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, 11 September 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 12

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2128, -2.39%
Bearish
Bearish
Nifty
8867, 0.67%
Neutral**
Bullish
China Shanghai Index
3079, 0.38%
Neutral
Neutral
Gold
1335, 0.59%
Bullish
Bullish
WTIC Crude
45.88, 3.24%
Bullish
Bullish
Copper
2.09, 0.70%
Bullish
Bullish
Baltic Dry Index
804, 11.67%
Bullish
Bullish
Euro
1.123, 0.39%
Neutral
Neutral
Dollar/Yen
102.69, -1.29%
Bearish
Bearish
Dow Transports
7823, -1.56%
Bearish
Bearish
High Yield (ETF)
36.15, -1.34%
Bearish
Bearish
US 10 year Bond Yield
1.67%, 4.76%
Bearish
Bearish
Nyse Summation Index
758, -3.85%
Bearish
Neutral
US Vix
17.50, 46.08%
Bearish
Bearish
20 DMA, S and P 500
2178, Below
Bearish
Neutral
50 DMA, S and P 500
2164, Below
Bearish
Neutral
200 DMA, S and P 500
2057, Above
Bullish
Neutral
20 DMA, Nifty
8717, Above
Neutral
Bullish
50 DMA, Nifty
8593, Above
Neutral
Bullish
200 DMA, Nifty
7933, Above
Neutral
Bullish
India Vix
13.23, 2.24%
Neutral
Bearish
Dollar/Rupee
66.93, 0.55%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
5

8
Bearish Indications
9
8
Outlook
Bearish
Neutral
Observation
The S and P 500 fell hard and the Nifty rallied last week. Indicators are bearish.
Markets are breaking down from 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, Switzerland - GDP
*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 fell and the Nifty rallied last week. Signals are bearish for the upcoming week. Market momentum, breadth and sentiment indicators have been showing divergences for months now and a big breakdown is underway.  The markets are likely to continue major breakdowns in 2016. The critical levels to watch are 2140 (up) and 2120 (down) on the S & P and 8900 (up) and 8800 (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.