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, 1 May 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 2

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2065, -1.26%
Bearish
Bearish
Nifty
7850, -0.63%
Neutral**
Bearish
China Shanghai Index
2938, -0.71%
Bearish
Bearish
Gold
1295, 4.96%
Bullish
Bullish
WTIC Crude
45.99, 5.12%
Bullish
Bullish
Copper
2.28, 0.57%
Bullish
Bullish
Baltic Dry Index
703, 2.18%
Bullish
Bullish
Euro
1.135, 1.09%
Bullish
Bullish
Dollar/Yen
106.42, -4.79%
Bearish
Bearish
Dow Transports
7871, -2.65%
Bearish
Bearish
High Yield (ETF)
35.30, 0.74%
Bullish
Bullish
US 10 year Bond Yield
1.82%, -3.65%
Bullish
Bullish
Nyse Summation Index
1215, 4.03%
Bullish
Neutral
US Vix
15.70, 18.76%
Bearish
Bearish
20 DMA, S and P 500
2076, Below
Bearish
Neutral
50 DMA, S and P 500
2032, Above
Bullish
Neutral
200 DMA, S and P 500
2015, Above
Bullish
Neutral
20 DMA, Nifty
7781, Above
Neutral
Bullish
50 DMA, Nifty
7524, Above
Neutral
Bullish
200 DMA, Nifty
7850, Equal
Neutral
Neutral
India Vix
16.54, 0.96%
Neutral
Bearish
Dollar/Rupee
66.43, -0.35%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
10

9
Bearish Indications
6
7
Outlook
Bullish
Bullish
Observation
The Sand P 500 and the Nifty fell last week. Indicators are bullish.
Markets are back at resistance. Time to tighten those stops as downside has resumed.
On the Horizon
Australia - Rate decision, New Zealand – Employment data, China – PMI, Canada – Employment data, U.S – ISM data, Employment 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 the Nifty fell last week. Signals are bullish for the upcoming week. The Vix is suggesting complacency. The markets are back at resistance and are likely to continue major breakdowns in 2016 as the recent rally appears to have concluded. A big move is imminent.  The critical levels to watch are 2080 (up) and 2050 (down) on the S & P and 7900 (up) and 7800 (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.