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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, 22 September 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 23

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2992, -0.51%
Bearish
Bearish
Nifty
11274, 1.79%
Neutral **
Bullish
China Shanghai Index
3007, -0.82%
Bearish
Bearish
Gold
1524, 1.64%
Bullish
Bullish
WTIC Crude
58.41, 6.49%
Bullish
Bullish
Copper
2.59, -4.04%
Bearish
Bearish
Baltic Dry Index
2131, -7.83%
Bearish
Bearish
Euro
1.1017, -0.52%
Bearish
Bearish
Dollar/Yen
107.57, -0.48%
Neutral
Neutral
Dow Transports
10454, -3.32%
Bearish
Bearish
High Yield (Bond)
109.12, 0.33%
Neutral
Neutral
US 10 year Bond Yield
1.72%, -9.42%
Bullish
Bullish
Nyse Summation Index
782, 12.40%
Bullish
Neutral
US Vix
15.32, 11.50%
Bearish
Bearish
Skew
118
Neutral
Neutral
20 DMA, S and P 500
2956, Above
Bullish
Neutral
50 DMA, S and P 500
2951, Above
Bullish
Neutral
200 DMA, S and P 500
2825, Above
Bullish
Neutral
20 DMA, Nifty
10946, Above
Neutral
Bullish
50 DMA, Nifty
11115, Above
Neutral
Bullish
200 DMA, Nifty
11230, Above
Neutral
Bullish
India Vix
15.40, 9.07%
Neutral
Bearish
Dollar/Rupee
71.08, 0.13%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
7
7
Bearish Indications
7
8
Outlook
Neutral
Bearish
Observation
The S and P 500 fell and the Nifty rallied 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 – 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 september 23


The S and P 500 fell and the Nifty rallied last week. Indicators are mixed 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. I don’t buy into the reflation trade for a minute. 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 3005 (up) and 2980 (down) on the S & P 500 and 11350 (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, 15 September 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 16

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
3007, 0.96%
Bullish
Bullish
Nifty
11076, 1.18%
Neutral **
Bullish
China Shanghai Index
3031, 1.05%
Bullish
Bullish
Gold
1496, -1.29%
Bearish
Bearish
WTIC Crude
54.80, -3.04%
Bearish
Bearish
Copper
2.70, 2.66%
Bullish
Bullish
Baltic Dry Index
2312, -6.09%
Bearish
Bearish
Euro
1.1075, 0.42%
Neutral
Neutral
Dollar/Yen
108.09, 1.08%
Bullish
Bullish
Dow Transports
10814, 4.96%
Bullish
Bullish
High Yield (Bond)
108.75, -0.07%
Neutral
Neutral
US 10 year Bond Yield
1.90%, 21.84%
Bearish
Bearish
Nyse Summation Index
696, 52.43%
Bullish
Neutral
US Vix
13.74, -8.40%
Bullish
Bullish
Skew
118
Neutral
Neutral
20 DMA, S and P 500
2933, Above
Bullish
Neutral
50 DMA, S and P 500
2950, Above
Bullish
Neutral
200 DMA, S and P 500
2819, Above
Bullish
Neutral
20 DMA, Nifty
10968, Above
Neutral
Bullish
50 DMA, Nifty
11205, Below
Neutral
Bearish
200 DMA, Nifty
11223, Below
Neutral
Bearish
India Vix
14.12, -13.24%
Neutral
Bullish
Dollar/Rupee
70.99, -0.92%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
10
10
Bearish Indications
4
6
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 – FOMC rate decision, UK - CPI, BOE rate decision, Eurozone – CPI, Japan - BOJ rate decision
*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 september 16


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. I don’t buy into the reflation trade for a minute. 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 3020 (up) and 2995 (down) on the S & P 500 and 11150 (up) and 11000 (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.