugar Soya Pharma Cotton

Published: Mon, 07/31/17

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Dear Members,

31 JULY 2017

The weakest sectors remains the weakest and the strongest the strong. You need two lists in your hand. So Pharma stocks just ended a dead cat bounce. But a silent trend taking hold is that of rising yields even in Germany. After my fear around Indian Agro prices and the subsequent correction, it looks like Agro prices have developed legs.

German 10 year yields

The trend towards German 10 year yields is going to be global. In other words higher interest rates is not a trend situated in the US alone, it is spreading and will hit our shores no matter what. Here No matter what means even if RBI lowers interest rates next week bonds will eventually sell off and signal higher rates. The RBI cannot change this unless it intervenes in the bond market with OMOs. Or the government with a new Demo like scheme to fund the banks bond buying. Remember banks have used up more than their SLR ratios anyway.

german-10year

Pharma Index

The Healthcare index that captures the Pharma sector gave up in the last two days. The rise is a-b-c, a 3 wave pattern, and overall an X wave in a larger decline for the sector. Wave Z down should mostly start, that should see a new low again at the lower end of the 2 year falling channel near 12500.

pharma-280717

Silver

Silver - reached the upper Bollinger band at 16.82 and sold off. Staying below this level prices may start another decline back to 16.15 and then 15.50 and then 15

silver-280717

S&P 500

The S&P 500 closed the week lower [as did the Nasdaq], and it has been kissing the upper end of its long term channel again and again. It should be a major resistance.

snp290717

Sugar Ncdex

Domestic sugar prices did not fall with international prices earlier. Now as global prices are making some early moves higher our own prices are declining, but still very slowly. Wave C down is forming, we need to let it play out before calling a low in domestic sugar prices.

sugar-310717

Cotton Seed

Cotton seed surpassed the C=A target level of 1522 on the downside. The most recent decline is 5 waves and we should be in wave 5 of C. The next trend reversal up therefore should be a bottom in prices that is longer lasting. The RSI daily and weekly is now in the 23-25 range making it quite oversold. Watch for a clear sign that prices turned higher from the lows.

cotton-seed-310717

Soy Bean Ncdex

Soy Bean - prices broke out of the expanding triangle. Simple measurement of the expanding patterns size and projecting it upwards gives us a level of 3440. and suppoft is at 2993 and 2937.

soybean-310717

Dhaanya Index

The Dhaanya index of agro commodities has taken support at the rising trendline from 2013. I raised a red flag in April on a possible deeper correction in the segment and we have seen falling prices. The possibility of 5th wave ending was considered but we have now taken support at the 40 month average and still making higher tops and bottoms longer term so lets keep the original view in mind. We are in wave 5 long term but as shown below if this level holds it could be early stages to much more upside.

dhaanya-310717

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Rohit Srivastava
www.indiacharts.com
For accurate market forecasting. Market forecasting is a study of past data to assess
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