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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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Definition of a Recession: The textbook definition of a recession is two quarters of negative GDP growth. Some examples of recessions in...

Sunday, 13 October 2019

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

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2970, 0.62%
Bullish
Bullish
Nifty
11305, 1.17%
Neutral **
Bullish
China Shanghai Index
2974, 2.36%
Bullish
Bullish
Gold
1493, -1.29%
Bearish
Bearish
WTIC Crude
54.88, 3.92%
Bullish
Bullish
Copper
2.62, 2.38%
Bullish
Bullish
Baltic Dry Index
1924, 8.89%
Bullish
Bullish
Euro
1.1037, 0.54%
Bullish
Bullish
Dollar/Yen
108.42, 1.38%
Bullish
Bullish
Dow Transports
10292, 2.61%
Bullish
Bullish
High Yield (Bond)
108.08, 0.36%
Neutral
Neutral
US 10 year Bond Yield
1.73%, 14.43%
Bearish
Bearish
Nyse Summation Index
435, -21.76%
Bearish
Neutral
US Vix
15.58, -8.57%
Bullish
Bullish
Skew
122
Neutral
Neutral
20 DMA, S and P 500
2961, Above
Bullish
Neutral
50 DMA, S and P 500
2936, Above
Bullish
Neutral
200 DMA, S and P 500
2854, Above
Bullish
Neutral
20 DMA, Nifty
11236, Above
Neutral
Bullish
50 DMA, Nifty
11088, Above
Neutral
Bullish
200 DMA, Nifty
11271, Above
Neutral
Bullish
India Vix
17.14, -2.50%
Neutral
Bullish
Dollar/Rupee
70.92, 0.14%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
12
14
Bearish Indications
3
2
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
Eurozone – CPI, UK – Employment data, CPI, China - GDP
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Stock charts, investing.com
**Neutral
Changes less than 0.5% are considered neutral


stock market signals october 14


The S and P 500 and the Nifty rallied last week. Indicators are bullish for the upcoming week. QE forever from the FED is about to trigger the deflationary collapse of the century and we have likely made another major top in global equity markets and are failing at resistance. The market has established a major top with non-conformations from the transports, other global indices and commodities and a massive drop in the S and P 500 looks imminent. The trend is about to change from bullish to bearish and the markets are about to get smashed by a strong dollar. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. 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. 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 as the yield curve inverts. The critical levels to watch for the week are 2980 (up) and 2960 (down) on the S & P 500 and 11400 (up) and 11200 (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 October 2019

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

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2952, -0.33%
Neutral
Neutral
Nifty
11175, -2.93%
Neutral **
Bearish
China Shanghai Index
2905, -0.92%
Bearish
Bearish
Gold
1510, 0.26%
Neutral
Neutral
WTIC Crude
52.98, -5.24%
Bearish
Bearish
Copper
2.56, -1.31%
Bearish
Bearish
Baltic Dry Index
1809, -7.85%
Bearish
Bearish
Euro
1.0978, 0.36%
Neutral
Neutral
Dollar/Yen
106.95, -0.93%
Bearish
Bearish
Dow Transports
10030, -3.01%
Bearish
Bearish
High Yield (Bond)
107.69, -0.91%
Bearish
Bearish
US 10 year Bond Yield
1.53%, -9.18%
Bullish
Bullish
Nyse Summation Index
556, -24.32%
Bearish
Neutral
US Vix
17.04, -1.05%
Bullish
Bullish
Skew
115
Neutral
Neutral
20 DMA, S and P 500
2977, Below
Bearish
Neutral
50 DMA, S and P 500
2942, Above
Bullish
Neutral
200 DMA, S and P 500
2841, Above
Bullish
Neutral
20 DMA, Nifty
11178, Below
Neutral
Bearish
50 DMA, Nifty
11092, Above
Neutral
Bullish
200 DMA, Nifty
11262, Below
Neutral
Bearish
India Vix
17.58, 9.09%
Neutral
Bearish
Dollar/Rupee
70.83, 0.45%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
4
3
Bearish Indications
9
11
Outlook
Bearish
Bearish
Observation
The S and P 500 and the Nifty fell last week. Indicators are bearish for the week.
The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon
US – PPI, CPI, UK – GDP
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Stock charts, investing.com
**Neutral
Changes less than 0.5% are considered neutral


stock market signals october 07


The S and P 500 and the Nifty fell last week. Indicators are bearish for the upcoming week. QE forever from the FED is about to trigger the deflationary collapse of the century and we have likely made another major top in global equity markets and are failing at resistance. The market has established a major top with non-conformations from the transports, other global indices and commodities and a massive drop in the S and P 500 looks imminent. The trend is about to change from bullish to bearish and the markets are about to get smashed by a strong dollar. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. 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. 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 as the yield curve inverts. The critical levels to watch for the week are 2965 (up) and 2940 (down) on the S & P 500 and 11250 (up) and 11100 (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.