|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3299,
-0.63% |
Bearish |
Bearish |
|
Nifty |
11050,
-3.95% |
Neutral
** |
Bearish |
|
China
Shanghai Index |
3219,
-3.56% |
Bearish |
Bearish |
|
Gold |
1864,
-4.99% |
Bearish |
Bearish |
|
WTIC
Crude |
40.05,
-2.58% |
Bearish |
Bearish |
|
Copper |
2.98,
-4.44% |
Bearish |
Bearish |
|
Baltic
Dry Index |
1605,
23.84% |
Bullish |
Bullish |
|
Euro |
1.1631,
-1.74% |
Bearish |
Bearish |
|
Dollar/Yen |
105.62,
1.01% |
Bullish |
Bullish |
|
Dow
Transports |
11270,
-1.42% |
Bearish |
Bearish |
|
High
Yield (Bond ETF) |
103.08,
-1.69% |
Bearish |
Bearish |
|
US
10 year Bond Yield |
0.66%,
-5.88% |
Bullish |
Bullish |
|
NYSE
Summation Index |
6,
-97.95% |
Bearish |
Neutral |
|
US
Vix |
26.38,
2.13% |
Bearish |
Bearish |
|
Skew |
129 |
Neutral |
Neutral |
|
20
DMA, S and P 500 |
3382,
Below |
Bearish |
Neutral |
|
50
DMA, S and P 500 |
3351,
Below |
Bearish |
Neutral |
|
200
DMA, S and P 500 |
3107,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
11355,
Below |
Neutral |
Bearish |
|
50
DMA, Nifty |
11299,
Below |
Neutral |
Bearish |
|
200
DMA, Nifty |
10758,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
28.35 |
Bearish |
Neutral |
|
Nifty
P/E |
32.12 |
Neutral |
Bearish |
|
India
Vix |
20.68,
3.14% |
Neutral |
Bearish |
|
Dollar/Rupee |
73.69,
0.20% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
4 |
4 |
|
|
Bearish
Indications |
13 |
14 |
|
|
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 |
India – RBI
rate decision, Euro Zone – German
employment data, CPI, US –
Employment data, GDP, UK - 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 selloff is finally catching up to one of the worst earnings decline periods in stock market history. With extremely high valuations amid a lot of bearish divergences, a September / October crash is on the menu following the small dead cat bounce from the 50dma. Low volatility suggests complacency and more downside ahead.
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 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 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 3310 (up) and 3285
(down) on the S & P 500 and 11150
(up) and 11000 (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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