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With US Dollar Index #DXY seems to be bottoming and US 10 Year Yield #US10Y seems to be topping, the Macros appear to be in place to disrupt the Equities.
However, I must make certain things very clear.
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However, I must make certain things very clear.
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One, the Inter Market Movement is not exactly point-to-point. That is, if DXY & US10Y turn on a particular day, it doesn't mean that Equities also turn on the same day itself. The past experience shows that there can be a lag or sometimes a substantial lag of up to 1-2 Months.
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In 2020 only, US10Y topped out on 31st December 2019, where as Equities made the turn only after 20th Feb 2020.
Secondly, there can be a further lag between the US Equities and the Emerging Market or India in particular.
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Secondly, there can be a further lag between the US Equities and the Emerging Market or India in particular.
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Case in point: 2007, when Dow Jones topped out in October 2007, whereas India peaked only in January 2008. So, we can't have any automatic presumption regarding Equities right away.
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However, we can say that topping process would be deemed as begun if and when we have both DXY and US10Y confirming the termination of their waves by breaking the dashed lines on charts.
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Lastly, the magnitude of any correction would depend on the structure of that Index itself. Just because a 2007-08 or 2020 has been quoted as examples doesn't automatically construe the expectation of extent of turn.
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As and when there is clarity on NIFTY charts, I will post it separately.
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