About

Ahead of the Curve provides 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 is a PhD and 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 include capital markets, banking, investment analysis, and portfolio management, and he has over 20 years of experience in the above areas, covering the US and Indian markets. He has several publications in the above areas. He currently teaches business and management students at CHRIST University. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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Time Series Analysis with GRETL

This video shows key time-series analyses techniques such as ARIMA, Granger Causality, Co-integration, and VECM performed via GRETL. Key dia...

Showing posts with label stock market cycles. Show all posts
Showing posts with label stock market cycles. Show all posts

Tuesday, 18 August 2015

Long and Short Stock Market Cycles Indicating a Major Market Top?

Aside from over valuation and technical break downs a major stock market top appears overdue in 2016 from the convergence of long term market cycles. Have a look at the long term 21 year stock market cycle (#stkmktcyl) that is scheduled to conclude in 2016 highlighted in silverdoctors.com:
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In addition shorter 7 year market cycles are also scheduled to resolve in 2016. The chart below from silverdoctors.com shows a broadening top #megaphone pattern in the S and P 500 with the S and P at the top of the pattern.With short and long market cycles both resolving in 2016, a topping process globally in risk assets is likely in the next few months with the S and P eventually migrating to the lower line of the pattern below the 650 mark:
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GMT-4   Event Actual Consensus
Monday, Jun 16
11:30 US 6-Month Bill Auction 4.155%
11:30 US 3-Month Bill Auction 4.24%
13:00 US 20-Year Bond Auction 4.942%
18:45 NZ Food Price Index (MoM) 0.5%
Tuesday, Jun 17
08:30 US Retail Sales (YoY)
08:30 US Retail Sales ex Autos (MoM) 0.1%
08:30 US Retail Sales Control Group
08:30 US Retail Sales (MoM) -0.7%
08:30 CA Canadian Portfolio Investment in Foreign Securities
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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.