Dollar Index Yesterday was an important day for the dollar as it gave up to break the 40day average and close below it. Last week i discussed why the Euro could bottom out and start its move toward 1.30, so has it? The rising euro is the clearest reason for a falling dollar. This week however I remained on watch for upside in the dollar because even as the dollar closed down last week, completing 3 waves up, wave c<a and so wave c was short. So there is always risk of extension; that can never be ruled out. The dip in the dollar therefore can either be wave 3 down long term or an x wave wit ..read more

FIIs have been unwinding their longs in the index futures segment again, and positions are now nearly back to zero. We have seen markets bottom near term from the near zero positions point recently but in 2012 after a negative divergence the positions went negative and short nifty. So this level has to be closely watched. I noted in the LSR that Volume PCR rises during market declines as markets panic and people buy more protection, so despite the high OI in Puts there is no volume. Even in recent days we have two readings of 0.39 near the lower end of the range. Lower highs in the VPCR at ma ..read more

USDINR USDINR – retraced 23.6% intraday at 65.29, and we are open to 65.12 at 38.2%, and this is wave ii of a larger move up. Once done wave iii goes to much higher levels; iii=i=66.20. We are in the second week of a 4 week cycle for rising USDINR pair, based on its typical cycle. EURO Euro – Wave 2 ended or is a complex pattern. So either wave 1 of 3 is forming or an x wave. 61.8% at 1.88 is the first resistance at 61.8% followed by 78.6% at 1.198. The near term trend is up for the Euro then ..read more

SUGAR CSCE Global sugar prices are again rising. So wave 4 triangle appears ruled out. EWI was considering it and I waited for a while and now the price action of the months since July is a base triangle that is bullish. Prices are rising and a bottom may already be in place. Then we could be looking at a multi month rally in Sugar. We closed t at 15.13$ and a close above the 40 week average at 15.30 on a weekly basis would be good confirmation for a bigger move. LEAD MCX Most base metals are back into correction mode and the potential for a further rally appears to have deteriorated. So I wa ..read more

With the advent of so many indices there is always an index you will find to justify something. So while wave E has thrown over the upper line in the Nifty, I have changed it to wave 5 at the top, wave E is not ruled out on the Nifty 500 or on this new BSE Finance index with perfect touch points. Unlike the Banking index that has less than a dozen stocks in it the BSE Finance index has 100 stocks in it. So it is a better representation of the sector or industry. This is a distribution pattern with pattern implications for a move down to below the neckline equal in size to the pattern itself ..read more

USDINR USDINR – has retraced 66% of the initial rally. wave I therefore think it is wave i of iii subdividing. iii=i would point to 66.45 or higher if extended. Today prices broke out of the downtrending line and closed above the 20dma so that was a positive sign. USDGBP USDGBP – wave iii up next points to 0.787 with support at 0.757. EURO The Euro hourly chart shows a flag and a-b-c rise. The structure of wave c is not clear, so it is over or a few more squiggles or attempts at the upper channel can also occur. Once we break the flag however the move should be in wave 3 down to new lows Th ..read more

India VIX jumped just before markets closed. In doing so it broke out of a triangle like pattern on the daily chart shown here. The red arrows show the lowest readings on record that I highlighted into the August top. After that correction the VIX has been moving higher and not lower as the trend toward higher volatility probably gains momentum. There have been many false flags on this front so watch if this trend of a higher Volatility reading holds. A higher VIX is usually associated with falling prices ..read more

DOW Dow 23870 is the upside to the upper end of the channel in wave v of 5, unless the channel breaks first, so the support is at 23417 DOLLAR INDEX The dollar index is on course towards 95.75 and 97.30 in the coming weeks in wave III up ..read more

CRUDE Crude Oil went past the 2017 high. Here I am considering the alternate scenarios developing. We are in either wave 3 or c up. the third wave will end in 5 waves and in that sense we are only in wave iii so Oil prices have way to go. One minor correction in between the next achievable level is near 62. 62 is the 2015 high and the trendline of the two tops seen since 2016. Near 62 we can consider which is the better case, but the Oil rally that has started now has a few more legs before it is done in either case. Aluminium MCX Aluminium prices closed above the 20dma taking support at 139 ..read more

CRB Index The CRB index went past the Sept high due to the recent rally in crude prices. For a while I have maintained that crude will see a dip before a rally. The dip did not last but the new highs are now causing metals to resume the rally. The question on the back of the mind is whether the larger wave C/3 rally has started already?. Crude did not look impulsive in the initial phase of the move up but was making higher tops and bottoms. So that takes me to the CRB index that has a different look. This index has 2 clear 5 wave rallies that I interpreted as a-b-c and was expecting a dip but ..read more