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, 31 July 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning August 1

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2174, -0.07%
Neutral
Neutral
Nifty
8639, 1.14%
Neutral**
Bullish
China Shanghai Index
2979, -1.11%
Bearish
Bearish
Gold
1358, 2.61%
Bullish
Bullish
WTIC Crude
41.60, -5.86%
Bearish
Bearish
Copper
2.22, -0.63%
Bearish
Bearish
Baltic Dry Index
656, -8.64%
Bearish
Bearish
Euro
1.117, 1.80%
Bullish
Bullish
Dollar/Yen
102.10, -3.83%
Bearish
Bearish
Dow Transports
7846, -1.50%
Bearish
Bearish
High Yield (ETF)
36.06, -0.83%
Bearish
Bearish
US 10 year Bond Yield
1.46%, -7.13%
Bullish
Bullish
Nyse Summation Index
1228, -2.23%
Bearish
Neutral
US Vix
11.87, -1.25%
Bullish
Bullish
20 DMA, S and P 500
2149, Above
Bullish
Neutral
50 DMA, S and P 500
2108, Above
Bullish
Neutral
200 DMA, S and P 500
2041, Above
Bullish
Neutral
20 DMA, Nifty
8506, Above
Neutral
Bullish
50 DMA, Nifty
8281, Above
Neutral
Bullish
200 DMA, Nifty
7846, Above
Neutral
Bullish
India Vix
14.92, -3.74%
Neutral
Bullish
Dollar/Rupee
66.72, -0.64%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
7

10
Bearish Indications
8
7
Outlook
Bearish
Bullish
Observation
The S and P 500 was unchanged and the Nifty was up last week. Indicators are mixed.
Markets are at resistance. Time to tighten those stops.
On the Horizon
China – PMI, Australia – Rate decision,
New Zealand – Employment data, U.K – BOE rate decision
Canada – Employment data, US – 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 S and P 500 was unchanged and the Nifty was up last week. Signals are mixed for the upcoming week. The Vix is suggesting complacency and flight to safety into the Yen, US bonds and Gold has resumed.  The markets are stalling at significant long term resistance and are likely to continue major breakdowns in 2016 after this rally concludes. The critical levels to watch are 2190 (up) and 2160 (down) on the S & P and 8700 (up) and 8550 (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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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.