|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3348,
1.52% |
Bullish |
Bullish |
|
Nifty |
11417,
3.32% |
Neutral
** |
Bullish |
|
China
Shanghai Index |
3218,
-0.04% |
Neutral |
Neutral |
|
Gold |
1904,
2.02% |
Bullish |
Bullish |
|
WTIC
Crude |
36.97,
-8.15% |
Bearish |
Bearish |
|
Copper |
2.98,
0.24% |
Neutral |
Neutral |
|
Baltic
Dry Index |
1869,
12.12% |
Bullish |
Bullish |
|
Euro |
1.1716,
0.74% |
Bullish |
Bullish |
|
Dollar/Yen |
105.30,
-0.28% |
Neutral |
Neutral |
|
Dow
Transports |
11297,
0.24% |
Neutral |
Neutral |
|
High
Yield (Bond ETF) |
104.10,
0.99% |
Bullish |
Bullish |
|
US
10 year Bond Yield |
0.70%,
7.04% |
Bearish |
Bearish |
|
NYSE
Summation Index |
30,
391.04% |
Bullish |
Neutral |
|
US
Vix |
27.63,
4.74% |
Bearish |
Bearish |
|
Skew |
119 |
Neutral |
Neutral |
|
20
DMA, S and P 500 |
3342,
Above |
Bullish |
Neutral |
|
50
DMA, S and P 500 |
3362,
Below |
Bearish |
Neutral |
|
200
DMA, S and P 500 |
3112,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
11315,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
11310,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
10745,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
28.78 |
Bearish |
Neutral |
|
Nifty
P/E |
33.18 |
Neutral |
Bearish |
|
India
Vix |
18.35,
-11.25% |
Neutral |
Bullish |
|
Dollar/Rupee |
73.30,
-0.51% |
Neutral |
Bullish |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
8 |
11 |
|
|
Bearish
Indications |
5 |
4 |
|
|
Outlook |
Bullish |
Bullish |
|
|
Observation |
The
S and P and the Nifty rallied last week. Indicators are bullish for the week. The
markets have begun a great depression style collapse. Watch those stops. |
||
|
On
the Horizon |
Japan – GDP, UK - GDP |
||
|
*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 and the Nifty rallied last week.
Indicators are bullish for the coming week. The moment of reckoning hass arrived. The recent selloff is finally
catching up to one of the worst earnings decline periods in
stock market history. With extremely high valuations amid a lot of
bearish divergences, a October crash is on the menu following the small dead
cat bounce from the 50dma, which is now resistance. Low volatility
suggests complacency and more downside ahead.
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 2030, 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 several 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 3360
(up) and 3335 (down) on the S & P 500 and 11500
(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.
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