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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, 23 September 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 24

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2930, 0.85%
Bullish
Bullish
Nifty
11143, -3.23%
Neutral **
Bearish
China Shanghai Index
2798, 4.32%
Bullish
Bullish
Gold
1201, 0.02%
Neutral
Neutral
WTIC Crude
70.78, 2.59%
Bullish
Bullish
Copper
2.86, 7.99%
Bullish
Bullish
Baltic Dry Index
1413, 3.44%
Bullish
Bullish
Euro
1.1762, 1.19%
Bullish
Bullish
Dollar/Yen
112.54, 0.49%
Neutral
Neutral
Dow Transports
11533, -0.33%
Neutral
Neutral
High Yield (ETF)
35.98, -0.11%
Neutral
Neutral
US 10 year Bond Yield
3.07%, 2.47%
Bearish
Bearish
Nyse Summation Index
359, -15.40%
Bearish
Neutral
US Vix
11.68, -3.23%
Bullish
Bullish
Skew
142
Bearish
Bearish
20 DMA, S and P 500
2897, Above
Bullish
Neutral
50 DMA, S and P 500
2857, Above
Bullish
Neutral
200 DMA, S and P 500
2750, Above
Bullish
Neutral
20 DMA, Nifty
11499, Below
Neutral
Bearish
50 DMA, Nifty
11342, Below
Neutral
Bearish
200 DMA, Nifty
10749, Above
Neutral
Bullish
India Vix
15.53, 12.23%
Neutral
Bearish
Dollar/Rupee
72.20, 0.21%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
10
7
Bearish Indications
3
6
Outlook
Bullish
Bullish
Observation
The S and P 500 was up and the Nifty was down last week. Indicators are bullish.
The markets are likely topping out. Watch those stops.
On the Horizon
New Zealand RBNZ rate decision, Euro Zone – German employment data, CPI, UK – GDP, Canada – GDP, US – FOMC 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 september 24


The S and P 500 was up and the Nifty was significantly down last week. Indicators are bullish for the upcoming week. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. This rally is close to another major top in key asset classes which has already formed in the Euro and commodities. This is going to be followed by a massive selloff and most likely a deflationary collapse. 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 is also very high. The critical levels to watch for the week are 2940 (up) and 2920 (down) on the S & P 500 and 11250 (up) and 11050 (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.


Wednesday, 19 September 2018

Mid Week Market Insight

The US markets continue to out perform amidst glaring divergences and sky high valuations. Emerging markets continue to sell off despite recent dollar weakness. This weeks report focuses on key developments in global stock markets from some of the best asset managers, market commentators, financial analysts and CMT's of today:

Sunday, 16 September 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 17

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2905, 1.16%
Bullish
Bullish
Nifty
11515, -0.64%
Neutral **
Bearish
China Shanghai Index
2862, -0.76%
Bearish
Bearish
Gold
1201, 0.06%
Neutral
Neutral
WTIC Crude
68.99, 1.83%
Bullish
Bullish
Copper
2.65, 0.90%
Bullish
Bullish
Baltic Dry Index
1366, -8.32%
Bearish
Bearish
Euro
1.1624, 0.46%
Neutral
Neutral
Dollar/Yen
111.99, 0.93%
Bullish
Bullish
Dow Transports
11571, 1.97%
Bullish
Bullish
High Yield (ETF)
36.02, 0.73%
Bullish
Bullish
US 10 year Bond Yield
2.99%, 1.77%
Bearish
Bearish
Nyse Summation Index
425, -19.20%
Bearish
Neutral
US Vix
12.07, -18.88%
Bullish
Bullish
Skew
152
Bearish
Bearish
20 DMA, S and P 500
2884, Above
Bullish
Neutral
50 DMA, S and P 500
2844, Above
Bullish
Neutral
200 DMA, S and P 500
2744, Above
Bullish
Neutral
20 DMA, Nifty
11546, Below
Neutral
Bearish
50 DMA, Nifty
11305, Above
Neutral
Bullish
200 DMA, Nifty
10730, Above
Neutral
Bullish
India Vix
13.84, -0.34%
Neutral
Neutral
Dollar/Rupee
72.05, 0.01%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
10
9
Bearish Indications
6
6
Outlook
Bullish
Bullish
Observation
The S and P 500 was up and the Nifty was down last week. Indicators are bullish.
The markets are confirming secondary tops. Watch those stops.
On the Horizon
Japan – BOJ rate decision, New Zealand GDP, Euro Zone – CPI, UK – CPI, Canada – CPI, Switzerland – SNB 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 september 17


The S and P 500 was up and the Nifty was down last week. Indicators are bullish for the upcoming week. This rally is close to a major secondary top in key asset classes which has already formed in the Euro and commodities. This is going to be followed by a massive selloff most likely a deflationary collapse. 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 is also very high. The critical levels to watch for the week are 2915 (up) and 2895 (down) on the S & P 500 and 11600 (up) and 11400 (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.


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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.