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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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Monday, 3 June 2019

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning June 03

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2752, -2.62%
Bearish
Bearish
Nifty
11923, 0.70%
Neutral **
Bullish
China Shanghai Index
2899, 1.50%
Bullish
Bullish
Gold
1311, 2.71%
Bullish
Bullish
WTIC Crude
53.50, -10.51%
Bearish
Bearish
Copper
2.64, -3.13%
Bearish
Bearish
Baltic Dry Index
1096, 2.81%
Bullish
Bullish
Euro
1.1167, -0.28%
Neutral
Neutral
Dollar/Yen
108.26, -1.11%
Bearish
Bearish
Dow Transports
9738, -3.94%
Bearish
Bearish
High Yield (Bond)
106.15, -0.85%
Bearish
Bearish
US 10 year Bond Yield
2.15%, -9.73%
Bullish
Bullish
Nyse Summation Index
243, -45.42%
Bearish
Neutral
US Vix
18.71, 22.27%
Bearish
Bullish
Skew
113
Neutral
Neutral
20 DMA, S and P 500
2848, Below
Bearish
Neutral
50 DMA, S and P 500
2870, Below
Bearish
Neutral
200 DMA, S and P 500
2776, Below
Bearish
Neutral
20 DMA, Nifty
11600, Above
Neutral
Bullish
50 DMA, Nifty
11613, Above
Neutral
Bullish
200 DMA, Nifty
11073, Above
Neutral
Bullish
India Vix
16.07, -1.42%
Neutral
Bullish
Dollar/Rupee
69.58, -0.30%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
4
10
Bearish Indications
10
6
Outlook
Bearish
Bullish
Observation
The S and P 500 was down and the Nifty was up 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 – CPI, ECB rate decision, India – RBI rate decision
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Stock charts, investing.com
**Neutral
Changes less than 0.5% are considered neutral


stock market signals june 03

 The S and P 500 fell and the Nifty was up last week. Indicators are mixed for the upcoming week. QE forever from the FED is about to trigger the deflationary collapse of the century and we are very close to another top in global equity markets. The market has rallied 600 points from the December lows but a 5 year bear market is in the making with a secondary top in place. 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. 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 2760 (up) and 2740 (down) on the S & P 500 and 12000 (up) and 11850 (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%
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.