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Commodities Technical Analysis

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VIX Volatility Index - May 5

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The US VIX has been in the news in the last few days. So right after the India VIX made its lowest reading on record, the US VIX has dipped to a low that touches the trendline of the low in 1993 to the low in 2006. In the long term history of the VIX these low points did not mark major market tops. At the same time it maybe noted that the US VIX rises higher much before such an event. So volatility was already rising into the 2007 S&P top before it happened. 


On the other hand shorter term lows in the VIX have been associated with near term market corrections and therefore we may still pay attention to it. The recent low is also on the trendline of the lows of the last two years. So a rise in near term volatility from here when it happens would give us a near term correction is all we can say with this.





Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely…

Dollar Index and Nikkei Technical Analysis - May 15

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Dollar Index The dollar index has formed a 5 wave decline that is overlapping like a wedge. This pattern is known as a leading diagonal and occurs in wave 1/A of a trend. So this marks a near term bottom from where the entire fall can be retraced meaningfully. Typically 38.2% up to 100 but mostly to test the wave 4 high at 101.28 close to 50% of wave A. In some cases we do get 61.8% which is near 101.74. After that wave C down is very swift. So this should be the last best rally for the dollar to 101.


Nikkei The Japanese index making a new high now counts as impulsive and so it changes the markings from 2009 onwards into a 5 wave rise. We are in the 5th wave. This can have two efffects. Shorter term wave v=i can point to 20900 however the larger structure allows for a bigger move up. 5=1 is as far as 24000.




Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely o…

Aluminium and Nickel MCX Technical Analysis - May 15

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Aluminium
Aluminium - broke the neckline at 120 so the 40 week average is at 118. At the same time the pattern looks like a head and shoulders top which has pattern implications of a move down to 113.




Nickel MCX Nickel prices developed a positive divergence on the RSI, and wave v of C should be finally complete. After a larger decline in A-B-C, we can expect an X wave, up, meaning a retracement of the fall if not a fresh up trend. A move back to 630-668 maybe possible to start with retracing 38.2% of the entire fall and near the wave iv of C swing high



Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Currency Technical Analysis - May 15

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USDINR
USDINR closed last week positive mostly completing wave v down, and today a close above the 20dma at 64.39 would be a first time in 3 months, so it may mark a trend change. First resistance above 64.39 is 64.86



EURO The Euro could not hold above 1.099 so the case is first for a dip to maybe the 20dma near 1.08 or the gap area at 1.081, and then move up again



USDJPY Breaks Out USDJPY breaks out of a falling channel and the channel measurement target above 113 is up to 118. I am not concluding on the wave structure yet but the fall is 3 waves making it a corrective decline. The rise appears more impulsive right now.


USDSGD USDSGD - appears to have completed a correction near a 50% retracement and broken out on price and retracement. With the dollar rally in currency pairs gaining momentum we should see more upside here. Initial resistance is at 1.42 above that to the high at 1.454. But there is a bigger case for a 3rd wave that can drive it to 1.51 as well where 3=1.


USDMXN USDMXN - Cl…

US Dollar v/s Leading Currencies - Technical Analysis

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USDGBP It has fallen in 3 waves so far, marked a-b-c. In my last note I considered the case of a Long term top in the contract. But prior to that i was keeping it as the last man standing in my bearish dollar call. So in the short term charts I keep that open just in case. If we are in wave 4 then near the lower end of the channel with the recent oversold RSI reading, maybe we have a bottom. Wave 5 up may just show up, even if it is s double bottom. Short term we should first test the averages at 0.788 and 0.792, Once we close above both then we can test the upper end of the channel at 0.821. We may rally into the coming Brexit vote that might make for the wave 5 top then.



USDJPY It bounced back from the lower end of a falling channel. It did not complete a 5 wave decline as I was anticipating so the markings have changed from a-b-c to w-x-y showing a complex formation. Either we are going up in an x wave up to 113.50, or, if we breakout above 113.50 a new move up may have to be conside…

Dow Technical Analysis

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The Dow may not have competed 5 waves for the Nov-Apr move and it is possible we see one more new high to complete the structure. If so a move to 21600-22000 is open in the near term. 




Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Indian Agro Warning - Technical Analysis

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Based on global Agro prices for the last 2 years I have been making a  bullish case for Indian Agro and they did rally for a while, but recently there were breaking down and so it takes me to the NCDEX, Dhaanya futures index. This is a index of Agro prices that they created and the weights are shown below.


I did post this index before with the wave 4 marking on it in 2013-2014 so wave 5 up was on. What is apparent now is that maybe wave 5 ended as an ending pattern. The index has been making lower tops and bottoms from the Point E and this is dangerous. Did India Agro just end a bubble in wave 5? Then we should be very careful on the bullish case for Agro here on. Also in this ending pattern C and E are almost equal. But this happens sometimes. Till we get a clear upward trend we should be aware that something is not right here and a deeper correction across the Indian Agro commodities is going on. If this wave count proves right then we can drop 33% on this index to the wave 4 low n…

India VIX No worries at all Adam Smith Associates

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I am just Intrigued enough by the Low VIX to post this timeless poster from the ''MAD Magazine" on the India VIX, need I say more?





Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

US 10 Years T Notes - Technical Analysis

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I have written a lot about the inverse relationship of T notes and US equities and was anticipating for a while that the wave 2 rally could go on for months. Last week however bonds were down. No So far wave 2 has not even retraced 38.2% and it appears small, but EWI started to anticipate a 3rd wave down already, and it is a valid wave count. So let me discuss the reason. First on classic TA we have seen prices touch the 40 week average and sell off so till we cross that higher levels do not come right away. But if we break 125, near the 40dema, then we could be falling further. EWI's reason is that this small little bounce has seen Speculators go back to a huge long position on CFTC futures. The position for the ten year is bigger than it was at the wave 2 circle top in June 2016 last year. So that is extreme. In short traders went so quickly back from short to long that the tide may have changed. Let me add that yields are rising across Asia, including the India 10 year GSEC. S…

Silver And Gold Technical Analysis Adam Smith Associates

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Silver prices show an oversold RSI indicator as we have retraced 61.8% of wave 1 so far. However the wave structure for wave 2 down is that of an expanded flat and in that wave c of 2 down has to complete 5 waves. We are in minor wave iii and so a small wave iv bounce and one more dip are needed. 78.6% retracement at 16.30 therefore is the next major support if prices fall in wave v as expected. Only then can we call it a day here. In fact silver is the main reason that the precious metals got pulled down. At the recent high Silver CFTC longs were reported at a record long position. So with everyone long there was need for some unwinding. The longs show the strong positive mood that should come back and drive each rally higher.



While I discussed my Long term stance on Gold, as of last week I have been expecting lower prices in what is still a wave 2 of 3 correction. The next move higher did not unfold. While one reason for this for Silver getting Long in the tooth with a record long p…

Commodity Technical Analysis Adam Smith Associates

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BSE Metal The BSE Metals index remains in a downtrend. The recent bounce back is facing resistance near the averages and if we break the rising trendline of the 1 year long channel then it would confirm that we head to 9500 on the index, a deeper cut in prices. A move below 10897 could be negative.


Sugar NCDEX The reason to be careful about Sugar prices international is that often local agro prices do not move with the global ones in the near term. This is unlike the metals where they move in tandem. So local sugar prices did peak but did not fall with the global trend. But the wave counts still indicate lower prices on the NCDEX chart, so it might be better to wait and see what happens here before taking a stance on the sector.


Copper A False Break Out The recent move up in copper was again an x wave. In many base metals I did note that either an x wave or new move is on. But I did think the flag breakout on copper could mean more. That is violated now. Copper is in wave z of 2. z is th…