|
Asset Class |
Weekly Level / Change |
Implication for S & P 500 |
Implication for Nifty* |
|
S & P
500 |
5459, -0.83% |
Bearish |
Bearish |
|
Nifty |
24835, 1.24% |
Neutral ** |
Bullish |
|
China
Shanghai Index |
2891, -3.07% |
Bearish |
Bearish |
|
Gold |
2428, 2.72% |
Bullish |
Bullish |
|
WTIC Crude |
76.44, -4.61% |
Bearish |
Bearish |
|
Copper |
4.11, -3.00% |
Bearish |
Bearish |
|
CRB Index |
277, -1.06% |
Bearish |
Bearish |
|
Baltic Dry
Index |
1808, -5.44% |
Bearish |
Bearish |
|
Euro |
1.0856, -0.19% |
Neutral |
Neutral |
|
Dollar/Yen |
153.77, -2.36% |
Bearish |
Bearish |
|
Dow Transports |
15920, 0.86% |
Bullish |
Neutral |
|
Corporate
Bonds (ETF) |
108.61, 0.21% |
Neutral |
Neutral |
|
High Yield
Bonds (ETF) |
95.54, 0.35% |
Neutral |
Neutral |
|
US 10-year
Bond Yield |
4.20%, -0.92% |
Bullish |
Bullish |
|
NYSE
Summation Index |
614, 10% |
Bullish |
Neutral |
|
US Vix |
16.39, -0.79% |
Bullish |
Neutral |
|
S & P
500 Skew |
132 |
Neutral |
Neutral |
|
CNN Fear
& Greed Index |
Neutral |
Neutral |
Neutral |
|
Nifty MMI
Index |
Extreme Greed |
Neutral |
Bearish |
|
20 DMA, S
& P 500 |
5544, Below |
Bearish |
Neutral |
|
50 DMA, S
& P 500 |
5436, Above |
Bullish |
Neutral |
|
200 DMA, S
& P 500 |
4981,
Above |
Bullish |
Neutral |
|
20 DMA,
Nifty |
24413, Above |
Neutral |
Bullish |
|
50 DMA,
Nifty |
23597, Above |
Neutral |
Bullish |
|
200 DMA,
Nifty |
21841,
Above |
Neutral |
Bullish |
|
S & P
500 P/E |
28.52 |
Bearish |
Neutral |
|
Nifty P/E |
23.40 |
Neutral |
Bearish |
|
India Vix |
12.25, -17.39% |
Neutral |
Bullish |
|
Dollar/Rupee |
83.72, 0.00% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
7 |
7 |
|
|
Bearish
Indications |
9 |
9 |
|
|
Outlook |
Bearish |
Bearish |
|
|
Observation |
The
S&P fell and the Nifty was up last week. Indicators are bearish for the
week. Markets
are correcting from resistance. Watch those stops. |
||
|
On
the Horizon |
US – FOMC rate decision, employment data, Eurozone – CPI, German
GDP, UK – BOE rate decision, Japan - BOJ rate decision |
||
|
*Nifty |
India’s
Benchmark Stock Market Index |
||
|
Raw Data |
Data courtesy
stockcharts.com, investing.com, multpl.com, nseindia.com, tickertape.in |
||
|
**Neutral |
Changes
less than 0.5% are considered neutral |
The S&P 500 fell and the Nifty was up last week.
Indicators are bearish for the week. Markets are correcting
among developing divergences. We are transitioning from an inflationary
regime to a deflationary collapse. The markets are correcting from life
highs. The Nifty is also near new
highs and will likely underperform.
The past week saw US equity markets fall. Most emerging markets fell,
even as interest fell. Transports rose. The Baltic dry index fell. The dollar was
unchanged. Commodities fell. Valuations continue to be quite expensive, market
breadth rose, and the sentiment is now neutral. Fear (S&P 500) abated this
week, as a possible reality check from a FED Pivot loom.
After this rally, a currency crisis should resume and push risky
assets to new lows. Deflation is in the air despite the recent
inflationary spike and bonds are telegraphing just that. Feels like a
2008-style recession trade has begun, with a potential for a decline in risk
assets across the board. The current market is tracking closely the 2000
moves down in the S&P 500, implying a panic low right ahead in the
upcoming months (My views do not matter, kindly pay attention to the levels).
A dollar rebound from major support is a likely catalyst.
The S&P 500 is near all-time highs. We have bounced from recent
lows without capitulation. This suggests the lows may not be in and the
regime has changed from buying the dip to selling the rip. We may
get a final flush down soon. Risky assets should continue
breaking to the downside across the board, as earnings growth peaks.
The Fed has aggressively tightened into a recession. Deflationary
busts often begin after major inflationary scares. After correcting significantly, the market has made new highs, and more is left on the downside. The
Dollar, commodities, and bond yields continue to flash major warning
signs.
Global yield curves have inverted significantly reflecting a major upcoming recession. The
recent steepening of the yield curve, within an inverted context, with rates
falling, is a precursor to the next recession, and the riskiest assets will
underperform going forward under such conditions.
The critical levels to watch for the week are 5470 (up) and 5445
(down) on the S&P 500 and 24900 (up) and 24750 (down) on the Nifty. A significant breach of the above levels could trigger the next
big move in the above markets. High beta / P/E will get torched yet again
and will likely prove to be a sell on every rise. Gold is increasingly
looking like the asset class, (though overextended short-term) to own over the
next decade. (Gold exploded almost 8 times higher over the decade following the
dot-com bust in 2000, just imagine what would happen when this AI bubble
bursts? following the recent crypto bubble burst) You can check
out last week’s
report for a comparison. Love your
thoughts and feedback.
