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 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 11

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2048, -1.21%
Bearish
Bearish
Nifty
7555, -2.05%
Neutral**
Bearish
China Shanghai Index
2985, -0.82%
Bearish
Bearish
Gold
1240, 1.35%
Bullish
Bullish
WTIC Crude
39.66, 8.27%
Bullish
Bullish
Copper
2.09, -3.83%
Bearish
Bearish
Baltic Dry Index
539, 19.78%
Bullish
Bullish
Euro
1.138, 0.19%
Neutral
Neutral
Dollar/Yen
108.09, -3.16%
Bearish
Bearish
Dow Transports
7736, -1.92%
Bearish
Bearish
High Yield (ETF)
34.14, 0.00%
Neutral
Neutral
US 10 year Bond Yield
1.72%, -4.02%
Bullish
Bullish
Nyse Summation Index
941, -12.54%
Bearish
Neutral
US Vix
15.36, 17.25%
Bearish
Bearish
20 DMA, S and P 500
2045, Above
Bullish
Neutral
50 DMA, S and P 500
1975, Above
Bullish
Neutral
200 DMA, S and P 500
2014, Above
Bullish
Neutral
20 DMA, Nifty
7611, Below
Neutral
Bearish
50 DMA, Nifty
7408, Above
Neutral
Bullish
200 DMA, Nifty
7882, Below
Neutral
Bearish
India Vix
16.43, -4.89%
Neutral
Bullish
Dollar/Rupee
66.54, 0.47%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
7

6
Bearish Indications
7
9
Outlook
Neutral
Bearish
Observation
The Sand P 500 and the Nifty sold off last week. Indicators are mixed.
Markets are back at resistance. Time to tighten those stops as downside has resumed.
On the Horizon
China - Financing & Loan data, CPI, GDP, Australia – Employment data, U.K – CPI, Rate decision, U.S –Retail sales, CPI, Consumer confidence, Canada – 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 the Nifty fell hard last week. Signals are mixed for the upcoming week. Transports are diverging and the Vix is suggesting complacency. The Yen is suggesting that global risk appetite is waning significantly. The markets are back at resistance and are likely to continue major breakdowns in 2016 as the recent rally has concluded. A big move is imminent.  The critical levels to watch are 2060 (up) and 2040 (down) on the S & P and 7650 (up) and 7450 (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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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.