About

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.

Featured post

Is a Recession Imminent?

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

Wednesday, 20 February 2019

Things to Worry as a Bear

There's loads of things to worry about if you are a bear such as valuations, China, US yield curve flattening, economic woes in Europe, the recent collapse in freight rates etc. Here is an apt summary of these views from the pro's:

Sunday, 17 February 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning February 18

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2776, 2.50%
Bullish
Bullish
Nifty
10724, -2.00%
Neutral **
Bearish
China Shanghai Index
2682, 2.45%
Bullish
Bullish
Gold
1322, 0.27%
Neutral
Neutral
WTIC Crude
55.98, 6.18%
Bullish
Bullish
Copper
2.80, -0.43%
Neutral
Neutral
Baltic Dry Index
639, 6.32%
Bullish
Bullish
Euro
1.1292, -0.52%
Bearish
Bearish
Dollar/Yen
110.40, 0.59%
Bullish
Bullish
Dow Transports
10568, 3.84%
Bullish
Bullish
High Yield (ETF)
35.50, 0.77%
Bullish
Bullish
US 10 year Bond Yield
2.67%, 1.29%
Bearish
Bearish
Nyse Summation Index
1085, 20.68%
Bullish
Neutral
US Vix
14.91, -5.15%
Bullish
Bullish
Skew
130
Neutral
Neutral
20 DMA, S and P 500
2698, Above
Bullish
Neutral
50 DMA, S and P 500
2616, Above
Bullish
Neutral
200 DMA, S and P 500
2745, Above
Bullish
Neutral
20 DMA, Nifty
10847, Below
Neutral
Bearish
50 DMA, Nifty
10817, Below
Neutral
Bearish
200 DMA, Nifty
10860, Below
Neutral
Bearish
India Vix
16.46, 5.73%
Neutral
Bearish
Dollar/Rupee
71.33 0.26%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
12
8
Bearish Indications
2
7
Outlook
Bullish
Bullish
Observation
The S and P 500 was up and the Nifty fell 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
UK – Employment data, 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 february 18


The S and P 500 was up and the Nifty was down last week. Indicators are bullish for the upcoming week. QE forever is about to trigger the deflationary collapse of the century. The market got its oversold bounce of about 400 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 has finally caught up to 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 2790 (up) and 2760 (down) on the S & P 500 and 10800 (up) and 10650 (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, 10 February 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning February 11

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2708, 0.05%
Neutral
Neutral
Nifty
10944, 0.46%
Neutral **
Neutral
China Shanghai Index
2618, 0.00%
Neutral
Neutral
Gold
1319, -0.27%
Neutral
Neutral
WTIC Crude
52.72, -4.60%
Bearish
Bearish
Copper
2.81, 1.35%
Bullish
Bullish
Baltic Dry Index
601, -6.82%
Bearish
Bearish
Euro
1.1350, -0.87%
Bearish
Bearish
Dollar/Yen
109.75, 0.25%
Neutral
Neutral
Dow Transports
10177, 0.52%
Bullish
Bullish
High Yield (ETF)
35.17, 0.81%
Bullish
Bullish
US 10 year Bond Yield
2.63%, -2.19%
Bullish
Bullish
Nyse Summation Index
899, 34.11%
Bullish
Neutral
US Vix
16.72, -2.60%
Bullish
Bullish
Skew
128
Neutral
Neutral
20 DMA, S and P 500
2664, Above
Bullish
Neutral
50 DMA, S and P 500
2616, Above
Bullish
Neutral
200 DMA, S and P 500
2743, Below
Bearish
Neutral
20 DMA, Nifty
10864, Above
Neutral
Bullish
50 DMA, Nifty
10818, Above
Neutral
Bullish
200 DMA, Nifty
10856, Above
Neutral
Bullish
India Vix
15.57, -0.97%
Neutral
Bullish
Dollar/Rupee
71.14 -0.44%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
8
9
Bearish Indications
4
3
Outlook
Bullish
Bullish
Observation
The S and P 500 and the Nifty were relatively unchanged 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
UK – GDP, CPI, Euro Zone – German GDP, US – CPI, Japan – 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 february 11


The S and P 500 and the Nifty were unchanged last week. Indicators are bullish for the upcoming week. QE forever is about to trigger the deflationary collapse of the century. The market got its oversold bounce of about 350 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 finally catching up to 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 2720 (up) and 2700 (down) on the S & P 500 and 11000 (up) and 10850 (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.