|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3427, -2.31% |
Bearish |
Bearish |
|
Nifty |
11334,
-2.69% |
Neutral
** |
Bearish |
|
China
Shanghai Index |
3355, -1.42% |
Bearish |
Bearish |
|
Gold |
1941, -1.73% |
Bearish |
Bearish |
|
WTIC Crude |
39.50,
-8.08% |
Bearish |
Bearish |
|
Copper |
3.08, 2.70% |
Bullish |
Bullish |
|
Baltic
Dry Index |
1395, -6.25% |
Bearish |
Bearish |
|
Euro |
1.1838,
-0.55% |
Bearish |
Bearish |
|
Dollar/Yen |
106.25,
0.86% |
Bullish |
Bullish |
|
Dow
Transports |
11226,
-0.85% |
Bearish |
Bearish |
|
High
Yield (Bond ETF) |
105.06,
-0.69% |
Bearish |
Bearish |
|
US 10
year Bond Yield |
0.72%,
-0.47% |
Neutral |
Neutral |
|
Nyse
Summation Index |
545, -19.31% |
Bearish |
Neutral |
|
US Vix |
30.75,
33.93% |
Bearish |
Bearish |
|
Skew |
133 |
Neutral |
Neutral |
|
20
DMA, S and P 500 |
3429, Below |
Bearish |
Neutral |
|
50
DMA, S and P 500 |
3299, Above |
Bullish |
Neutral |
|
200
DMA, S and P 500 |
3093, Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
11403,
Below |
Neutral |
Bearish |
|
50
DMA, Nifty |
11096,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
10810,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
29.46 |
Bearish |
Neutral |
|
Nifty
P/E |
32.49 |
Neutral |
Bearish |
|
India
Vix |
22.15,
20.74% |
Neutral |
Bearish |
|
Dollar/Rupee |
73.29,
0.24% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
4 |
4 |
|
|
Bearish
Indications |
12 |
13 |
|
|
Outlook |
Bearish |
Bearish |
|
|
Observation |
The S
and P 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 |
Euro Zone
– ECB rate decision, UK – GDP, US – PPI, CPI, 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 recent rally to the prior highs is on borrowed
time as we experience one of the worst
earnings decline period in stock market history with extremely high valuations amid a lot of bearish divergences and a
September / October crash is on the menu. We rallied 46% right after the great
depressions (1930’s) first collapse and we have rallied over 50% in our most
recent rally of the lows in a similar 6 month period. 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 3440 (up) and 3415
(down) on the S & P 500 and 11400 (up) and 11250 (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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