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Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed. 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, 30 December 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning December 31

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2486, 2.86%
Bullish
Bullish
Nifty
10860, 0.98%
Neutral **
Bullish
China Shanghai Index
2494, -0.89%
Bearish
Bearish
Gold
1283, 1.98%
Bullish
Bullish
WTIC Crude
45.33, -0.57%
Bearish
Bearish
Copper
2.68, 0.28%
Neutral
Neutral
Baltic Dry Index
1271, -0.63%
Bearish
Bearish
Euro
1.1437, 0.24%
Neutral
Neutral
Dollar/Yen
110.21, -0.99%
Bearish
Bearish
Dow Transports
9109, 2.64%
Bullish
Bullish
High Yield (ETF)
33.54, 1.02%
Bullish
Bullish
US 10 year Bond Yield
2.74%, -2.01%
Bullish
Bullish
Nyse Summation Index
-1083, -23.44%
Bearish
Neutral
US Vix
28.34, -5.88%
Bullish
Bullish
Skew
117
Neutral
Neutral
20 DMA, S and P 500
2589, Below
Bearish
Neutral
50 DMA, S and P 500
2667, Below
Bearish
Neutral
200 DMA, S and P 500
2747, Below
Bearish
Neutral
20 DMA, Nifty
10779, Above
Neutral
Bullish
50 DMA, Nifty
10575, Above
Neutral
Bullish
200 DMA, Nifty
10767, Above
Neutral
Bullish
India Vix
15.27, -4.52%
Neutral
Bullish
Dollar/Rupee
69.70, -0.75%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
6
12
Bearish Indications
8
4
Outlook
Bearish
Bullish
Observation
The S and P 500 and the Nifty rallied last week. Indicators are mixed for the week.
The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon
US – Employment data, Euro Zone – German Employment data, CPI
*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


stock market signals december 31


The S and P 500 and the Nifty rallied last week. Indicators are bearish for the upcoming week. The market got its oversold bounce of about a 100 points but a 5 year bear market is in the making. The trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. The India vix is half the US vix suggesting there may be a sudden catch up on the downside for the Indian market in 2019. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. We are on the verge of a multi-year great depression. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Tail risk has been very high off late. The critical levels to watch for the week are 2500 (up) and 2475 (down) on the S & P 500 and 10950 (up) and 10750 (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 and a happy new year.

Saturday, 22 December 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning December 24

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2417, -7.05%
Bearish
Bearish
Nifty
10754, -0.48%
Neutral **
Neutral
China Shanghai Index
2516, -2.99%
Bearish
Bearish
Gold
1258, 1.35%
Bullish
Bullish
WTIC Crude
45.59, -10.96%
Bearish
Bearish
Copper
2.67, -3.20%
Bearish
Bearish
Baltic Dry Index
1279, -8.71%
Bearish
Bearish
Euro
1.1410, 0.90%
Bullish
Bullish
Dollar/Yen
111.31, -1.82%
Bearish
Bearish
Dow Transports
8875, -6.72%
Bearish
Bearish
High Yield (ETF)
33.20, -3.42%
Bullish
Bullish
US 10 year Bond Yield
2.79%, -3.42%
Bullish
Bullish
Nyse Summation Index
-877, -80.24%
Bearish
Neutral
US Vix
30.11, 39.20%
Bearish
Bearish
Skew
122
Neutral
Neutral
20 DMA, S and P 500
2635, Below
Bearish
Neutral
50 DMA, S and P 500
2692, Below
Bearish
Neutral
200 DMA, S and P 500
2754, Below
Bearish
Neutral
20 DMA, Nifty
10773, Below
Neutral
Bearish
50 DMA, Nifty
10575, Above
Neutral
Bullish
200 DMA, Nifty
10761, Below
Neutral
Bearish
India Vix
15.99, 5.51%
Neutral
Bearish
Dollar/Rupee
70.22, -2.42%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
4
6
Bearish Indications
12
11
Outlook
Bearish
Bearish
Observation
The S and P 500 and the Nifty fell. Indicators are bearish for the week.
The markets are on the verge of a great depression. Watch those stops.
On the Horizon
US – Powell speech
*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


stock market signals december 24


The S and P 500 and the Nifty fell last week. Indicators are bearish for the upcoming week. The market is oversold and may bounce a 100 points but a 5 year bear market is in the making. The trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. We are on the verge of a multi-year great depression. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Tail risk has been very high off late. The critical levels to watch for the week are 2430 (up) and 2400 (down) on the S & P 500 and 10850 (up) and 10650 (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 Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

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.