Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning March 26

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2588, -5.95%	Bearish	Bearish
Nifty	9998, -1.93%	Neutral **	Bearish
China Shanghai Index	3153, -3.58%	Bearish	Bearish
Gold	1350, 2.87%	Bullish	Bullish
WTIC Crude	65.88, 5.56%	Bullish	Bullish
Copper	2.99, -3.68%	Bearish	Bearish
Baltic Dry Index	1117, -2.87%	Bearish	Bearish
Euro	1.2357, 0.50%	Bullish	Bullish
Dollar/Yen	104.81, -1.15%	Bearish	Bearish
Dow Transports	10163, -4.87%	Bearish	Bearish
High Yield (ETF)	35.62, -0.97%	Bearish	Bearish
US 10 year Bond Yield	2.83%, -0.63%	Bullish	Bullish
Nyse Summation Index	129, -54.44%	Bearish	Neutral
US Vix	24.87, 57.41%	Bearish	Bearish
Skew	131	Neutral	Bearish
20 DMA, S and P 500	2724, Below	Bearish	Neutral
50 DMA, S and P 500	2742, Below	Bearish	Neutral
200 DMA, S and P 500	2585, Above	Bullish	Neutral
20 DMA, Nifty	10306, Below	Neutral	Bearish
50 DMA, Nifty	10549, Below	Neutral	Bearish
200 DMA, Nifty	10173, Below	Neutral	Bearish
India Vix	15.55, 2.14%	Neutral	Bearish
Dollar/Rupee	65.02, -0.10%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	5	4
Bearish Indications	11	14
Outlook	Bearish	Bearish
Observation	The S and P 500 and the Nifty fell last week. Indicators are bearish. The markets have made important tops. Time to watch those stops.
On the Horizon	China – PMI, Euro Zone – German employment data, UK – GDP, U.S – Consumer Confidence, Home sales, Oil inventories, GDP, Canada – GDP
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, investing.com
**Neutral	Changes less than 0.5% are considered neutral

The S and P 500 and the Nifty fell hard last week. Indicators are bearish for the upcoming week. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. The yen and other safe haven asset classes are flashing warning signs. Indian market volatility is still well below US market volatility so there is complacency and some catch up left on the down side. The critical levels to watch are 2600 (up) and 2575 (down) on the S & P and 10100 (up) and 9900 (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.

Stock Market Panic Just Beginning?

Markets have been taking a turn for the worse on fears of a global trade war. A look at the Fear and Greed Index computed by CNNMoney shows that investor sentiment is hitting record lows:

However the Vix is yet to take out the February highs and suggests that there is no major panic yet:

Also the NYSE McClellan Summation Index (courtesy stockcharts) has just begun breaking down again following the recent rally and has more room to fall suggesting more selling ahead:

Taken together we probably are headed for more selling and panic that should take us a lot lower to the major break out zone of the S and P 500 near 2400 first before any relief rallies occur.

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning March 19

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2752, -1.24%	Bearish	Bearish
Nifty	10195, -0.31%	Neutral **	Neutral
China Shanghai Index	3270, -1.13%	Bearish	Bearish
Gold	1312, -0.88%	Bearish	Bearish
WTIC Crude	62.41, 0.60%	Bullish	Bullish
Copper	3.11, -0.91%	Bearish	Bearish
Baltic Dry Index	1150, -4.25%	Bearish	Bearish
Euro	1.2296, -0.09%	Neutral	Neutral
Dollar/Yen	106.04, -0.69%	Bearish	Bearish
Dow Transports	10684, -0.52%	Bearish	Bearish
High Yield (ETF)	35.97, -0.33%	Neutral	Neutral
US 10 year Bond Yield	2.85%, -1.59%	Bullish	Bullish
Nyse Summation Index	283, 73.22%	Bullish	Neutral
US Vix	15.80, 7.92%	Bearish	Bearish
Skew	147	Bearish	Bearish
20 DMA, S and P 500	2735, Above	Bullish	Neutral
50 DMA, S and P 500	2749, Above	Bullish	Neutral
200 DMA, S and P 500	2579, Above	Bullish	Neutral
20 DMA, Nifty	10380, Below	Neutral	Bearish
50 DMA, Nifty	10594, Below	Neutral	Bearish
200 DMA, Nifty	10161, Above	Neutral	Bullish
India Vix	15.22, 4.78%	Neutral	Bearish
Dollar/Rupee	65.08, 0.23%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	6	3
Bearish Indications	9	12
Outlook	Bearish	Bearish
Observation	The S and P 500 and the Nifty fell last week. Indicators are bearish. The markets have made important tops. Time to watch those stops.
On the Horizon	Australia – RBA minutes, Employment data, New Zealand – RBNZ rate decision, Euro Zone – German ZEW economic sentiment, German PMI, German IFO business climate index, UK – CPI, Employment data, Retail sales, BOE rate decision, U.S – Home sales, Oil inventories, FOMC rate decision, Durable goods, Canada – CPI, Retail sales, Russia – Rate decision
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, investing.com
**Neutral	Changes less than 0.5% are considered neutral

Image from marketwatch.com

The S and P 500 and the Nifty fell last week. Indicators are bearish for the upcoming week. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Under performance in high yield and other risk assets are flashing warning signs. An interest rate shock can’t be ruled out. Indian market volatility is still below US market volatility so there is complacency and some catch up left on the down side. The critical levels to watch are 2765 (up) and 2740 (down) on the S & P and 10300 (up) and 10100 (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.