Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning April 01

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2834, 1.20%	Bullish	Bullish
Nifty	11624, 1.46%	Neutral **	Bullish
China Shanghai Index	3091, -0.43%	Neutral	Neutral
Gold	1297, -1.17%	Bearish	Bearish
WTIC Crude	60.20, 1.96%	Bullish	Bullish
Copper	2.93, 3.39%	Bullish	Bullish
Baltic Dry Index	689, -0.14%	Neutral	Neutral
Euro	1.1218, -0.85%	Bearish	Bearish
Dollar/Yen	110.86, 0.69%	Bullish	Bullish
Dow Transports	10408, 3.54%	Bullish	Bullish
High Yield (ETF)	35.97, 0.73%	Bullish	Bullish
US 10 year Bond Yield	2.41%, -1.81%	Bullish	Bullish
Nyse Summation Index	875, -5.34%	Bearish	Neutral
US Vix	13.71, -16.81%	Bullish	Bullish
Skew	121	Neutral	Neutral
20 DMA, S and P 500	2804, Above	Bullish	Neutral
50 DMA, S and P 500	2756, Above	Bullish	Neutral
200 DMA, S and P 500	2756, Above	Bullish	Neutral
20 DMA, Nifty	11291, Above	Neutral	Bullish
50 DMA, Nifty	11013, Above	Neutral	Bullish
200 DMA, Nifty	10926, Above	Neutral	Bullish
India Vix	17.19, 5.59%	Neutral	Bearish
Dollar/Rupee	69.40 0.32%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	10	12
Bearish Indications	3	3
Outlook	Bullish	Bullish
Observation	The S and P 500 and the Nifty rallied last week. Indicators are bullish for the week. The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon	US – Employment data, Euro Zone –CPI, India – RBI 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

The S and P 500 and the Nifty rallied last week. Indicators are bullish for the upcoming week. QE forever from the FED is about to trigger the deflationary collapse of the century and we are making a major secondary top in global equity markets. The market got its oversold bounce of about 450 points but a 5 year bear market is in the making. The trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. The India vix has exceeded the US vix suggesting there may be a sudden catch up on the downside for the Indian market in 2019. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. We are on the verge of a multi-year great depression. 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. Tail risk has been very high off late as the yield curve inverts. The critical levels to watch for the week are 2845 (up) and 2820 (down) on the S & P 500 and 11700 (up) and 11500 (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.

Indicators that Matter

There is a plethora of indicators to track while evaluating financial markets. Here are some important ones:

1) The Chinese Yuan:

The Chinese Yuan is often a proxy for the risk on trade. Periods of strength in the Chinese Yuan as seen in the last 3 months, have often been accompanied by up moves  in risk assets such as stocks, commodities and emerging market currencies:

source:investing.com


2) The S and P 500 Price to Sales Ratio:

This is a key valuation measure and price to sales ratios greater than 2 have often symbolized over valuation while ratios lower than 1 have produced undervalued buy opportunities:

source: multpl.com



3) The Yield Curve:

The yield curve is a very reliable economic indicator and an inverted yield curve like we have now has often been followed by recessions or periods of rapidly slowing growth, while an upward sloping yield curve is often indicative of an expanding economy:

source: ETF Trends


4) CNN Money's Fear and Greed Indicator:

This is a sentiment indicator which is a combination of several sentiment indicators and indicates whether market participants are fearful or greedy:

source: CNN Money



5) The Skew Vix Ratio:

This indicator is another sentiment indicator and values below 5 tend to mark panic bottoms while values above 15 tend to mark complacent tops. This ratio has been making lower highs and lower tops of late suggesting that there may be one more panic bottom in the not too distant future:

source: Stock Charts

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning March 25

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2801, -0.77%	Bearish	Bearish
Nifty	11457, 0.26%	Neutral **	Neutral
China Shanghai Index	3104, 2.73%	Bullish	Bullish
Gold	1319, 1.21%	Bullish	Bullish
WTIC Crude	58.97, 0.77%	Bullish	Bullish
Copper	2.85, -1.93%	Bearish	Bearish
Baltic Dry Index	690, -5.48%	Bearish	Bearish
Euro	1.1315, -0.09%	Neutral	Neutral
Dollar/Yen	109.93, -1.47%	Bearish	Bearish
Dow Transports	10052, -2.50%	Bearish	Bearish
High Yield (ETF)	35.71, 0.14%	Neutral	Neutral
US 10 year Bond Yield	2.44%, -6.06%	Bullish	Bullish
Nyse Summation Index	924, -6.08%	Bearish	Neutral
US Vix	16.48, 27.95%	Bearish	Bearish
Skew	118	Neutral	Neutral
20 DMA, S and P 500	2799, Above	Bullish	Neutral
50 DMA, S and P 500	2734, Above	Bullish	Neutral
200 DMA, S and P 500	2755, Above	Bullish	Neutral
20 DMA, Nifty	11122, Above	Neutral	Bullish
50 DMA, Nifty	10946, Above	Neutral	Bullish
200 DMA, Nifty	10906, Above	Neutral	Bullish
India Vix	16.28, 2.58%	Neutral	Bearish
Dollar/Rupee	69.19 0.32%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	7	7
Bearish Indications	7	7
Outlook	Neutral	Neutral
Observation	The S and P 500 fell and the Nifty was unchanged last week. Indicators are neutral for the week. The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon	US – GDP, Euro Zone – German employment data, CPI, UK – 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 fell and the Nifty was unchanged last week. Indicators are neutral for the upcoming week. QE forever from the FED is about to trigger the deflationary collapse of the century and we are making a major secondary top in global equity markets. The market got its oversold bounce of about 450 points but a 5 year bear market is in the making. The trend is changing from bullish to bearish. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. The India vix has exceeded the US vix suggesting there may be a sudden catch up on the downside for the Indian market in 2019. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. We are on the verge of a multi-year great depression. 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. Tail risk has been very high off late as the yield curve inverts. The critical levels to watch for the week are 2810 (up) and 2790 (down) on the S & P 500 and 11550 (up) and 11350 (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.