[Premium] This Inter-Market Chart Suggests Weakness For Stocks

March 30, 2020

In our market view update, we outlined how we're approaching stocks after catching last week's 20% rally in the Nifty 50.

In this post, we want to share an intermarket signal that's suggesting a defensive posture remains best when approaching stocks as an asset class.

US Treasury Bonds went out at their highest weekly closing price ever on Friday. Continued strength in the US, Global, and Indian Bonds continues to support a defensive tone in the marketplace and is an important inter-market signal. If stocks are going to move higher, Interest Rates need to stabilize and we're not seeing evidence of that yet.

Click on chart to enlarge view.

As you can see from the chart above, Indian Interest Rates have NOT stabilized. Capital flows where it's treated best, and the Bond market remains in a firm uptrend while stocks struggle to prove themselves.

Between this, an underlying bid in Gold, and strong outperformance from Large-Cap stocks relative to Small-Caps, it's clear that risk appetite for Equities remains weak.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team