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Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed. Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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Sunday, 13 January 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning January 14

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2596, 2.54%
Bullish
Bullish
Nifty
10795, 0.67%
Neutral **
Bullish
China Shanghai Index
2554, 1.55%
Bullish
Bullish
Gold
1290, 0.29%
Neutral
Neutral
WTIC Crude
51.59, 7.57%
Bullish
Bullish
Copper
2.66, 0.55%
Bullish
Bullish
Baltic Dry Index
1169, -7.22%
Bearish
Bearish
Euro
1.1465, 0.85%
Bullish
Bullish
Dollar/Yen
108.51, 0.04%
Neutral
Neutral
Dow Transports
9625, 4.34%
Bullish
Bullish
High Yield (ETF)
34.83, 2.11%
Bullish
Bullish
US 10 year Bond Yield
2.70%, 1.58%
Bearish
Bearish
Nyse Summation Index
-372, 59.60%
Bullish
Neutral
US Vix
18.19, -14.92%
Bullish
Bullish
Skew
119
Neutral
Neutral
20 DMA, S and P 500
2521, Above
Bullish
Neutral
50 DMA, S and P 500
2635, Below
Bearish
Neutral
200 DMA, S and P 500
2741, Below
Bearish
Neutral
20 DMA, Nifty
10816, Below
Neutral
Bearish
50 DMA, Nifty
10711, Above
Neutral
Bullish
200 DMA, Nifty
10793, Above
Neutral
Bullish
India Vix
15.35, -5.01%
Neutral
Bullish
Dollar/Rupee
70.36, 1.21%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
10
12
Bearish Indications
4
4
Outlook
Bullish
Bullish
Observation
The S and P 500 and the Nifty rallied last week. Indicators are bullish for the week.
The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon
US – PPI, UK – Brexit deal parliamentary vote, CPI, Canada – CPI, Euro Zone – CPI, China - GDP
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Google finance, Stock charts, investing.com
**Neutral
Changes less than 0.5% are considered neutral


stock market signals january 14


The S and P 500 and the Nifty rallied last week. Indicators are bullish for the upcoming week. The market got its oversold bounce of about a 250 points but a 5 year bear market is in the making. The trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. The India vix is below the US vix suggesting there may be a sudden catch up on the downside for the Indian market in 2019. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. We are on the verge of a multi-year great depression. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Tail risk has been very high off late. The critical levels to watch for the week are 2610 (up) and 2585 (down) on the S & P 500 and 10900 (up) and 10700 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets. You can check out last week’s report for a comparison. Love your thoughts and feedback.


Sunday, 6 January 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning January 07

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2532, 1.86%
Bullish
Bullish
Nifty
10727, -1.22%
Neutral **
Bearish
China Shanghai Index
2515, 0.84%
Bullish
Bullish
Gold
1286, 0.22%
Neutral
Neutral
WTIC Crude
47.96, 5.80%
Bullish
Bullish
Copper
2.65, -1.27%
Bearish
Bearish
Baltic Dry Index
1260, -0.87%
Bearish
Bearish
Euro
1.1368, -0.60%
Bearish
Bearish
Dollar/Yen
108.47, -1.58%
Bearish
Bearish
Dow Transports
9225, 1.27%
Bullish
Bullish
High Yield (ETF)
34.11, 1.70%
Bullish
Bullish
US 10 year Bond Yield
2.66%, -2.81%
Bullish
Bullish
Nyse Summation Index
-920, 15.09%
Bullish
Neutral
US Vix
21.38, -24.56%
Bullish
Bullish
Skew
111
Neutral
Neutral
20 DMA, S and P 500
2539, Below
Bearish
Neutral
50 DMA, S and P 500
2645, Below
Bearish
Neutral
200 DMA, S and P 500
2743, Below
Bearish
Neutral
20 DMA, Nifty
10777, Below
Neutral
Bearish
50 DMA, Nifty
10647, Above
Neutral
Bullish
200 DMA, Nifty
10780, Below
Neutral
Bearish
India Vix
16.16, 5.84%
Neutral
Bearish
Dollar/Rupee
69.52, -0.26%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
8
8
Bearish Indications
7
8
Outlook
Bearish
Neutral
Observation
The S and P 500 rallied and the Nifty fell last week. Indicators are mixed for the week.
The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon
US – CPI, UK – GDP, Canada – BOC rate decision
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Google finance, Stock charts, investing.com
**Neutral
Changes less than 0.5% are considered neutral


stock market signals january 07


The S and P 500 rallied and the Nifty fell last week. Indicators are mixed for the upcoming week. The market got its oversold bounce of about a 100 points but a 5 year bear market is in the making. The trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. The India vix is much below the US vix suggesting there may be a sudden catch up on the downside for the Indian market in 2019. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. We are on the verge of a multi-year great depression. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Tail risk has been very high off late. The critical levels to watch for the week are 2540 (up) and 2520 (down) on the S & P 500 and 10800 (up) and 10600 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets. You can check out last week’s report for a comparison. Love your thoughts and feedback and a happy new year.


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My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.