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, 20 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 21

Indicator
Weekly Level / Change / Significance
Implication for
S & P 500
Implication for Nifty*
S & P 500
2006, -0.34%
Neutral
Neutral
Nifty
7762, 1.99%
Neutral**
Bullish
China Shanghai Index
3579, 4.20%
Bullish
Bullish
Gold
1066, -0.75%
Bearish
Bearish
WTIC Crude
35.83, 1.33%
Bullish
Bullish
Copper
2.11, -0.26%
Neutral
Neutral
Baltic Dry Index
477, -8.62%
Bearish
Bearish
Euro
1.0868, -1.15%
Bearish
Bearish
Dollar/Yen
121.14, 0.14%
Neutral
Neutral
Dow Transports
7364, -2.13%
Bearish
Bearish
US 10 year Bond Yield
2.20%, 2.81%
Bearish
Bearish
Nyse Summation Index
-244.61, -609.84%
Bearish
Bearish
Junk Bonds (ETF)
33.59, -0.30%
Neutral
Neutral
US Vix
20.70, -15.13%
Bullish
Bullish
20 DMA, S and P 500
2064, Below
Bearish
Neutral
50 DMA, S and P 500
2061, Below
Bearish
Neutral
200 DMA, S and P 500
2062, Below
Bearish
Neutral
20 DMA, Nifty
7796, Below
Neutral
Bearish
50 DMA, Nifty
7954, Below
Neutral
Bearish
200 DMA, Nifty
8234, Below
Neutral
Bearish
India Vix
14.49, -15.66%
Neutral
Bullish
Dollar/Rupee
66.31, -1.25%
Neutral
Bullish




Overall
S & P 500
Nifty

Bullish Indications
3
6

Bearish Indications
9
9

Outlook
Bearish
Bearish

Observation
The Sand P 500 was unchanged and the Nifty was up last week. Indicators are bearish. Markets are in crash mode. Vix, Transports and the high yield market are flashing warning signs.


On the Horizon
Canada – GDP, Japan – CPI, US – Durable goods, Personal consumption data.






*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 was unchanged and the Nifty was up last week. Signals are bearish for the upcoming week. The markets are getting oversold but are in crash mode, 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 7800 (up) and 7700 (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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Cash - 40%
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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.