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.

Featured post

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...

Saturday, 30 May 2015

Stock Market Signals for the US and Indian Stock Markets for the Upcoming Week beginning June 1

Indicator
Weekly Level / Change / Significance
Implication for
S & P 500
Implication for Nifty*
S & P 500
2107, -0.88%
Bearish
Bearish
Nifty
8434, -0.30%
Neutral**
Neutral
China Shanghai Index
4612, -0.99%
Bearish
Bearish
Gold
1191, -1.24%
Bearish
Bearish
WTIC Crude
60.23, 0.40%
Neutral
Neutral
Copper
2.73, -2.04%
Bearish
Bearish
Baltic Dry Index
589, 0.51%
Bullish
Bullish
Euro
1.099, -0.231%
Neutral
Neutral
Dollar/Yen
124.13, 2.08%
Bullish
Bullish
Dow Transports
8300, -2.15%
Bearish
Bearish
US 10 year Bond Yield
2.10%, -5.42%
Bullish
Bullish
Nyse Summation Index
175, -36.21%
Bearish
Bearish
US Vix
13.84, 14.10%
Bearish
Bearish
20 DMA, S and P 500
2112, Below
Bearish
Neutral
50 DMA, S and P 500
2099, Above
Bullish
Neutral
200 DMA, S and P 500
2042, Above
Bullish
Neutral
20 DMA, Nifty
8301, Above
Neutral
Bullish
50 DMA, Nifty
8438, Below
Neutral
Bearish
200 DMA, Nifty
8324, Above
Neutral
Bullish
India Vix
16.66, -1.71%
Neutral
Bullish
Dollar/Rupee
63.74, 0.40%
Neutral
Neutral




Overall
 S & P 500
Nifty

Bullish Indications
5
6

Bearish Indications
8
8

Outlook
Bearish
Marginally Bearish

Observation
The Sand P 500 is putting in a short term top while the Nifty outperformed last week. The summation index and transports are implying deteriorating market internals. The Vix is also indicating a topping process in the market.


On the Horizon
Greece, PMI’s from US and UK, Australia (RBA), India (RBI), ECB and UK rate decisions, US and Canada employment data.






*Nifty
India’s Benchmark Stock Index


Raw Data
Courtesy Google finance, Stock charts


**Neutral
Changes less than 0.5% are considered neutral


You can check out last weeks report for a comparison.

Saturday, 23 May 2015

Stock Market Signals for the US and Indian Stock Markets for the Upcoming Week beginning May 25

Indicator
Weekly Level / Change / Significance
Implication for
S & P 500
Implication for Nifty*
S & P 500
2126, 0.16%
Neutral**
Neutral
Nifty
8459, 2.38%
Neutral
Bullish
China Shanghai Index
4658, 8.10%
Bullish
Bullish
Gold
1205, -1.44%
Bearish
Bearish
WTIC Crude
59.99, 0.03%
Neutral
Neutral
Copper
2.79, -4.68%
Bearish
Bearish
Baltic Dry Index
592, -6.62%
Bearish
Bearish
Euro
1.101, -3.91%
Bearish
Bearish
Dollar/Yen
121.53, 1.82%
Bullish
Bullish
Dow Transports
8482, -2.29%
Bearish
Bearish
US 10 year Bond Yield
2.22%, 3.46%
Bearish
Bearish
Nyse Summation Index
274, 7.93%
Bullish
Bullish
US Vix
12.13, -2.02%
Bullish
Bullish
20 DMA, S and P 500
2110, Above
Bullish
Neutral
50 DMA, S and P 500
2096, Above
Bullish
Neutral
200 DMA, S and P 500
2038, Above
Bullish
Neutral
20 DMA, Nifty
8272, Above
Neutral
Bullish
50 DMA, Nifty
8471, Below
Neutral
Bearish
200 DMA, Nifty
8309, Above
Neutral
Bullish
India Vix
16.95, -14.47%
Neutral
Bullish
Dollar/Rupee
63.49, 0.08%
Neutral
Neutral




Overall
 S & P 500
Nifty

Bullish Indications
7
8

Bearish Indications
6
7

Outlook
Marginally Bullish
Marginally Bullish

Observation
The Sand P 500 is at the top of its trading range close to all time highs while the Nifty outperformed last week. The 10 yr bond yields and transports are flashing warning signs. The Vix may be suggesting complacency.


On the Horizon
Greece, EU consumer confidence, Canadian CB Rate Decision, UK, US and Canadian GDP Estimates






*Nifty
India’s Benchmark Stock Index


Raw Data
Courtesy Google finance, Stock charts


**Neutral
Changes less than 0.5% are considered neutral








I have added a new indicator this week, the US 10 year bond yield.  You can check out last weeks report for a comparison.

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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.