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, 14 August 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning August 15

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2184, 0.05%
Neutral
Neutral
Nifty
8672, -0.13%
Neutral**
Neutral
China Shanghai Index
3051, 2.49%
Bullish
Bullish
Gold
1343, -0.09%
Neutral
Neutral
WTIC Crude
44.49, 6.44%
Bullish
Bullish
Copper
2.14, -0.65%
Bearish
Bearish
Baltic Dry Index
671, 5.50%
Bullish
Bullish
Euro
1.117, 0.73%
Bullish
Bullish
Dollar/Yen
101.23, -0.59%
Bearish
Bearish
Dow Transports
7807, -0.75%
Bearish
Bearish
High Yield (ETF)
36.45, 1.14%
Bullish
Bullish
US 10 year Bond Yield
1.52%, -4.24%
Bullish
Bullish
Nyse Summation Index
1065, -3.39%
Bearish
Neutral
US Vix
11.55, 1.40%
Bearish
Bearish
20 DMA, S and P 500
2172, Above
Bullish
Neutral
50 DMA, S and P 500
2127, Above
Bullish
Neutral
200 DMA, S and P 500
2048, Above
Bullish
Neutral
20 DMA, Nifty
8603, Above
Neutral
Bullish
50 DMA, Nifty
8403, Above
Neutral
Bullish
200 DMA, Nifty
7868, Above
Neutral
Bullish
India Vix
13.77, -4.06%
Neutral
Bullish
Dollar/Rupee
66.91, 0.10%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
9

10
Bearish Indications
5
4
Outlook
Bullish
Bullish
Observation
The S and P 500 and the Nifty were unchanged last week. Indicators are bullish.
Markets are at the top of their recent trading ranges. Time to tighten those stops.
On the Horizon
Japan – GDP, Australia – Employment data
New Zealand – Employment data, Euro Zone – ZEW sentiment survey, U.K – CPI,
US – CPI, Canada - CPI
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Google finance, Stock charts, dailyfx.com
**Neutral
Changes less than 0.5% are considered neutral



The S and P 500 and the Nifty were unchanged last week. Signals are bullish for the upcoming week. The Vix is suggesting complacency despite the market making nominal new highs and momentum, breadth and sentiment indicators are showing divergences.  The markets are likely to continue major breakdowns in 2016 after this rally concludes. The critical levels to watch are 2190 (up) and 2170 (down) on the S & P and 8750 (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.