Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed. Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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Definition of a Recession: The textbook definition of a recession is two quarters of negative GDP growth. Some examples of recessions in...

Showing posts with label nasdaq. Show all posts
Showing posts with label nasdaq. Show all posts

Thursday, 16 August 2018

Why a Massive Selloff in Risk Assets Could be Just a Few Days Away?

First market breadth is diverging with the New 52 week high low indicator not confirming the recent retest of highs in the S and P 500:

S&P 500 vs S&P 500 Stocks at 52-Wk Highs Minus Lows (S&P 500 NH-NL)

High beta segment of the market such as the Nasdaq is beginning to under perform the broader market much like in 2000:

S&P 500 vs Nasdaq Relative to its 200-Day Moving Average (Nasdaq R200)

The Skew Vix ratio as shown on stockcharts has spiked into double digits recently suggesting high tail risk, which is often a precursor to rising volatility and a risk off trade set up:

skew vix ratio

All this as we are in the middle of an emerging market currency crisis much like in 1998 unsupported by a tightening FED:

Tuesday, 12 December 2017

Bitcoin 2017 Vs Home Builders 2008 Vs Nasdaq 2000

Most periods of excessive booms end with speculative busts. The dotcom bust of 2000 produced a recession so did the housing bust of 2008. Today's poster child seems to be bitcoin. Just as the internet was here to stay back in 2000 so is block chain technology today. However crypto currencies are trading at levels suggesting they could become reserve currencies of the world replacing the dollar and that implies a reset on short order. It's never different and always the same:
speculative bubbles

Wednesday, 28 October 2015

Interesting Market News and Views from Global Financial Markets-4

1) S&P 500 back in black for 2015, Nasdaq leaps 2.3% - USA TODAY

Tech stocks power the rally on strong earnings from Microsoft, Amazon.com, Alphabet."

2) Bear Market History: The 10 Biggest S&P 500 Pullbacks - Money Morning

There are multiple signs pointing to a bear market in 2015. That's why we've compiled a list of the 10 worst drops in bear market history."

3) What's Really Driving the Stock Market's Big Rebound Rally? - The Fiscal Times

A combination of solid earnings (especially in tech) — as well as a fresh interest rat"

4) The S&P 500 is up an impressive 0% this year - Business Insider

Stocks, emerging market FX, and oil are well off their lows."

5) Techs lead Wall St. higher; S&P 500 erases 2015 loss - Reuters

A tech share rally drove U.S. stocks up sharply for a second day on Friday as earnings from companies including Microsoft beat analysts' expectations, while healthcare shares rebounded from recent losses."

6) What If The US Is Japan And Deflation Is Fate? - Seeking Alpha

Make no mistake about it – while we can talk about daily market movement and the news du jour, the reality is we live in a very small sample. The biggest macro"

Tuesday, 20 January 2015

Bear Market Lessons from History

While the financial media tends to be absolutely infatuated with stocks hitting new highs every day, we would do well to pay attention to some ongoing bear markets, Charts are courtesy yahoo finance and marketwatch.com:
Hottest Deals On Refurbished Apple Products | JemJem
1) Japanese stocks continue to languish under the effects of deflation following a well over 26 year old bear market, down over 45% from the highs set in 1989.

2) Despite some great innovation out of the U.S from the likes of Apple, Google, Facebook e.t.c the #NASDAQ continues to remain in a 15 year bear market near its highs set in 2000.

3) Despite going parabolic yet again, Chinese stocks continue to remain in a 7 year bear market down well over 50% from the highs set in 2008.
SSE Composite Index (000001.SS)
4) US bank stocks are entering a 7 year bear market despite all the #QE money and super low interest rates down over 30% from their highs set in 2008.

5) The #Euro is also in a 7 year bear market down over 25% against the dollar from it's highs set in 2008.

6) #Gold and gold ETF's continue to be in bear markets down well over 35% from their highs set in 2008.

7) The more recent casualty #oil and oil ETF's are down well over 60% from their highs set in 2008.

It is well worth noting that it is no strange coincidence that there are major bear markets in several key asset classes and despite recent bear market rallies caused by the FED's QE for ever policies the hibernating bear is all set to emerge with a vengeance.

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My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.