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, 8 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 9

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2057, -0.40%
Neutral
Neutral
Nifty
7734, -1.48%
Neutral**
Bearish
China Shanghai Index
2913, -0.85%
Bearish
Bearish
Gold
1290,-0.40%
Neutral
Neutral
WTIC Crude
44.56, -3.11%
Bearish
Bearish
Copper
2.15, -5.70%
Bearish
Bearish
Baltic Dry Index
631, -10.24%
Bearish
Bearish
Euro
1.140, -0.40%
Neutral
Neutral
Dollar/Yen
107.12, 0.74%
Bullish
Bullish
Dow Transports
7739, -1.69%
Bearish
Bearish
High Yield (ETF)
34.70, -1.19%
Bearish
Bearish
US 10 year Bond Yield
1.78%, -2.20%
Bullish
Bullish
Nyse Summation Index
1064, -12.42%
Bearish
Neutral
US Vix
14.72, -6.24%
Bullish
Bullish
20 DMA, S and P 500
2078, Below
Bearish
Neutral
50 DMA, S and P 500
2045, Above
Bullish
Neutral
200 DMA, S and P 500
2013, Above
Bullish
Neutral
20 DMA, Nifty
7791, Below
Neutral
Bearish
50 DMA, Nifty
7589, Above
Neutral
Bullish
200 DMA, Nifty
7833, Below
Neutral
Bearish
India Vix
16.95, 2.48%
Neutral
Bearish
Dollar/Rupee
66.61, 0.28%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
5

4
Bearish Indications
8
10
Outlook
Bearish
Bearish
Observation
The Sand P 500 and the Nifty fell last week. Indicators are bearish.
Markets are failing at resistance. Time to tighten those stops as downside has resumed.
On the Horizon
China – Loan & Financing data, CPI, Euro Zone – German GDP, Euro Zone GDP, England – Rate decision, U.S – Retail sales, U. Mich. consumer confidence
*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 bearish for the upcoming week. The Vix is suggesting complacency. The markets are breaking down from 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 2070 (up) and 2050 (down) on the S & P and 7800 (up) and 7700 (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.