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, 10 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 11

Indicator
Weekly Level / Change / Significance
Implication for
S & P 500
Implication for Nifty*
S & P 500
1922, -5.96%
Bearish
Bearish
Nifty
7601, -4.54%
Neutral**
Bearish
China Shanghai Index
3186, -9.97%
Bearish
Bearish
Gold
1104, 4.11%
Bullish
Bullish
WTIC Crude
32.88, -11.30%
Bearish
Bearish
Copper
2.02, -5.62%
Bearish
Bearish
Baltic Dry Index
429, -10.25%
Bearish
Bearish
Euro
1.093, 0.67%
Bullish
Bullish
Dollar/Yen
117.51, -2.30%
Bearish
Bearish
Dow Transports
6946, -7.49%
Bearish
Bearish
High Yield (ETF)
33.48, -1.27%
Bearish
Bearish
US 10 year Bond Yield
2.13%, -6.13%
Bullish
Bullish
Nyse Summation Index
-158, -775.82%
Bearish
Neutral
US Vix
27.01, 48.33%
Bearish
Bearish
20 DMA, S and P 500
2028, Below
Bearish
Neutral
50 DMA, S and P 500
2059, Below
Bearish
Neutral
200 DMA, S and P 500
2058, Below
Bearish
Neutral
20 DMA, Nifty
7791, Below
Neutral
Bearish
50 DMA, Nifty
7846, Below
Neutral
Bearish
200 DMA, Nifty
8167, Below
Neutral
Bearish
India Vix
17.80, 24.81%
Neutral
Bearish
Dollar/Rupee
66.89, 1.00%
Bearish
Bearish


Overall


S & P 500


Nifty

Bullish Indications

3

3
Bearish Indications
14
15
Outlook
Bearish
Bearish
Observation
The Sand P 500 and the Nifty were down hard last week. Indicators are bearish. Looking for downside to continue.
On the Horizon
Australia - Employment data, Euro zone – German GDP, U.K – Rate decision, U.S – Retail sales, consumer confidence, China – Loan & financing 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 and Nifty fell hard last week. Signals are bearish for the upcoming week. The markets are in crash mode and are likely to continue to breakdown in 2016.  The critical levels to watch are 1940 (up) and 1900 (down) on the S & P and 7600 (up) and 7500 (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.