|
Indicator |
Weekly Level /
Change |
Implication for S & P 500 |
Implication for
Nifty* |
|
S & P 500 |
4180, -0.13% |
Neutral |
Neutral |
|
Nifty |
14341, -1.89% |
Neutral ** |
Bearish |
|
China Shanghai Index |
3474, 1.39% |
Bullish |
Bullish |
|
Gold |
1777, -0.13% |
Neutral |
Neutral |
|
WTIC Crude |
62.05, -1.71% |
Bearish |
Bearish |
|
Copper |
4.34, 4.15% |
Bullish |
Bullish |
|
Baltic Dry Index |
2788, 16.90% |
Bullish |
Bullish |
|
Euro |
1.2100, 0.98% |
Bullish |
Bullish |
|
Dollar/Yen |
107.88, -0.82% |
Bearish |
Bearish |
|
Dow Transports |
15133, 1.43% |
Bullish |
Bullish |
|
High Yield (Bond ETF) |
109.12, 0.11% |
Neutral |
Neutral |
|
US 10 year Bond Yield |
1.56%, -1.18% |
Bullish |
Bullish |
|
NYSE Summation Index |
687, -4.44% |
Bearish |
Neutral |
|
US Vix |
17.33, 6.65% |
Bearish |
Bearish |
|
Skew |
140 |
Bearish |
Bearish |
|
20 DMA, S and P 500 |
4095, Above |
Bullish |
Neutral |
|
50 DMA, S and P 500 |
3976, Above |
Bullish |
Neutral |
|
200 DMA, S and P 500 |
3630, Above |
Bullish |
Neutral |
|
20 DMA, Nifty |
14593, Below |
Neutral |
Bearish |
|
50 DMA, Nifty |
14825, Below |
Neutral |
Bearish |
|
200 DMA, Nifty |
12958, Above |
Neutral |
Bullish |
|
S & P 500 P/E |
42.56 |
Bearish |
Neutral |
|
Nifty P/E |
32.07 |
Neutral |
Bearish |
|
India Vix |
22.69, 11.21% |
Neutral |
Bearish |
|
Dollar/Rupee |
74.93, 0.54% |
Neutral |
Bearish |
|
Overall |
S & P 500 |
Nifty |
|
|
Bullish Indications |
9 |
7 |
|
|
Bearish Indications |
6 |
10 |
|
|
Outlook |
Bullish |
Bearish |
|
|
Observation |
The S and P was
unchanged and the Nifty fell last week. Indicators are mixed for the week. The markets are about
to begin a great depression style collapse. Watch those stops. |
||
|
On the Horizon |
US – FOMC rate decision, Eurozone
– German GDP, German Employment data, CPI, 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 & P was little changed and the Nifty fell last week. Indicators are mixed for the week. The market is on the
verge of an epic correction. Deflationary busts begin after inflation scares
(the market is calling the Fed’s bluff) and gold is telegraphing just
that. Corporate bonds are flashing early warning signs.
The epic crash signal is alive and well with retail, hedge funds, and
speculators all in, despite the recent melt-up and break out of the long-term
broadening top, 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. Extremely low volatility suggests complacency and downside ahead.
We
rallied 46% right after the great depressions (1930’s) first collapse and we
have rallied over 80% in our most recent rally of the lows in the last 12 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 3
lost 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) has dented global GDP significantly
and will 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 interest
rates are about to plunge yet again reflecting a major recession. The critical
levels to watch for the week are 4190 (up) and 4170
(down) on the S & P 500 and 14400 (up) and 14250
(down) on the Nifty. A significant breach of the above
levels could trigger the next big move in the above markets. The Nifty, Shanghai composite, gold,
and bonds are on Ichimoku daily sell signals while
the Dollar and S & P 500 are on Ichimoku daily buy
signals so some things got to give. High beta / P/E is about to
get torched soon (despite the bullish consensus emerging). Gold will likely prove to be the best asset class in the next 5 years. You can check out lastweek’s report for a comparison. Love your thoughts and feedback.
