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 April 2016

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

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2073, 1.81%
Bullish
Bullish
Nifty
7713, -0.04%
Neutral**
Neutral
China Shanghai Index
3010, 1.64%
Bullish
Bullish
Gold
1223, 0.53%
Bullish
Bullish
WTIC Crude
36.63, -7.48%
Bearish
Bearish
Copper
2.17, -3.08%
Bearish
Bearish
Baltic Dry Index
450, 12.22%
Bullish
Bullish
Euro
1.138, 1.83%
Bullish
Bullish
Dollar/Yen
111.60, -1.12%
Bearish
Bearish
Dow Transports
7888, -0.48%
Neutral
Neutral
High Yield (ETF)
34.14, 0.51%
Bullish
Bullish
US 10 year Bond Yield
1.79%, -5.68%
Bullish
Bullish
Nyse Summation Index
1076, 8.67%
Bullish
Neutral
US Vix
13.10, -11.13%
Bullish
Bullish
20 DMA, S and P 500
2030, Above
Bullish
Neutral
50 DMA, S and P 500
1958, Above
Bullish
Neutral
200 DMA, S and P 500
2016, Above
Bullish
Neutral
20 DMA, Nifty
7575, Above
Neutral
Bullish
50 DMA, Nifty
7384, Above
Neutral
Bullish
200 DMA, Nifty
7893, Below
Neutral
Bearish
India Vix
17.28, 5.71%
Neutral
Bearish
Dollar/Rupee
66.23, -1.02%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
12

10
Bearish Indications
3
5
Outlook
Bullish
Bullish
Observation
The Sand P 500 rallied and the Nifty was unchanged week. Indicators are bullish.
Markets are back at resistance. Time to tighten those stops as downside may resume any moment.
On the Horizon
Australia – Rate decision, U.S –ISM non manufacturing, Yellen Speech, Canada – Employment data, India - RBI 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 rallied and the Nifty was unchanged last week. Signals are bullish for the upcoming week. Transports are diverging and the Vix is suggesting complacency. The markets are back at resistance and are likely to continue major breakdowns in 2016 as the recent rally has almost concluded. A big move is imminent.  The critical levels to watch are 2080 (up) and 2060 (down) on the S & P and 7750 (up) and 7650 (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.