|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3709,
1.25% |
Bullish |
Bullish |
|
Nifty |
13761,
1.83% |
Neutral
** |
Bullish |
|
China
Shanghai Index |
3395,
1.43% |
Bullish |
Bullish |
|
Gold |
1887,
2.35% |
Bullish |
Bullish |
|
WTIC
Crude |
49.06,
5.35% |
Bullish |
Bullish |
|
Copper |
3.64,
3.23% |
Bullish |
Bullish |
|
Baltic
Dry Index |
1325,
9.41% |
Bullish |
Bullish |
|
Euro |
1.2257,
1.21% |
Bullish |
Bullish |
|
Dollar/Yen |
103.31,
-0.67% |
Bearish |
Bearish |
|
Dow
Transports |
12566,
-0.84% |
Bearish |
Bearish |
|
High
Yield (Bond ETF) |
108.10,
0.04% |
Neutral |
Neutral |
|
US
10 year Bond Yield |
0.95%,
3.88% |
Bearish |
Bearish |
|
NYSE
Summation Index |
1071,
0.31% |
Neutral |
Neutral |
|
US
Vix |
21.57,
-7.46% |
Bullish |
Bullish |
|
Skew |
147 |
Bearish |
Bearish |
|
20
DMA, S and P 500 |
3662,
Above |
Bullish |
Neutral |
|
50
DMA, S and P 500 |
3548,
Above |
Bullish |
Neutral |
|
200
DMA, S and P 500 |
3190,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
13293,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
12575,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
10856,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
37.38 |
Bearish |
Neutral |
|
Nifty
P/E |
37.84 |
Neutral |
Bearish |
|
India
Vix |
18.62,
-0.89% |
Neutral |
Bullish |
|
Dollar/Rupee |
73.58,
-0.22% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
11 |
13 |
|
|
Bearish
Indications |
5 |
5 |
|
|
Outlook |
Bullish |
Bullish |
|
|
Observation |
The
S and P and the Nifty made new highs last week. Indicators are bullish for
the week. The
markets have begun a great depression style
collapse. Watch those stops. |
||
|
On
the Horizon |
UK – GDP, US - GDP, China – PBoC 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 and the Nifty made new
highs last week. Indicators are bullish for the week. The epic crash signal is alive
and well with retail, hedge funds, and speculators all in, despite the recent massive
rally suggesting a major top is imminent. The moment of reckoning is very near. Technicals are about to track fundamentals and
turn bearish. The market is yet to price in one of the worst earnings
decline periods in stock market history. With extremely high
valuations, a crash is on the menu following the recent bounce from the 50dma. 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 65% 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 the next few months. 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 in a year 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 as we make a major top in
global equity markets. The market is looking like the short
of a lifetime with topping action in the transports, other global
indices, and commodities. High valuations continue..
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 is about to change from bullish to bearish
and the markets are about to get smashed by a rebounding 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 3725 (up) and 3700 (down) on the S & P 500 and 13850 (up) and 13700 (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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