|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
4181,
0.02% |
Neutral |
Neutral |
|
Nifty |
14631,
2.02% |
Neutral
** |
Bullish |
|
China
Shanghai Index |
3447,
-0.79% |
Bearish |
Bearish |
|
Gold |
1769,
-0.47% |
Neutral |
Neutral |
|
WTIC
Crude |
63.48,
2.16% |
Bullish |
Bullish |
|
Copper |
4.46,
2.66% |
Bullish |
Bullish |
|
Baltic
Dry Index |
3053,
9.51% |
Bullish |
Bullish |
|
Euro |
1.2020,
-0.65% |
Bearish |
Bearish |
|
Dollar/Yen |
109.29,
1.27% |
Bullish |
Bullish |
|
Dow
Transports |
15347,
1.41% |
Bullish |
Bullish |
|
High
Yield (Bond ETF) |
109.21,
0.08% |
Neutral |
Neutral |
|
US
10 year Bond Yield |
1.63%,
4.03% |
Bearish |
Bearish |
|
NYSE
Summation Index |
739,
7.59% |
Bullish |
Neutral |
|
US
Vix |
18.61,
7.39% |
Bearish |
Bearish |
|
Skew |
146 |
Bearish |
Bearish |
|
20
DMA, S & P 500 |
4147,
Above |
Bullish |
Neutral |
|
50
DMA, S & P 500 |
4003,
Above |
Bullish |
Neutral |
|
200
DMA, S & P 500 |
3655,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
14618,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
14783,
Below |
Neutral |
Bearish |
|
200
DMA, Nifty |
13057,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
42.57 |
Bearish |
Neutral |
|
Nifty
P/E |
32.21 |
Neutral |
Bearish |
|
India
Vix |
23.03,
1.49% |
Neutral |
Bearish |
|
Dollar/Rupee |
74.06,
-1.15% |
Neutral |
Bullish |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
9 |
9 |
|
|
Bearish
Indications |
6 |
8 |
|
|
Outlook |
Bullish |
Bullish |
|
|
Observation |
The
S and P was unchanged and the Nifty rallied last week. Indicators are bullish
for the week. The
markets are about to begin a great depression style collapse.
Watch those stops. |
||
|
On
the Horizon |
US – Employment data, UK – BOE 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 500 was little changed
and the Nifty rallied last week. Indicators are bullish
for the week. Earnings growth has been very good but it is in the price.The
market is on the verge of an epic correction. Deflationary busts often begin after
inflationary 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 4195 (up) and 4170
(down) on the S & P 500 and 14700 (up) and 14550
(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, dollar,
and bonds are on Ichimoku daily sell signals while gold
and the 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 the next 5
years. You can check out lastweek’s report for a comparison. Love your thoughts and feedback.
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