Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 11

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2930, 3.50%	Bullish	Bullish
Nifty	9252, -6.17%	Neutral **	Bearish
China Shanghai Index	2895, 1.23%	Bullish	Bullish
Gold	1705, 0.23%	Neutral	Neutral
WTIC Crude	24.62, 16.29%	Bullish	Bullish
Copper	2.415, 5.14%	Bullish	Bullish
Baltic Dry Index	514, -16.69%	Bearish	Bearish
Euro	1.0839, -1.33%	Bearish	Bearish
Dollar/Yen	106.68, -0.26%	Neutral	Neutral
Dow Transports	8333, 2.30%	Bullish	Bullish
High Yield (Bond)	98.40, 1.49%	Bullish	Bullish
US 10 year Bond Yield	0.685%, 10.82%	Bearish	Bearish
Nyse Summation Index	160, 160.38%	Bullish	Neutral
US Vix	27.98, -24.76%	Bullish	Bullish
Skew	132	Neutral	Neutral
20 DMA, S and P 500	2843, Above	Bullish	Neutral
50 DMA, S and P 500	2730, Above	Bullish	Neutral
200 DMA, S and P 500	3002, Below	Bearish	Neutral
20 DMA, Nifty	9212, Above	Neutral	Bullish
50 DMA, Nifty	9551, Below	Neutral	Bearish
200 DMA, Nifty	11140, Below	Neutral	Bearish
S & P 500 P/E	21.01	Bearish	Neutral
Nifty P/E	21.28	Neutral	Bearish
India Vix	38.41, 13.00%	Neutral	Bearish-
Dollar/Rupee	75.54, -0.28%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	10	8
Bearish Indications	5	8
Outlook	Bullish	Neutral
Observation	The S and P 500 was up and the Nifty fell last week. Indicators are leaning bullish for the week. The markets have begun a great depression style collapse. Watch those stops.
On the Horizon	UK – GDP, US – CPI, PPI, Eurozone – German GDP,  China - CPI
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Stock charts, investing.com, multpl.com, NSE
**Neutral	Changes less than 0.5% are considered neutral

  

The S and P 500 was up and the Nifty fell last week. Indicators are slightly bullish for the coming week. The S & P is failing again and it is headed to 1800 in the medium term. It is overvalued, overbought and out of touch with economic realities. Long term, the epic meltdown is set to continue resulting in a 5 year plus bear market with lot lower levels maybe as low as 800 on the S and P. QE forever from the FED is about to trigger the deflationary collapse of the century and we have made a major top in global equity markets. The market is looking like the short of a life time with non-conformations from the transports, other global indices and commodities. High valuations continue. The breakdown in Crude and the Euro is a precursor to yet another massive drop in the S and P 500. The recent global virus epidemic (black swan) is likely to dent global GDP significantly and usher in a depression much faster than most think. The trend has changed from bullish to bearish and the markets are getting smashed by a strong dollar. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A 5 year deflationary wave has started in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and over stretched valuations. We are entering 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 into a recession. The critical levels to watch for the week are 2940 (up) and 2920 (down) on the S & P 500 and 9350 (up) and 9150 (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.