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, 24 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 25

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2175, 0.61%
Bullish
Bullish
Nifty
8541, 0.00%
Neutral**
Neutral
China Shanghai Index
3013, -1.36%
Bearish
Bearish
Gold
1323, -1.07%
Bearish
Bearish
WTIC Crude
44.19, -4.52%
Bearish
Bearish
Copper
2.24, 0.11%
Neutral
Neutral
Baltic Dry Index
718, -3.62%
Bearish
Bearish
Euro
1.098, -0.53%
Bearish
Bearish
Dollar/Yen
106.20, 1.27%
Bullish
Bullish
Dow Transports
7966, -0.24%
Neutral
Neutral
High Yield (ETF)
36.36, 0.69%
Bullish
Bullish
US 10 year Bond Yield
1.57%, -1.51%
Bullish
Bullish
Nyse Summation Index
1256, 9.06%
Bullish
Neutral
US Vix
12.67, -4.02%
Bullish
Bullish
20 DMA, S and P 500
2119, Above
Bullish
Neutral
50 DMA, S and P 500
2097, Above
Bullish
Neutral
200 DMA, S and P 500
2037, Above
Bullish
Neutral
20 DMA, Nifty
8388, Above
Neutral
Bullish
50 DMA, Nifty
8202, Above
Neutral
Bullish
200 DMA, Nifty
7832, Above
Neutral
Bullish
India Vix
15.50, -0.90%
Neutral
Bullish
Dollar/Rupee
67.15, 0.11%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
9

9
Bearish Indications
5
5
Outlook
Bullish
Bullish
Observation
The Sand P 500 rallied and the Nifty was unchanged last week. Indicators are bullish.
Markets are trying to break above resistance. Time to tighten those stops.
On the Horizon
Japan – Rate decision, CPI, Australia– CPI, UK – GDP,
Euro zone – German employment data, German CPI, Euro zone GDP,
Canada – GDP, US – Durable goods, Consumer confidence, FOMC rate decision, GDP, Personal consumption
*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 rallied and the Nifty was unchanged last week. Signals are bullish for the upcoming week. The Vix is suggesting complacency.  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 2190 (up) and 2160 (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.