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, 3 January 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning January 4

Indicator
Weekly Level / Change / Significance
Implication for
S & P 500
Implication for Nifty*
S & P 500
2044, -0.83%
Bearish
Bearish
Nifty
7963, 1.30%
Neutral**
Bullish
China Shanghai Index
3539, -2.03%
Bearish
Bearish
Gold
1061, -1.42%
Bearish
Bearish
WTIC Crude
37.07, -2.75%
Bearish
Bearish
Copper
2.13, 0.64%
Bullish
Bullish
Baltic Dry Index
478, 0.00%
Neutral
Neutral
Euro
1.093, -0.26%
Neutral
Neutral
Dollar/Yen
120.20, -0.17%
Neutral
Neutral
Dow Transports
7509, -1.49%
Bearish
Bearish
High Yield (ETF)
33.91, 0.12%
Neutral
Neutral
US 10 year Bond Yield
2.27%, 1.16%
Bearish
Bearish
Nyse Summation Index
-20, 85.17%
Bullish
Neutral
US Vix
18.21, 15.69%
Bearish
Bearish
20 DMA, S and P 500
2050, Below
Bearish
Neutral
50 DMA, S and P 500
2067, Below
Bearish
Neutral
200 DMA, S and P 500
2061, Below
Bearish
Neutral
20 DMA, Nifty
7793, Above
Neutral
Bullish
50 DMA, Nifty
7903, Above
Neutral
Bullish
200 DMA, Nifty
8191, Below
Neutral
Bearish
India Vix
14.26, 3.75%
Neutral
Bearish
Dollar/Rupee
66.23, 0.42%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications

2

4
Bearish Indications
10
9
Outlook
Bearish
Bearish
Observation
The Sand P 500 was down and the Nifty was up last week. Indicators are bearish. Looking for downside to resume.
On the Horizon
Canada - Employment data, Euro zone – German employment data, CPI, Euro zone  CPI, U.S – ISM data, FED minutes, employment data, China – 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 was down while the Nifty rallied last week. Signals are bearish for the upcoming week. The markets are failing at resistance and are likely to begin major breakdowns in 2016.  The critical levels to watch are 2060 (up) and 2030 (down) on the S & P and 8000 (up) and 7900 (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. 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.