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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Saturday, 19 November 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning November 21

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2182, 0.81%
Bullish
Bullish
Nifty
8074, -2.68%
Neutral**
Bearish
China Shanghai Index
3193, -0.10%
Neutral
Neutral
Gold
1209, -1.27%
Bearish
Bearish
WTIC Crude
46.36, 6.80%
Bullish
Bullish
Copper
2.47, -1.65%
Bearish
Bearish
Baltic Dry Index
1257, 20.29%
Bullish
Bullish
Euro
1.059, -2.47%
Bearish
Bearish
Dollar/Yen
110.89, 3.99%
Bullish
Bullish
Dow Transports
8857, 3.24%
Bullish
Bullish
High Yield (ETF)
35.62, 1.39%
Bullish
Bullish
US 10 year Bond Yield
2.34%, 10.30%
Bearish
Bearish
Nyse Summation Index
-182, 39.02%
Bullish
Neutral
US Vix
12.85, -9.32%
Bullish
Bullish
20 DMA, S and P 500
2143, Above
Bullish
Neutral
50 DMA, S and P 500
2146, Above
Bullish
Neutral
200 DMA, S and P 500
2096, Above
Bullish
Neutral
20 DMA, Nifty
8469, Below
Neutral
Bearish
50 DMA, Nifty
8633, Below
Neutral
Bearish
200 DMA, Nifty
8131, Below
Neutral
Bearish
India Vix
17.81, 2.53%
Neutral
Bearish
Dollar/Rupee
68.15, 0.90%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
11

7
Bearish Indications
4
10
Outlook
Bulllish
Bearish
Observation
The S and P 500 rallied and the Nifty fell hard last week. Indicators are mixed.
The oversold bounce is largely over and downside is about to resume. Time to watch those stops.
On the Horizon
Japan - CPI, U.K – Budget, GDP, U.S – Trade balance, Durable goods, FED minutes
*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

s and p 500 rising wedge

The S and P 500 rallied and the Nifty fell hard last week. Signals are mixed for the upcoming week. Market momentum and breadth have been showing divergences for months now and sentiment indicators are back in complacent mode and a big breakdown will likely start soon. A big move is coming very soon in the markets. Bond yields have made a dramatic surge up and risky segments of the market like high yield and emerging markets are breaking down on broad dollar strength. The critical levels to watch are 2190 (up) and 2170 (down) on the S & P and 8200 (up) and 8000 (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. Love your thoughts and feedback.



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Cash - 40%
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Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
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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.