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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 is a PhD and 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 24 March 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning March 25

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2801, -0.77%
Bearish
Bearish
Nifty
11457, 0.26%
Neutral **
Neutral
China Shanghai Index
3104, 2.73%
Bullish
Bullish
Gold
1319, 1.21%
Bullish
Bullish
WTIC Crude
58.97, 0.77%
Bullish
Bullish
Copper
2.85, -1.93%
Bearish
Bearish
Baltic Dry Index
690, -5.48%
Bearish
Bearish
Euro
1.1315, -0.09%
Neutral
Neutral
Dollar/Yen
109.93, -1.47%
Bearish
Bearish
Dow Transports
10052, -2.50%
Bearish
Bearish
High Yield (ETF)
35.71, 0.14%
Neutral
Neutral
US 10 year Bond Yield
2.44%, -6.06%
Bullish
Bullish
Nyse Summation Index
924, -6.08%
Bearish
Neutral
US Vix
16.48, 27.95%
Bearish
Bearish
Skew
118
Neutral
Neutral
20 DMA, S and P 500
2799, Above
Bullish
Neutral
50 DMA, S and P 500
2734, Above
Bullish
Neutral
200 DMA, S and P 500
2755, Above
Bullish
Neutral
20 DMA, Nifty
11122, Above
Neutral
Bullish
50 DMA, Nifty
10946, Above
Neutral
Bullish
200 DMA, Nifty
10906, Above
Neutral
Bullish
India Vix
16.28, 2.58%
Neutral
Bearish
Dollar/Rupee
69.19 0.32%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
7
7
Bearish Indications
7
7
Outlook
Neutral
Neutral
Observation
The S and P 500 fell and the Nifty was unchanged last week. Indicators are neutral for the week.
The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon
US – GDP, Euro Zone – German employment data, CPI, UK – GDP
*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 march 25


The S and P 500 fell and the Nifty was unchanged last week. Indicators are neutral for the upcoming week. QE forever from the FED is about to trigger the deflationary collapse of the century and we are making a major secondary top in global equity markets. The market got its oversold bounce of about 450 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 has exceeded 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 as the yield curve inverts. The critical levels to watch for the week are 2810 (up) and 2790 (down) on the S & P 500 and 11550 (up) and 11350 (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.