India Budget 2021 - Analysis

Some expert post-budget analysis from Dr. Charan Singh, Chief Executive, EGROW Foundation, and an eminent panel:

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning February 15

 

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3935, 1.23%	Bullish	Bullish
Nifty	15163, 1.60%	Neutral **	Bullish
China Shanghai Index	3655, 4.54%	Bullish	Bullish
Gold	1825, 0.64%	Bullish	Bullish
WTIC Crude	59.72, 5.05%	Bullish	Bullish
Copper	3.80, 4.78%	Bullish	Bullish
Baltic Dry Index	1335, 0.45%	Neutral	Neutral
Euro	1.2120, 0.65%	Bullish	Bullish
Dollar/Yen	104.92, -0.42%	Neutral	Neutral
Dow Transports	13175, 3.02%	Bullish	Bullish
High Yield (Bond ETF)	109.65, 0.36%	Neutral	Neutral
US 10 year Bond Yield	1.21%, 3.08%	Bearish	Bearish
NYSE Summation Index	915, 22.21%	Bullish	Neutral
US Vix	19.97, -4.31%	Bullish	Bullish
Skew	138	Neutral	Neutral
20 DMA, S and P 500	3842, Above	Bullish	Neutral
50 DMA, S and P 500	3770, Above	Bullish	Neutral
200 DMA, S and P 500	3402, Above	Bullish	Neutral
20 DMA, Nifty	14585, Above	Neutral	Bullish
50 DMA, Nifty	14136, Above	Neutral	Bullish
200 DMA, Nifty	11823, Above	Neutral	Bullish
S & P 500 P/E	40.06	Bearish	Neutral
Nifty P/E	41.58	Neutral	Bearish
India Vix	22.04, -5.86%	Neutral	Bullish
Dollar/Rupee	72.60, -0.30%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	12	13
Bearish Indications	2	2
Outlook	Bullish	Bullish
Observation	The S and P and the Nifty rallied last week. Indicators are bullish for the week. The markets are about to begin a great depression style collapse. Watch those stops.
On the Horizon	Japan – GDP, UK – CPI
*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 and the Nifty made new highs last week. Indicators are bullish for the week. The epic crash signal is alive and well with retail, hedge funds, and speculators all in, despite the recent melt-up and break out of the long term broadening top, suggesting a major top is imminent. The moment of reckoning is very near.  Technicals are about to track fundamentals and turn bearish. The market is yet to price in one of the worst earnings decline periods in stock market history. With extremely high valuations, a crash is on the menu. 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 65% 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 the next few months. The FED is repeating the Japan experiment and the 3 lost decades in Japan (1989-2019) is set to repeat across the globe. SPX 1500 and lower in a year and we stay there till 2030, 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 as we make a major top in global equity markets. The market is looking like the short of a lifetime with topping action in the transports, other global indices, and commodities. High valuations continue.

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 is about to change from bullish to bearish and the markets are about to get smashed by a rebounding 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 interest rates plunge into a recession. The critical levels to watch for the week are 3950 (up) and 3920 (down) on the S & P 500 and 15250 (up) and 15100 (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.

 

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning February 08

 

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3887, 4.65%	Bullish	Bullish
Nifty	14924, 9.46%	Neutral **	Bullish
China Shanghai Index	3496, 0.38%	Neutral	Neutral
Gold	1815, -1.90%	Bearish	Bearish
WTIC Crude	57.08, 9.35%	Bullish	Bullish
Copper	3.64, 2.36%	Bullish	Bullish
Baltic Dry Index	1333, -8.20%	Bearish	Bearish
Euro	1.2049, -0.72%	Bearish	Bearish
Dollar/Yen	105.42, 0.71%	Bullish	Bullish
Dow Transports	12789, 5.80%	Bullish	Bullish
High Yield (Bond ETF)	109.26, 0.79%	Bullish	Bullish
US 10 year Bond Yield	1.17%, 9.19%	Bearish	Bearish
NYSE Summation Index	748, 4.72%	Bullish	Neutral
US Vix	20.87, -36.93%	Bullish	Bullish
Skew	135	Neutral	Neutral
20 DMA, S and P 500	3815, Above	Bullish	Neutral
50 DMA, S and P 500	3742, Above	Bullish	Neutral
200 DMA, S and P 500	3376, Above	Bullish	Neutral
20 DMA, Nifty	14430, Above	Neutral	Bullish
50 DMA, Nifty	13923, Above	Neutral	Bullish
200 DMA, Nifty	11679, Above	Neutral	Bullish
S & P 500 P/E	39.57	Bearish	Neutral
Nifty P/E	41.46	Neutral	Bearish
India Vix	23.42, -7.61%	Neutral	Bullish
Dollar/Rupee	72.82, -0.09%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	10	11
Bearish Indications	5	5
Outlook	Bullish	Bullish
Observation	The S and P and the Nifty rallied last week. Indicators are bullish for the week. The markets are about to begin a great depression style collapse. Watch those stops.
On the Horizon	UK – GDP, US – CPI
*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 and the Nifty made new highs last week. Indicators are  bullish for the week. The epic crash signal is alive and well with retail, hedge funds, and speculators all in, despite the recent melt up and break out of the long term broadening top, suggesting a major top is imminent. The moment of reckoning is very near.  Technicals are about to track fundamentals and turn bearish. The market is yet to price in one of the worst earnings decline periods in stock market history. With extremely high valuations, a crash is on the menu. 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 65% 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 the next few months. 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 in a year and we stay there till 2030, 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 as we make a major top in global equity markets. The market is looking like the short of a lifetime with topping action in the transports, other global indices, and commodities. High valuations continue.

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 is about to change from bullish to bearish and the markets are about to get smashed by a rebounding 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 interest rates plunge into a recession. The critical levels to watch for the week are 3900 (up) and 3875 (down) on the S & P 500 and 15000 (up) and 14850 (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.