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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 September 2019

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

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2962, -1.01%
Bearish
Bearish
Nifty
11512, 2.11%
Neutral **
Bullish
China Shanghai Index
2932, -2.47%
Bearish
Bearish
Gold
1503, -0.77%
Bearish
Bearish
WTIC Crude
56.17, -3.31%
Bearish
Bearish
Copper
2.60, -0.31%
Neutral
Neutral
Baltic Dry Index
1857, -12.86%
Bearish
Bearish
Euro
1.0940, -0.71%
Bearish
Bearish
Dollar/Yen
107.96, 0.36%
Neutral
Neutral
Dow Transports
10341, -1.08%
Bearish
Bearish
High Yield (Bond)
108.68, -0.40%
Neutral
Neutral
US 10 year Bond Yield
1.69%, -2.00%
Bullish
Bullish
Nyse Summation Index
735, -6.07%
Bearish
Neutral
US Vix
17.22, 12.40%
Bearish
Bearish
Skew
117
Neutral
Neutral
20 DMA, S and P 500
2980, Below
Bearish
Neutral
50 DMA, S and P 500
2949, Above
Bullish
Neutral
200 DMA, S and P 500
2833, Above
Bullish
Neutral
20 DMA, Nifty
11093, Above
Neutral
Bullish
50 DMA, Nifty
11113, Above
Neutral
Bullish
200 DMA, Nifty
11247, Above
Neutral
Bullish
India Vix
16.12, 4.64%
Neutral
Bearish
Dollar/Rupee
70.51, -0.80%
Neutral
Bullish


Overall


S & P 500


Nifty

Bullish Indications
3
6
Bearish Indications
10
9
Outlook
Bearish
Bearish
Observation
The S and P 500 fell and the Nifty rallied last week. Indicators are bearish for the week.
The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon
US – Employment data, UK – GDP, Eurozone – German employment data, CPI, India – RBI rate decision
*Nifty
India’s Benchmark Stock Market Index
Raw Data
Courtesy Stock charts, investing.com
**Neutral
Changes less than 0.5% are considered neutral


stock market signals september 30


The S and P 500 fell and the Nifty rallied last week. Indicators are bearish for the upcoming week. QE forever from the FED is about to trigger the deflationary collapse of the century and we have likely made another major top in global equity markets and are failing at resistance. The market has established a major top with non-conformations from the transports, other global indices and commodities and a massive drop in the S and P 500 looks imminent. The trend is about to change from bullish to bearish and the markets are about to get smashed by a strong dollar. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. 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. 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 2975 (up) and 2950 (down) on the S & P 500 and 11600 (up) and 11450 (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.



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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.