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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 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 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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Sunday 29 May 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 30

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2099, 2.28%
Bullish
Bullish
Nifty
8157, 5.25%
Neutral**
Bullish
China Shanghai Index
2821, -0.16%
Neutral
Neutral
Gold
1215,-3.00%
Bearish
Bearish
WTIC Crude
49.56, 2.23%
Bullish
Bullish
Copper
2.11, 2.65%
Bullish
Bullish
Baltic Dry Index
606, -3.04%
Bearish
Bearish
Euro
1.119, -0.25%
Neutral
Neutral
Dollar/Yen
110.34, 0.18%
Neutral
Neutral
Dow Transports
7772, 1.31%
Bullish
Bullish
High Yield (ETF)
35.27, 0.80%
Bullish
Bullish
US 10 year Bond Yield
1.85%, 0.11%
Neutral
Neutral
Nyse Summation Index
732, 1.16%
Bullish
Neutral
US Vix
13.12, -13.68%
Bullish
Bullish
20 DMA, S and P 500
2064, Above
Bullish
Neutral
50 DMA, S and P 500
2066, Above
Bullish
Neutral
200 DMA, S and P 500
2011, Above
Bullish
Neutral
20 DMA, Nifty
7842, Above
Neutral
Bullish
50 DMA, Nifty
7769, Above
Neutral
Bullish
200 DMA, Nifty
7786, Above
Neutral
Bullish
India Vix
15.26, -7.09%
Neutral
Bullish
Dollar/Rupee
67.03, -0.60%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
10

12
Bearish Indications
2
2
Outlook
Bullish
Bullish
Observation
The Sand P 500 and the Nifty rallied strong last week. Indicators are bullish.
Markets are challenging resistance again. Time to tighten those stops.
On the Horizon
China –PMI, Australia – GDP, Euro Zone –German CPI, Employment data, Euro zone CPI, ECB rate decision,
Switzerland – GDP,  U.S – ISM, Personal consumption expenditure, Consumer confidence, Employment data, Canada – GDP
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Google finance, Stock charts, FXCM
**Neutral
Changes less than 0.5% are considered neutral

 The Sand P 500 and the Nifty rallied big last week. Signals are bullish for the upcoming week. The Vix is suggesting complacency. The markets are back at resistance and are likely to continue major breakdowns in 2016 after this rally concludes. The critical levels to watch are 2110 (up) and 2080 (down) on the S & P and 8200 (up) and 8100 (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. You can also check out support and resistance levels of the S and P 500 and Nifty Indices. Love your thoughts and feedback.

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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.