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

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2620, -5.16%	Bearish	Bearish
Nifty	10455, -2.84%	Neutral **	Bearish
China Shanghai Index	3130, -9.60%	Bearish	Bearish
Gold	1316, -1.62%	Bearish	Bearish
WTIC Crude	59.20, -9.55%	Bearish	Bearish
Copper	3.03, -4.83%	Bearish	Bearish
Baltic Dry Index	1106, -0.72%	Bearish	Bearish
Euro	1.2252, -1.66%	Bearish	Bearish
Dollar/Yen	108.78, -1.26%	Bearish	Bearish
Dow Transports	10137, -5.15%	Bearish	Bearish
High Yield (ETF)	35.68, -1.63%	Bearish	Bearish
US 10 year Bond Yield	2.83%, -0.88%	Bullish	Bullish
Nyse Summation Index	-55, -114.29%	Bearish	Neutral
US Vix	29.06, 67.88%	Bearish	Bearish
Skew	129	Neutral	Neutral
20 DMA, S and P 500	2775, Below	Bearish	Neutral
50 DMA, S and P 500	2719, Below	Bearish	Neutral
200 DMA, S and P 500	2539, Above	Bullish	Neutral
20 DMA, Nifty	10824, Below	Neutral	Bearish
50 DMA, Nifty	10562, Below	Neutral	Bearish
200 DMA, Nifty	10047, Above	Neutral	Bullish
India Vix	19.23, 26.10%	Neutral	Bearish
Dollar/Rupee	64.23, 0.00%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	2	2
Bearish Indications	14	15
Outlook	Bearish	Bearish
Observation	The S and P 500 and the Nifty fell sharply last week. Indicators are bearish. The markets have made important tops. Time to watch those stops.
On the Horizon	Japan – GDP, Australia – Employment data, Euro Zone – German GDP, CPI, UK – CPI, Retail sales, U.S – CPI, Retail sales, Oil inventories, PPI
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, investing.com
**Neutral	Changes less than 0.5% are considered neutral

The S and P 500 and the Nifty fell sharply for the second week in a row. Signals are bearish for the upcoming week. Quantitative tightening by the FED is yet to be priced in fully and sentiment indicators are back in complacency mode. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Divergences in high yield, transports and surging bond yields are flashing warning signs. An interest rate shock can’t be ruled out. Indian market volatility is only 70% of US market volatility so there is complacency and some catch up left on the down side. The critical levels to watch are 2630 (up) and 2610(down) on the S & P and 10550 (up) and 10350 (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.