USDINR

Published: Tue, 07/24/18

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While Nifty has taken off to a new high it is still below the Jan High, however Sensex is at an all time high. One more inter market divergence till it lasts. Maybe Nifty too will record a new high soon, however the guiding light for the last 2 months was the weakness in the Mid/Small cap stocks and their most recent bounce requires watching for a medium term signal. In my view once that segment turns weak the underperformance to large caps can go on for 2-3 years. So rallies from oversold conditions in stocks are just fine, judging their sustainability on Macro themes is going to be critical.

Most of the Macro themes I captured in the last 2 years came from markets that I watch closely like Commodities and currencies. The trend in Macro markets may also soon become the only thing that will drive equity movements even as Nifty has ignored USDINR for 4 months now. But such deviations are rare and will never last for ever. Here are some of my recent posts on these issues.

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Dollar Index

The Dollar index short term with support at the 40dema might once again shoot up to the upper line near 94.55 to complete the ending pattern. The chances of a top there remain high mainly because the two previous occasions it got there sentiment crossed 90% bullish and then prices turned lower. The extreme bullish narrative might be a contrarian signal. So apart from that final push unless we get a clear breakout the odds favor a top in the dollar. Then wave 3 or X down would be next. Back to 92 or lower.

dxy 240718

Crude Mcx

Crude Oil completed minor wave iv and wave v down is due. The top in July should be the final top for Oil so we are now trying to may the downtrend. While 4573 is the initial support the larger degree suggests a retest of the previous wave iv low near 4334. The 40 week average is at 4263

crude 240718

Zinc Mcx

Zinc Mcx - v=i goes to 162 and the previous swing low is at 156. We are about to start wave v of c down that should be the final leg of this move down. 156 is the extreme level and should be a good support medium term that might not break immediately.

zinc 240718

USDINR is back above the 20dma and taken support at the 20dma at 68.65, and as long as we are closing above it we are heading higher. While 3=1 points to 70.75 next the extentions within wave 3 mean that it could extend more. We will be able to update levels once the subdivisions become clear, but till a 5 wave rise within wave 3 is not done the move up is not over, so far we are in iii of iii up now.

usdinr 240718

US 10 Year Treasury notes

After days of noting the rising bond yields, everything followed, the 2 year was followed by a jump in the 30 and 10 year yields. This is the 10 year notes chart, breaking into wave iii of the wave. Eventually we should break the 118 wave 1 low. The 10 year yield 52 week high was 3.128% and we closed yesterday at 2.96%

notes 240718

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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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