Pharma Index Technical Analysis

Pharma Index

The Healthcare index that captures the Pharma sector gave up in the last two days. The rise is a-b-c, a 3 wave pattern, and overall an X wave in a larger decline for the sector. Wave Z down should mostly start, that should see a new low again at the lower end of the 2 year falling channel near 12500.

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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

German 10 Years, US 30 Years & US 10 Years T Notes Technical Analysis

German 10 Years Yields

The trend towards German 10 year yields is going to be global. In other words higher interest rates is not a trend situated in the US alone, it is spreading and will hit our shores no matter what. Here No matter what means even if RBI lowers interest rates next week bonds will eventually sell off and signal higher rates. The RBI cannot change this unless it intervenes in the bond market with OMOs. Or the government with a new Demo like scheme to fund the banks bond buying. Remember banks have used up more than their SLR ratios anyway.

US 30 Years Treasury Bonds

US 30 year bonds closed down for the day ending a 3 wave advance from the July bottom. This should mostly mean that wave II up is over and wave III down starts next which should see bond prices fall much further below the wave I low. This ahead of the FED could mean that any rate pause is discounted in the prices.

US 10 Years T Notes

The 10 year note yields moved higher yesterday and the yield chart appears more clear that wave 3 up may have started. The chart of the notes itself does not show this as clearly. The yields have broken out of the downtrend and made a higher bottom. Once the recent top is surpassed we should see a meaningful rally on yields.

 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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

Mid Cap Weekly Technical Analysis

The weekly chart of the Midcap indices is important. Midcap indices are relatively weaker to nifty since May. So in the recent rally they have only gone back to test the weekly upper Bollinger band and that worked as a resistance today. The daily and weekly momentum below are in sell mode. The weekly momentum has a clear negative divergence with price. I would expect the Midcap indices to fall to at least the 40wema [green line] to start with [8% down].

Currencies Technical Analysis

EUR INR

The EURINR would also complete 5 wave rise from the April low if the Euro ends a third wave rally att this level. A 38.2% retracement to 72.50 is normal

USD GBP

USDGBP – has been correcting slowly for long, as long as I have maintained that wave 5 up is next and should develop. The change is from the yellow smaller triangle I considered earlier to the larger blue falling triangle in wave 4 that maybe completing. The USDGBP should be bottoming near or above 0.758. Breakout from the triangle is above 0.782. And wave 5 has a longer term target near the upper channel and 5=1 at 0.90

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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

Commodity Technical Analysis

GOLD

With gold near 1264.70, 66% retracement the rise is 7 legs. Now it is possible to consider that wave iii up started based on yesterdays discussion however with the dollar still due for a near term rally from oversold conditions consider that till 1264 is not surpassed we may see one last dip lower in Gold prices. Above 1264 we go to 1287 at the trendline of the tops from the 2016 high.

CORN CBT

Corn prices bottomed at the 66% mark and are quitely moving higher. Holding this level at 1780 long term we should be in the early stages of a new move higher. A new bull trend rather than a X wave is what I would think but far from over.

Copper

Copper prices to develop wave iv correction. RSI at 78 it is quite overbought. Forming a doji yesterday. Wave iv can be a 38.2% retracement back to 2.80$. It maybe a swift correction or possibly a more prolonged time wise pattern like a triangle.

Gaur Gum

Guar Gum – is in the early stages of a larger up move. So it seems after the recent price action. In my last post I thought the rally was a 4th wave and it went past the 2015 low overlapping it. So that option is out. The only best option is that a A-B-C bear market ended in 2016. The recent correction in prices is to the lower end of a rising channel and that support has held so far near 6578. The rising channel marks the early stages of a larger rise if it holds and means prices would go beyond the 8671 high to test the upper end of the channel at 9490. Breakout above the rising channel at 9490 would go to the next major swing high at 12900.

Silver

Silver – reached the upper Bollinger band at 16.82 and sold off. Staying below this level prices may start another decline back to 16.15 and then 15.50 and then 15

Turmeric

Turmeric completed an impulsive rally in wave i, after a dip in wave ii we should see wave iii. 7556 the recent high once crossed we go to iii=i, which can be between 9100-9800

Copper MCX

No body gets the commodity rally just like nobody got the dollar bear market so I take credit for both forecasts. Global copper prices hit a 52 week high in wave 3. So MCX prices also should be o that path. A minor wave iv correction may get followed by wave v up. larger degree 3=1 is at 475 so we have a long way to go.

Aluminium MCX

Aluminium prices formed a triangle and broke out on the upside. Wave wise minor wave iii started. Breakout of a falling channel is above 125. Support from averages near 122. iii=i points to 127.80. And the channel breakout target based on the size of the channel goes to 132.

Zinc MCX

Zinc prices ticked up yesterday, daily momentum indicators are still to confirm, but a 3 wave correction to the lower band is complete, so wave iii up mostly started. The overhead trendline from the previous top is at 188.8 as the first resistance followed by iii=i near 209. That is the easy part. The one hard to digest is that wave 3=1 at larger degree now points to 330. Wave 1 ended at 204.20, and a move above that would have the potential to go to as far as 330.

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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

Trade Finance News Updates & Trends Around The World

Do more to boost Islamic trade finance

AS the World Trade Organisation (WTO) reaffirmed commitment to its Aid for Trade initiative at its 2017 Global Review in Geneva this month, the outlook for global trade over the next two years is indeed mixed.

WTO is forecasting that global trade will expand by 2.4 per cent this year and between 2.1 to four per cent next year, reflecting the continued uncertainty and risks associated with a stuttering global economy underpinned by low commodity prices, albeit slightly improving this year, which in turn has had a dampening effect on trade finance.

Trade and SMEs (small- and medium-sized enterprises) are regarded as the backbone of any self-respecting economy. Trade is a significant determinant and function of sustainable development. Not surprisingly, the theme of WTO’s Geneva gathering was “Promoting Trade, Inclusiveness and Connectivity for Sustainable Development”.

Source: https://www.nst.com.my/opinion/columnists/2017/07/261175/do-more-boost-islamic-trade-finance

A GAP IN GLOBAL TRADE FINANCE OF AROUND $1.6 TRILLION PER YEAR

Latest survey results and analyses by the Asian Development Bank (ADB) point to a gap in global trade finance of around US$1.6 trillion annually—much of it in developing markets, particularly in Asian developing countries. The concern is that, according to “2017 Rethinking Trade & Finance”, the latest report of the International Chamber of Commerce (ICC): “It is increasingly clear that banks will be unable to materially close this gap in Trade Financing, and that there is a misalignment in the availability of funds and liquidity”.

With worldwide trade developing at a fast speed, trade finance is the “oil in the engine” of international commerce, and tool number one for treasury managers. The banking sector has recovered from the last financial crisis, and liquidity seems to no longer be an issue. 

Source: https://corporatefinance.co/finance/gap-global-trade-finance-around-1-6-trillion-per-year/

Banking Commission Survey confirms trade finance supply/demand imbalance

The International Chamber of Commerce (ICC) Banking Commission has released its 2017 report entitled Rethinking Trade and Finance. Based on the Global Survey on Trade Finance – with 255 responses from banks located in 98 countries, as well as insight and commentary from expert contributors – the report is the most comprehensive gauge of the trends and outlook of the global trade finance industry.

Now in its ninth year – 2017’s Survey marks a significant change in both emphasis and presentation. The aim is to provide both enhanced context – highlighting the potential strategic and tactical implications for the industry – and to be more forward looking. The approach is aided by the launch of a new Editorial Board comprising senior specialists and practitioners, supported through contributions from a wider range of partners across global trade.

The Report – emphasising ICC’s and the Banking Commission’s support of open, rules-based and inclusive multilateral trade – encompasses four major sections of content linked to the pillars of the Banking Commission’s strategy. It focuses on the state of the trade finance market; trade and supply chain finance; policy, advocacy and inclusiveness around global trade; and digitalisation and the state of FinTech. The 2017 Survey’s findings show that:

  • Some 61% of banks report more demand than supply for trade finance in the global market. ICC Banking Commission and the Asian Development Bank estimate the level of unmet demand for trade finance stands at over US$1.6 trillion a year – a figure now officially recognised by the United Nations General Assembly.
  • Only a minority (21%) see traditional trade finance showing growth in the future. However, overall trade finance revenues have increased, with ICC partner The Boston Consulting Group’s trade finance model (included in the report) predicting revenue growth of around 4.7% a year.
  • Over 68% of respondents point to compliance and regulatory requirements as having the highest adverse impact on trade finance in the short-term, while only 11% pointed to capital constraints as a matter of significant concern.
  • Some 50% expect most of trade flow processes to be digitised by 2027 – while an almost equal portion expect the evolution to take from 10-25 years. In addition, nearly 44% of respondents identify digitalisation and technology as priority areas of focus – including FinTech and fast-emerging platforms.
  • While there is optimism with respect to the digitalisation of trade finance, only 12% of respondents perceive a degree of market uptake and nearly 40% see limited progress in this area – with almost 18% reporting that technical capabilities and technology are ahead of trade finance business practice.
  • The discourse around FinTechs is evolving from competition to collaboration, with only 1.4% of respondents viewing the competitive offering of FinTechs as a threat to banks’ positions as the key providers of trade finance.
  • More than one-third of respondents consider supply chain finance a high priority and predict significant growth, and over 21% view it as under analysis and consideration.
  • Over 57% report an improvement of their operational risk management and reduced error rates, while only 2.7% note a slight deterioration.
  • Some 46% identify multinational and large corporates as the highest priority client segment for their trade finance business, with a quarter favouring middle market clients and less than 20% identifying Micro, Small and Medium Enterprises (MSMEs).
  • Some 57% of respondents believe traditional trade finance will exhibit little or no growth – while 22% think it will decline outright year-on-year.
  • Cost control pressures are considered the biggest challenge facing trade finance units. These are cited by 23% of respondents, followed closely by the availability of specialist skills (21%), and limits posed by traditional technologies (18%).
  • The report highlights the key role that correspondent banks play in global trade and economic activity, with IMF data indicating that the volume of correspondent banking relationships grew by almost 30% between 2011 and 2015.

Source: https://iccwbo.org/media-wall/news-speeches/banking-commission-survey-confirms-trade-finance-supplydemand-imbalance/

Commerzbank steps up focus on trade finance transformation

Commerzbank is to work with the Fraunhofer-Institute for Material Flow and Logistics (IML) in Dortmund to test and develop new scenarios for digitisation of trade and supply chain finance using distributed ledgers and the Internet of Things.

Commerzbank says new concepts in digital trade finance based around distributed ledger technology, IoT and smart contracts constitute the basis for new trade ecosystems, new supply chain finance concepts, faster transaction processing and new solutions in working capital management.

Bernd Laber, group executive trade finance & cash management corporate clients, Commerzbank, comments: “We are working on several projects and in a number of consortiums also with other international banks on the digitisation of bank products and bank services, and on applications for blockchain technologies. As a corporate bank the focus on future supply chains of our customers is of paramount importance and we will develop this in co-operation with Fraunhofer Institute.“

Source: https://www.finextra.com/newsarticle/30785/commerzbank-steps-up-focus-on-trade-finance-transformation

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Above news update and trends are sourced from internet and are purely meant for reading on the related subject and for information. Adam Smith Associate is not responsible for any of the content and nor it is meant for any commercial benefits

Relative Rupee

In case you did not notice the INR pair, the USDINR, has note exactly been falling like the rest of the worlds currency pairs. The relative rupee is the RS of the USDINR with the DXY or dollar index. This is rising since April. Meaning that on a relative basis holding steady the INR is actually weaker than the dollar. We in effect have a currency devaluation quietly

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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

Euro And US 10 Years T Notes Technical Analysis

Euro

The Euro bull run continued even as bearish sentiment is in single digits. This excessive near term bullish traders reading continues to mean that a 5 wave rise is closer to completion. For the rally to continue unabated a pause or consolidation is needed. That said the big picture remains bullish as everyone has the narrative wrong.

US 10 Years T Notes

The 10 year note has retraced almost 50% and wave c=a is nearly done. wave ii should be near completion and wave iii down is to unfold next soon.

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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

 

Commodities Technical Analysis

GOLD

Gold has its neckline of the lows [blue line], at 1238. So that is a key resistance level. Daily momentum did turn positive and prices broke out of the falling channel but some more signs are needed that the trend has changed to up for good.

Aluminium MCX
Aluminium rallied in 5 waves and retraced 61.8% at 121.70. Dipped to a low of 120.90. So these supports should help propel it into wave iii up iii=i points to 127.50

CRUDE MCX

Crude Mcx – is in wave c up. c=a goes up to 3200 however with wave c subdividing we can see it extend to higher rations. The x wave high near 3383, is 61.8% of the entire decline for the year. 50% is at 3257. Both are open levels that can be achieved in wave c

Silver MCX

Prices are edging higher with the 40dema at 38238 as the next resistance. I still think we can make one last dip in wave z that can test the lower channel line near 35000 a last time before a larger up trend can start. A move above 38238 however might mean that we have already bottomed out.

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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

 

 

Technical Analysis of CRB Index, DOW, NASDAQ, BSE 200 And DAX

CRB Index
The CRB Index of commodities is now tracking higher with Oil and base metals. Only the PMs are lagging behind. While it is possible to imagine that Crude is still in wave B as a triangle, the CRB index that mostly reflects energy looks like it maybe done. The recent bottom involved a 66% retracement in price [blue line] and a weekly RSI of 29. Wave C up should not only carry to the wave A high but go past the grey trendline that marks the 2009 lows to rule out the case for new lows first in the index and oil as some are anticipating. My markings can change to 1-2-3 but even conservatively we should go in wave C to the upper end of the channel near 215 [current 178]

BSE 200

Is it possible to count the rise from 2009 as 5 waves? I usually take 2008-2013 as a triangle. But if I go by all the impulse wave markings of the street for each rally since 2009 it can be done as 9 legs are complete. In 2015 when I called the market top I used the Arithmetic scale chart of the BSE 200 or broader indices to project that the upper end of the channel was reached and we may go to the lower end. After 12 months down a move up started that after 2 years and adding 4 more waves [yellow extention] has brought us back to the upper end of the channel on the arithmetic scale. So it is a key resistance zone as much as given the number of waves completing the blow markings show we have 5+4=9 waves that can be marked as complete 5 waves with a 3rd wave extended for the long term 5th wave [circle]. Let us see what unfolds here.

NASDAQ 100

The Nasdaq 100, a year back among the many alternates I considered was a triangle for 2015-2016. Going back to that it changes the outlook for the Nasdaq near term. Wave 5 up would have only started. The upper trendline of the highs goes to 6080-6100.

DOW

Dow – wave 5 is extending, we are now in wave v of 5 and that is also subdividing. 21340 is the lower trendline and till it does not break we can go to 21800.

DAX – leading the way for Europe

Unlike US stocks that are stretching out in wave 5 higher, the European indices have 5 wave declines. It shows up very clearly in the German DAX. It recently bounced back in 3 waves to almost 61.8%. Yesterday it fell below the b wave low confirming that the bounce was corrective and maybe wave 3 down to  12060

 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and 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