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.

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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...

Monday, 20 May 2019

Chinese Yuan Warning Major Correction Ahead?

The Chinese Yuan is well correlated to risk assets. A sudden depreciation in the Yuan has often lead to major sell offs in risk assets. With the Yuan depreciating appreciably in the last few weeks a major sell off in risk assets maybe just around the corner:

Yuan
spx


Sunday, 19 May 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 20

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2860, -0.76%
Bearish
Bearish
Nifty
11407, 1.14%
Neutral **
Bullish
China Shanghai Index
2882, -1.94%
Bearish
Bearish
Gold
1277, -0.82%
Bearish
Bearish
WTIC Crude
62.92, 2.04%
Bullish
Bullish
Copper
2.73, -0.87%
Bearish
Bearish
Baltic Dry Index
1040, 2.67%
Bullish
Bullish
Euro
1.1160, -0.68%
Bearish
Bearish
Dollar/Yen
110.08, 0.40%
Neutral
Neutral
Dow Transports
10492, -1.04%
Bearish
Bearish
High Yield (ETF)
107.40, -0.32%
Neutral
Neutral
US 10 year Bond Yield
2.39%, -1.73%
Bullish
Bullish
Nyse Summation Index
591, -18.73%
Bearish
Neutral
US Vix
15.96, -0.50%
Bullish
Bullish
Skew
119
Neutral
Neutral
20 DMA, S and P 500
2900, Below
Bearish
Neutral
50 DMA, S and P 500
2869, Below
Bearish
Neutral
200 DMA, S and P 500
2777, Above
Bullish
Neutral
20 DMA, Nifty
11512, Below
Neutral
Bearish
50 DMA, Nifty
11467, Below
Neutral
Bearish
200 DMA, Nifty
11040, Above
Neutral
Bullish
India Vix
28.08, 6.61%
Neutral
Bearish
Dollar/Rupee
70.35, 0.59%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
5
6
Bearish Indications
9
10
Outlook
Bearish
Bearish
Observation
The S and P 500 was down and the Nifty were up 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
Japan – GDP, Euro Zone – German GDP, UK – CPI, India – Election results
*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 may 20


The S and P 500 fell and the Nifty was up 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 are very close to another top in global equity markets. The market has rallied 600 points from the December lows but a 5 year bear market is in the making with a secondary top in place. 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 far exceeded 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. 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 2870 (up) and 2850 (down) on the S & P 500 and 11500 (up) and 11300 (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, 12 May 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 13

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2881, -2.18%
Bearish
Bearish
Nifty
11279, -3.70%
Neutral **
Bearish
China Shanghai Index
2939, -4.52%
Bearish
Bearish
Gold
1287, 0.48%
Neutral
Neutral
WTIC Crude
61.73, -0.34%
Neutral
Neutral
Copper
2.78, -1.58%
Bearish
Bearish
Baltic Dry Index
1013, 2.84%
Bullish
Bullish
Euro
1.1235, 0.29%
Neutral
Neutral
Dollar/Yen
109.97, -1.04%
Bearish
Bearish
Dow Transports
10602, -3.25%
Bearish
Bearish
High Yield (ETF)
107.75, -0.48%
Neutral
Neutral
US 10 year Bond Yield
2.47%, -2.27%
Bullish
Bullish
Nyse Summation Index
727, -20.86%
Bearish
Neutral
US Vix
16.04, 24.63%
Bearish
Bearish
Skew
119
Neutral
Neutral
20 DMA, S and P 500
2914, Below
Bearish
Neutral
50 DMA, S and P 500
2862, Above
Bullish
Neutral
200 DMA, S and P 500
2776, Above
Bullish
Neutral
20 DMA, Nifty
11612, Below
Neutral
Bearish
50 DMA, Nifty
11425, Below
Neutral
Bearish
200 DMA, Nifty
11034, Above
Neutral
Bullish
India Vix
26.34, 9.58%
Neutral
Bearish
Dollar/Rupee
69.93, 1.09%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
4
3
Bearish Indications
8
11
Outlook
Bearish
Bearish
Observation
The S and P 500 and the Nifty were down 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
Euro Zone – German GDP, CPI, UK – Employment data
*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 may 13


The S and P 500 and the Nifty fell hard 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 are very close to another top in global equity markets. The market has rallied 600 points from the December lows 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 far exceeded 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. 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 2895 (up) and 2870 (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.



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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.