Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning July 20

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3225, 1.25%	Bullish	Bullish
Nifty	10902, 1.24%	Neutral **	Bullish
China Shanghai Index	3214, -5.00%	Bearish	Bearish
Gold	1812, 0.57%	Bullish	Bullish
WTIC Crude	40.75, 0.49%	Neutral	Neutral
Copper	2.90, 0.17%	Neutral	Neutral
Baltic Dry Index	1699, -6.13%	Bearish	Bearish
Euro	1.1431, 1.16%	Bullish	Bullish
Dollar/Yen	107.00, 0.09%	Neutral	Neutral
Dow Transports	9900, 6.31%	Bullish	Bullish
High Yield (Bond ETF)	103.69, 1.53%	Bullish	Bullish
US 10 year Bond Yield	0.62%, -3.11%	Bullish	Bullish
Nyse Summation Index	671, 1.77%	Bullish	Neutral
US Vix	25.68, -5.90%	Bullish	Bullish
Skew	141	Bearish	Bearish
20 DMA, S and P 500	3137, Above	Bullish	Neutral
50 DMA, S and P 500	3068, Above	Bullish	Neutral
200 DMA, S and P 500	3033, Above	Bullish	Neutral
20 DMA, Nifty	10574, Above	Neutral	Bullish
50 DMA, Nifty	9987, Above	Neutral	Bullish
200 DMA, Nifty	10869, Above	Neutral	Bullish
S & P 500 P/E	27.72	Bearish	Neutral
Nifty P/E	28.55	Neutral	Bearish
India Vix	24.16, -3.15%	Neutral	Bullish
Dollar/Rupee	74.90, -0.40%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	11	12
Bearish Indications	4	4
Outlook	Bullish	Bullish
Observation	The S and P and the Nifty rallied last week. Indicators are bullish for the week. The markets have begun a great depression style collapse. Watch those stops.
On the Horizon	China - PBOC rate decision
*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 rallied last week. Indicators are bullish for the coming week. The recent rally is on borrowed time as we head into one of the worst earnings decline period in stock market history with extremely high valuations. After extreme euphoria for the indices a highly probable selloff to the 2700 area is emerging on the S and P, and 9000 should arrive on the Nifty in short order. The FED is repeating the Japan experiment and the lost 3 decades in Japan (1989-2019) is set to repeat across the globe. SPX 1500 and lower by year end and we stay there till 2050, scary? The markets are very close to an epic melt down and the SPX is headed way lower. The markets are 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 3240 (up) and 3210 (down) on the S & P 500 and 11000 (up) and 10800 (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. Here's the outlook from@JoeFriday_714:

JF's Sunday Morning Charts - Full thread inside (For informational purposes & not trading advice). 😎#SPX Weekly - Big picture = still chopping inside the PRZ for potential Leg C... with the Gap Fill just overhead. pic.twitter.com/ZqBe8NOxUe

— JoeFriday714 (@joefriday_714) July 19, 2020