Commodities Dollar Financials VIX

Published: Mon, 01/14/19

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It has been a quiet start to the new week, but after 5 days of a negative A/D ratio volatility appears set to rise. On the other hand deflationary forces are taking hold as is seen in the weakness in commodities prices near term. After the recent bounce in stocks and commodities they are facing resistance at key averages. Here are the updates on this from the weeks posts.

VIX - Volatility Index

The US VIX has pulled back to the lower end of the rising channel for this advance. A good support to start higher again.

vix 110119

BSE Finance Index

Last Year I started using the BSE indices to show the loss in momentum sector by sector and that might be relevant again. the Bank index is useless at times thought it is traded because of only 12 stocks inside it. The BSE Finance index has 117 stocks. So the daily momentum was back in sell mode for this index while it is at the lower end of the wedge pattern. After a 70% retracement done the next major wave down is around here. After long we say weakness come back to the PSU banks that everyone is hoping to get bailed out. So the decline is spreading across the financial space. In the big picture this index fell far lower than the FEB lows as stocks fell more, and the bounce is also big, and we may have a sharply downward slanting H&S. Wave C down follows.

finance 110119

Dollar Index

The Dollar index took support at the lower end of the falling channel and could have bottomed, a move above the swing high of 95.6150 would help in this regard, signalling trend change from the lower top formation.

dxy 140119

Crude

If I was looking for a 3 wave bounce then it completed yesterday near the previous wave iv high and upper Bollinger band. Any move higher would be a minor extension toward 54.50 but it is not needed. The move down could start right away in wave 3 or C down. This is a longer term wave count where 3=1 from Fridays high goes to 29.40$. The 20dma near 48 is the first support level.

crude 140119

Aluminium Mcx

Aluminium Mcx - prices kissed the 20dma at 131.50 and sold off and if wave c down has started from that pivot then c=a goes to 115. A move below 124.75 would further confirm it. Larger degree we are in wave Y developing as a double zig-zag down.

alum 140119

Zinc Mcx

Zinc faces resistance from the 20dma at 177, watch on closing basis. Failure to cross it would count as wave iii down where iii=i from the recent high of 178.55 is at 155.50. The longer term chart shows a head and shoulders top and a fall below the 166.80 level breaks the neckline of the H&S which then would become a resistance.

zinc 140119

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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
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