|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3320,
-0.64% |
Bearish |
Bearish |
|
Nifty |
11505,
0.35% |
Neutral
** |
Neutral |
|
China
Shanghai Index |
3338,
2.38% |
Bullish |
Bullish |
|
Gold |
1958,
0.51% |
Bullish |
Bullish |
|
WTIC
Crude |
41.32,
10.69% |
Bullish |
Bullish |
|
Copper |
3.11,
2.22% |
Bullish |
Bullish |
|
Baltic
Dry Index |
1294,
2.13% |
Bullish |
Bullish |
|
Euro |
1.1840,
-0.04% |
Neutral |
Neutral |
|
Dollar/Yen |
104.57,
-1.49% |
Bearish |
Bearish |
|
Dow
Transports |
11432,
1.32% |
Bullish |
Bullish |
|
High
Yield (Bond ETF) |
104.85,
-0.20% |
Neutral |
Neutral |
|
US
10 year Bond Yield |
0.70%,
3.92% |
Bearish |
Bearish |
|
NYSE
Summation Index |
294,
-14.00% |
Bearish |
Neutral |
|
US
Vix |
25.83,
-3.87% |
Bullish |
Bullish |
|
Skew |
132 |
Neutral |
Neutral |
|
20
DMA, S and P 500 |
3425,
Below |
Bearish |
Neutral |
|
50
DMA, S and P 500 |
3343,
Below |
Bearish |
Neutral |
|
200
DMA, S and P 500 |
3104,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
11470,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
11264,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
10781,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
28.53 |
Bearish |
Neutral |
|
Nifty
P/E |
32.98 |
Neutral |
Bearish |
|
India
Vix |
20.05,
-3.22% |
Neutral |
Bullish |
|
Dollar/Rupee |
73.54,
0.15% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
7 |
11 |
|
|
Bearish
Indications |
7 |
4 |
|
|
Outlook |
Neutral |
Bullish |
|
|
Observation |
The
S and P fell and the Nifty was unchanged last week. Indicators are mixed 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 fell and the Nifty was unchanged week. Indicators are mixed for the coming week. The recent rally to the prior highs on the S and P 500 is on borrowed time as we experience one of the worst earnings decline periods in stock market history with extremely high valuations amid a lot of bearish divergences and a September / October crash is on the menu following the small dead cat bounce from the 50dma. 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 3000 area is emerging on the S and P, and 10000 should arrive on the Nifty in short order. The FED is repeating the Japan experiment and the 3 lost decades in Japan (1989-2019) are 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 meltdown 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 may be 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 lifetime 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 underperformance 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 several bearish divergences and overstretched 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 of late as the yield curve inverts into a recession. The critical levels to watch for the week are 3330 (up) and 3310 (down) on the S & P 500 and 11600 (up) and 11400 (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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