About

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, 13 December 2015

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

Indicator
Weekly Level / Change / Significance
Implication for
S & P 500
Implication for Nifty*
S & P 500
2012, -3.79%
Bearish
Bearish
Nifty
7611, -2.20%
Neutral**
Bearish
China Shanghai Index
3435, -2.56%
Bearish
Bearish
Gold
1074, -1.11%
Bearish
Bearish
WTIC Crude
35.36, -11.91%
Bearish
Bearish
Copper
2.11, 1.81%
Bullish
Bullish
Baltic Dry Index
522, -7.28%
Bearish
Bearish
Euro
1.0995, 0.88%
Bullish
Bullish
Dollar/Yen
120.96, -1.76%
Bearish
Bearish
Dow Transports
7525, -5.41%
Bearish
Bearish
US 10 year Bond Yield
2.14%, -5.98%
Bullish
Bullish
Nyse Summation Index
-35, -113.64%
Bearish
Bearish
Junk Bonds (ETF)
33.69, -3.96%
Bearish
Bearish
US Vix
24.39, 64.69%
Bearish
Bearish
20 DMA, S and P 500
2070, Below
Bearish
Neutral
50 DMA, S and P 500
2056, Below
Bearish
Neutral
200 DMA, S and P 500
2063, Below
Bearish
Neutral
20 DMA, Nifty
7809, Below
Neutral
Bearish
50 DMA, Nifty
7980, Below
Neutral
Bearish
200 DMA, Nifty
8260, Below
Neutral
Bearish
India Vix
17.18, 6.82%
Neutral
Bearish
Dollar/Rupee
67.15, 0.76%
Neutral
Bearish




Overall
S & P 500
Nifty

Bullish Indications
3
3

Bearish Indications
13
16

Outlook
Bearish
Bearish

Observation
The Sand P 500 and the Nifty were down big last week. Indicators are bearish. Markets are oversold and may have a short term bounce but the trend is clearly down. Transports and the high yield market are flashing warning signs.


On the Horizon
Canada – CPI, New Zealand – GDP, China –Loan data, Japan – Tankan data, Euro Zone – ZEW sentiment survey, U.K – CPI, US – FOMC rate decision, CPI.






*Nifty
India’s Benchmark Stock Market Index


Raw Data
Courtesy Google finance, Stock charts, FXCM


**Neutral
Changes less than 0.5% are considered neutral




The US market and the Nifty fell hard last week. Signals are bearish for the upcoming week. The markets are oversold and are likely to continue to correct after an oversold bounce, with most emerging markets, and commodities already breaking down on a strong dollar and a hawkish FED.  Transports and the high yield market are signaling trouble ahead.  The Vix is implying a crash. The critical levels to watch are 2030 (up) and 2000 (down) on the S & P and 7700 (up) and 7500 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the markets very shortly. You can check out last week’s report for a comparison. You can also check out snapshots of the S and P 500 and Nifty Indices. Love your thoughts and feedback.

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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.