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, 17 July 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning July 18

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2162, 1.49%
Bullish
Bullish
Nifty
8541, 2.62%
Neutral**
Bullish
China Shanghai Index
3054, 2.22%
Bullish
Bullish
Gold
1338, -2.17%
Bearish
Bearish
WTIC Crude
46.28, 2.57%
Bullish
Bullish
Copper
2.23, 5.13%
Bullish
Bullish
Baltic Dry Index
745, 5.97%
Bullish
Bullish
Euro
1.103, -0.20%
Neutral
Neutral
Dollar/Yen
104.91, 4.39%
Bullish
Bullish
Dow Transports
7985, 3.93%
Bullish
Bullish
High Yield (ETF)
36.11, 0.11%
Neutral
Neutral
US 10 year Bond Yield
1.59%, 16.69%
Bearish
Bearish
Nyse Summation Index
1152, 25.95%
Bullish
Neutral
US Vix
12.67, -4.02%
Bullish
Bullish
20 DMA, S and P 500
2099, Above
Bullish
Neutral
50 DMA, S and P 500
2086, Above
Bullish
Neutral
200 DMA, S and P 500
2032, Above
Bullish
Neutral
20 DMA, Nifty
8311, Above
Neutral
Bullish
50 DMA, Nifty
8134, Above
Neutral
Bullish
200 DMA, Nifty
7814, Above
Neutral
Bullish
India Vix
15.64, 3.68%
Neutral
Bearish
Dollar/Rupee
67.08, -0.08%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
12

12
Bearish Indications
2
3
Outlook
Bullish
Bullish
Observation
The S and P 500 and the Nifty rallied last week. Indicators are bullish.
Markets are trying to break above resistance. Time to tighten those stops.
On the Horizon
New Zealand – CPI, England – CPI,
Euro zone – ECB rate decision,
Canada – CPI, Retail sales
*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 Sand P 500 and the Nifty rallied above resistance last week. Signals are bullish for the upcoming week. The Vix is suggesting complacency.  The Yen, gold and treasuries gave up some of the recent flight to safety. The markets are trying to take out significant long term resistance and are likely to continue major breakdowns in 2016 after this rally concludes. The critical levels to watch are 2180 (up) and 2150 (down) on the S & P and 8600 (up) and 8450 (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.