|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3341,
-2.51% |
Bearish |
Bearish |
|
Nifty |
11465,
1.15% |
Neutral
** |
Bullish |
|
China
Shanghai Index |
3260,
-2.83% |
Bearish |
Bearish |
|
Gold |
1948,
0.39% |
Neutral |
Neutral |
|
WTIC
Crude |
37.38,
-3.54% |
Bearish |
Bearish |
|
Copper |
3.04,
-1.01% |
Bearish |
Bearish |
|
Baltic
Dry Index |
1269,
-6.83% |
Bearish |
Bearish |
|
Euro |
1.1847,
0.07% |
Neutral |
Neutral |
|
Dollar/Yen |
106.17,
-0.06% |
Neutral |
Neutral |
|
Dow
Transports |
11283,
0.51% |
Bullish |
Bullish |
|
High
Yield (Bond ETF) |
105.06,
0.00% |
Neutral |
Neutral |
|
US
10 year Bond Yield |
0.67%,
-7.25% |
Bullish |
Bullish |
|
NYSE
Summation Index |
342,
-37.21% |
Bearish |
Neutral |
|
US
Vix |
26.87,
-12.62% |
Bullish |
Bullish |
|
Skew |
125 |
Neutral |
Neutral |
|
20
DMA, S and P 500 |
3428,
Below |
Bearish |
Neutral |
|
50
DMA, S and P 500 |
3322,
Above |
Bullish |
Neutral |
|
200
DMA, S and P 500 |
3098,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
11427,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
11190,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
10795,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
28.72 |
Bearish |
Neutral |
|
Nifty
P/E |
32.86 |
Neutral |
Bearish |
|
India
Vix |
20.71,
-6.50% |
Neutral |
Bullish |
|
Dollar/Rupee |
73.44,
0.21% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
5 |
8 |
|
|
Bearish
Indications |
8 |
6 |
|
|
Outlook |
Bearish |
Bullish |
|
|
Observation |
The
S and P fell and the Nifty rallied last week. Indicators are mixed for the
week. The
markets have begun a great depression style collapse. Watch those stops. |
||
|
On
the Horizon |
Eurozone
– CPI, UK – Employment data, CPI,
BOE rate decision, US – FOMC rate
decision, Japan – BOJ rate
decision |
||
|
*Nifty |
India’s
Benchmark Stock Market Index |
||
|
Raw
Data |
Courtesy
Stock charts, investing.com, multpl.com, NSE |
||
|
**Neutral |
Changes
less than 0.5% are considered neutral |
The S and P 500 fell and the Nifty rallied last week. Indicators
are mixed for the coming week. The recent rally to the prior highs on the S and
P 500 is on borrowed time as we experience one of the worst earnings
decline periods in stock market history with extremely high
valuations amid a lot of bearish divergences and a September / October crash is
on the menu after a small dead cat bounce from the 50dma. We
rallied 46% right after the great depressions (1930’s) first collapse and we
have rallied over 50% in our most recent rally of the lows in a similar 6 month
period. After extreme euphoria for the indices, a highly probable selloff to
the 3000 area is emerging on the S and P, and 10000 should arrive on the Nifty
in short order. The FED is repeating the Japan experiment and the
lost 3 decades in Japan (1989-2019) is set to repeat across the globe. SPX 1500
and lower by year-end and we stay there till 2050, scary? The markets
are very close to an epic meltdown and the SPX is headed way lower.
The markets are overvalued, overbought and out of touch with economic
realities. Long term, the epic meltdown is set to continue
resulting in a 5 year plus bear market with lot lower levels may be as low as
800 on the S and P. QE forever from the FED is about to trigger the
deflationary collapse of the century and we have made a major top in global
equity markets. The market is looking like the short of a
lifetime with non-conformations from the transports, other global
indices, and commodities. High valuations continue. The breakdown in Crude and
the Euro is a precursor to yet another massive drop in the S and P 500. The
recent global virus epidemic (black swan) is likely to dent
global GDP significantly and usher in a depression much faster
than most think. The trend has changed from bullish to bearish and the markets
are getting smashed by a strong dollar. Looking for significant
underperformance in the Nifty going forward on rapidly deteriorating macros.
A 5-year deflationary wave has started in key asset classes
like the Euro, stocks, and commodities amidst a number of bearish divergences
and overstretched valuations. We are entering 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 of late as the yield curve inverts
into a recession. The critical levels to watch for the week are 3350
(up) and 3330 (down) on the S & P 500 and 11550
(up) and 11400 (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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