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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, 18 November 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning November 19

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2736, -1.61%
Bearish
Bearish
Nifty
10682, 0.92%
Neutral **
Bullish
China Shanghai Index
2679, 3.09%
Bullish
Bullish
Gold
1223, 1.19%
Bullish
Bullish
WTIC Crude
56.68, -5.83%
Bearish
Bearish
Copper
2.80, 4.25%
Bullish
Bullish
Baltic Dry Index
1031, -10.11%
Bearish
Bearish
Euro
1.1504, 1.47%
Bullish
Bullish
Dollar/Yen
112.85, -0.81%
Bearish
Bearish
Dow Transports
10584, 0.63%
Bullish
Bullish
High Yield (ETF)
34.61, -1.51%
Bearish
Bearish
US 10 year Bond Yield
3.07%, -3.61%
Bullish
Bullish
Nyse Summation Index
-412, 8.78%
Bullish
Neutral
US Vix
18.14, 4.49%
Bearish
Bearish
Skew
119
Neutral
Neutral
20 DMA, S and P 500
2726, Above
Bullish
Neutral
50 DMA, S and P 500
2813, Below
Bearish
Neutral
200 DMA, S and P 500
2761, Below
Bearish
Neutral
20 DMA, Nifty
10401, Above
Neutral
Bullish
50 DMA, Nifty
10750, Below
Neutral
Bearish
200 DMA, Nifty
10756, Below
Neutral
Bearish
India Vix
18.35, 3.29%
Neutral
Bearish
Dollar/Rupee
71.77, -1.17%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
8
9
Bearish Indications
8
9
Outlook
Neutral
Neutral
Observation
The S and P 500 was down and the Nifty was up last week. Indicators are neutral for the week.
The markets are indicating a major trend change. Watch those stops.
On the Horizon
Canada – CPI, Euro Zone – German 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 november 19


The S and P 500 was down and the Nifty was up last week. Indicators are neutral for the upcoming week. The oversold bounce in global markets has likely stalled out near the declining 200 DMA’s and the 50 week moving averages that were violated for the first time in two years will likely act as strong resistance. The trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A major top has been established in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. 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 has been very high off late. The critical levels to watch for the week are 2750 (up) and 2725 (down) on the S & P 500 and 10750 (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.


Sunday, 11 November 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning November 12

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2781, 2.13%
Bullish
Bullish
Nifty
10585, 0.31%
Neutral **
Neutral
China Shanghai Index
2599, -2.90%
Bearish
Bearish
Gold
1209, -2.00%
Bearish
Bearish
WTIC Crude
60.19, -4.67%
Bearish
Bearish
Copper
2.68, -4.36%
Bearish
Bearish
Baltic Dry Index
1147, -21.28%
Bearish
Bearish
Euro
1.1338, -0.45%
Neutral
Neutral
Dollar/Yen
113.78, 0.52%
Bullish
Bullish
Dow Transports
10517, 1.46%
Bullish
Bullish
High Yield (ETF)
35.14, 0.00%
Neutral
Neutral
US 10 year Bond Yield
3.19%, -0.78%
Bullish
Bullish
Nyse Summation Index
-451, 36.10%
Bullish
Neutral
US Vix
17.36, -11.02%
Bullish
Bullish
Skew
120
Neutral
Neutral
20 DMA, S and P 500
2741, Above
Bullish
Neutral
50 DMA, S and P 500
2829, Below
Bearish
Neutral
200 DMA, S and P 500
2763, Above
Bullish
Neutral
20 DMA, Nifty
10360, Above
Neutral
Bullish
50 DMA, Nifty
10880, Below
Neutral
Bearish
200 DMA, Nifty
10760, Below
Neutral
Bearish
India Vix
17.76, -2.55%
Neutral
Bullish
Dollar/Rupee
72.62, -0.33%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
8
7
Bearish Indications
6
7
Outlook
Bullish
Neutral
Observation
The S and P 500 and the Nifty were up last week. Indicators are mixed for the week.
The markets are indicating a major trend change. Watch those stops.
On the Horizon
Australia – Employment data, Japan – GDP, US CPI, UK – Employment data, CPI, Euro Zone – German GDP, CPI
*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 november 12


The S and P 500 and the Nifty were up last week. Indicators are mixed for the upcoming week. The oversold bounce in global markets has likely stalled out near the declining 200 DMA’s and the trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A major top has been established in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. 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 has been very high off late. The critical levels to watch for the week are 2790 (up) and 2770 (down) on the S & P 500 and 10700 (up) and 10500 (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.