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, 19 June 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning June 20

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2071, -1.19%
Bearish
Bearish
Nifty
8170, 0.00%
Neutral**
Neutral
China Shanghai Index
2885, -1.44%
Bearish
Bearish
Gold
1302, 1.98%
Bullish
Bullish
WTIC Crude
48.86, -0.04%
Neutral
Neutral
Copper
2.05, 1.33%
Bullish
Bullish
Baltic Dry Index
587, -3.93%
Bearish
Bearish
Euro
1.122, -0.22%
Neutral
Neutral
Dollar/Yen
104.22, -2.51%
Bearish
Bearish
Dow Transports
7590, -2.25%
Bearish
Bearish
High Yield (ETF)
34.95, -0.94%
Bearish
Bearish
US 10 year Bond Yield
1.62%, -1.28%
Bullish
Bullish
Nyse Summation Index
784, -20.89%
Bearish
Neutral
US Vix
19.41, 13.98%
Bearish
Bearish
20 DMA, S and P 500
2089, Below
Bearish
Neutral
50 DMA, S and P 500
2078, Below
Bearish
Neutral
200 DMA, S and P 500
2017, Above
Bullish
Neutral
20 DMA, Nifty
8123, Above
Neutral
Bullish
50 DMA, Nifty
7935, Above
Neutral
Bullish
200 DMA, Nifty
7768, Above
Neutral
Bullish
India Vix
17.35, 8.64%
Neutral
Bearish
Dollar/Rupee
67.06, 0.14%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
4

6
Bearish Indications
10
8
Outlook
Bearish
Bearish
Observation
The S and P 500 fell and the Nifty was unchanged last week. Indicators are bearish.
Markets are breaking down from resistance. Time to tighten those stops.
On the Horizon
Euro zone – German ZEW survey, England – Brexit vote,
U.S – Durable goods
*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 S and P 500 fell and the Nifty was unchanged last week. Signals are bearish for the upcoming week. The Vix, transports and the yen are flashing major warning signs. The markets are breaking down from resistance and are likely to continue major breakdowns in 2016. The critical levels to watch are 2080 (up) and 2060 (down) on the S & P and 8250 (up) and 8100 (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 support and resistance levels 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.