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, 31 January 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning February 1

Indicator
Weekly Level / Change / Significance
Implication for
S & P 500
Implication for Nifty*
S & P 500
1940, 1.75%
Bullish
Bullish
Nifty
7564, 1.90%
Neutral**
Bullish
China Shanghai Index
2738, -6.14%
Bearish
Bearish
Gold
1118, 1.84%
Bullish
Bullish
WTIC Crude
33.74, 4.62%
Bullish
Bullish
Copper
2.06, 2.90%
Bullish
Bullish
Baltic Dry Index
317, -10.45%
Bearish
Bearish
Euro
1.083, -0.35%
Neutral
Neutral
Dollar/Yen
121.05, 1.93%
Bullish
Bullish
Dow Transports
6907, 1.89%
Bullish
Bullish
High Yield (ETF)
33.21, 0.76%
Bullish
Bullish
US 10 year Bond Yield
1.93%, -5.71%
Bullish
Bullish
Nyse Summation Index
-725, 5.82%
Bullish
Neutral
US Vix
20.20, -9.58%
Bullish
Bullish
20 DMA, S and P 500
1925, Above
Bullish
Neutral
50 DMA, S and P 500
2008, Below
Bearish
Neutral
200 DMA, S and P 500
2046, Below
Bearish
Neutral
20 DMA, Nifty
7536, Above
Neutral
Bullish
50 DMA, Nifty
7705, Below
Neutral
Bearish
200 DMA, Nifty
8088, Below
Neutral
Bearish
India Vix
17.24, -8.40%
Neutral
Bullish
Dollar/Rupee
67.88, 0.44%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications

11

12
Bearish Indications
4
5
Outlook
Bullish
Bullish
Observation
The Sand P 500 and the Nifty rallied last week on what will prove to be yet another failed. QE from Japan. Indicators are bullish. Looking for the current bounce to hit overhead resistance at slightly higher levels.
On the Horizon
Australia– Rate decision,  Canada – Employment data, China-PMI, New Zealand – Employment data, Euro zone – German Employment data, U.K – Rate decision, U.S – Employment data, ISM data, India - Rate decision.
*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 rallied last week as expected. Signals are bullish for the upcoming week. The markets are in crash mode and are likely to continue major breakdowns in 2016 after this oversold bounce hits resistance near the 1980 mark on the S&P. The critical levels to watch are 1960 (up) and 1920 (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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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.