Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 18

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2864, -2.26%	Bearish	Bearish
Nifty	9137, -1.24%	Neutral **	Bearish
China Shanghai Index	2869, -0.93%	Bearish	Bearish
Gold	1753, 2.29%	Bullish	Bullish
WTIC Crude	29.52, 19.32%	Bullish	Bullish
Copper	2.33, -3.52%	Bearish	Bearish
Baltic Dry Index	407, -20.82%	Bearish	Bearish
Euro	1.0820, -0.19%	Neutral	Neutral
Dollar/Yen	107.04, 0.34%	Neutral	Neutral
Dow Transports	7761, -6.86%	Bearish	Bearish
High Yield (Bond)	97.13, -1.29%	Bearish	Bearish
US 10 year Bond Yield	0.64%, -7.02%	Bullish	Bullish
Nyse Summation Index	79, -50.75%	Bearish	Neutral
US Vix	31.89, 13.97%	Bearish	Bearish
Skew	125	Neutral	Neutral
20 DMA, S and P 500	2856, Above	Bullish	Neutral
50 DMA, S and P 500	2713, Above	Bullish	Neutral
200 DMA, S and P 500	2998, Below	Bearish	Neutral
20 DMA, Nifty	9278, Below	Neutral	Bearish
50 DMA, Nifty	9292, Below	Neutral	Bearish
200 DMA, Nifty	11080, Below	Neutral	Bearish
S & P 500 P/E	20.53	Bearish	Neutral
Nifty P/E	20.98	Neutral	Bearish
India Vix	38.02, -1.02%	Neutral	Bullish
Dollar/Rupee	75.83, 0.39%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	5	5
Bearish Indications	10	12
Outlook	Bearish	Bearish
Observation	The S and P 500 and the Nifty fell last week. Indicators are bearish for the week. The markets have begun a great depression style collapse. Watch those stops.
On the Horizon	UK – Employment data, CPI, Eurozone – CPI,  China – PBOC rate decision, Japan – GDP
*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 and the Nifty fell last week. Indicators are bearish for the coming week. The markets are very close to an epic melt down and the SPX 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 2875 (up) and 2850 (down) on the S & P 500 and 9250 (up) and 9050 (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.