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, 4 June 2017

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning June 05


Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2439, 0.96%
Bullish
Bullish
Nifty
9654, 0.61%
Neutral **
Bullish
China Shanghai Index
3106, -0.15%
Neutral
Neutral
Gold
1280, 0.95%
Bullish
Bullish
WTIC Crude
47.66, -4.30%
Bearish
Bearish
Copper
2.57, 0.33%
Neutral
Neutral
Baltic Dry Index
830, -8.99%
Bearish
Bearish
Euro
1.1283, 0.88%
Bullish
Bullish
Dollar/Yen
110.42, -0.80%
Bearish
Bearish
Dow Transports
9332, 1.69%
Bullish
Bullish
High Yield (ETF)
37.28, 0.43%
Neutral
Neutral
US 10 year Bond Yield
2.16%, -4.04%
Bullish
Bullish
Nyse Summation Index
583, 7.34%
Bullish
Neutral
US Vix
9.75, -0.61%
Bullish
Bullish
Skew
124
Neutral
Neutral
20 DMA, S and P 500
2401, Above
Bullish
Neutral
50 DMA, S and P 500
2378, Above
Bullish
Neutral
200 DMA, S and P 500
2268, Above
Bullish
Neutral
20 DMA, Nifty
9481, Above
Neutral
Bullish
50 DMA, Nifty
9312, Above
Neutral
Bullish
200 DMA, Nifty
8743, Above
Neutral
Bullish
India Vix
10.81, -0.48%
Neutral
Neutral
Dollar/Rupee
64.26, -0.46%
Neutral
Neutral


Overall


S & P 500


Nifty


Bullish Indications
10

10

Bearish Indications
3
3

Outlook
Bullish
Bullish

Observation
The S and P 500 and the Nifty made new highs last week. Indicators are bullish.
The market is at new highs. Time to tighten those stops.


On the Horizon
China – CPI, New loan data, Australia – Rate decision, GDP, Euro Zone –ECB rate decision, Draghi speech,
U.S – ISM services, Canada – Employment data, Mexico – Local elections, India – RBI rate decision






*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 made new highs last week. Signals are bullish for the upcoming week. Past and future FED rate hikes are yet to be priced in and sentiment indicators are back in complacency mode. Market internals, the transports and commodities are flashing major warning signs of a large decline ahead. The critical levels to watch are 2450 (up) and 2430 (down) on the S & P and 9700 (up) and 9550 (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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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.