|
Asset Class |
Weekly Level / Change |
Implication for S & P 500 |
Implication for Nifty* |
|
S & P
500 |
5305, 0.03% |
Neutral |
Neutral |
|
Nifty |
22957, 2.02% |
Neutral ** |
Bullish |
|
China
Shanghai Index |
3089, -2.07% |
Bearish |
Bearish |
|
Gold |
2335, -3.40% |
Bearish |
Bearish |
|
WTIC Crude |
77.80, -2.82% |
Bearish |
Bearish |
|
Copper |
4.76, -5.75% |
Bearish |
Bearish |
|
CRB Index |
294, 0.18% |
Neutral |
Neutral |
|
Baltic Dry
Index |
1797, -2.55% |
Bearish |
Bearish |
|
Euro |
1.0847, -0.21% |
Neutral |
Neutral |
|
Dollar/Yen |
157.01, 0.87% |
Bullish |
Bullish |
|
Dow Transports |
15083, -2.70% |
Bearish |
Neutral |
|
Corporate
Bonds (ETF) |
106.98, -0.20% |
Neutral |
Neutral |
|
High Yield
Bonds (ETF) |
94.28, -0.22% |
Neutral |
Neutral |
|
US 10-year
Bond Yield |
4.47%, 1.18% |
Bearish |
Bearish |
|
NYSE
Summation Index |
667, -5% |
Bearish |
Neutral |
|
US Vix |
11.93, -0.50% |
Bullish |
Bullish |
|
S & P
500 Skew |
156 |
Bearish |
Neutral |
|
CNN Fear
& Greed Index |
Neutral |
Neutral |
Neutral |
|
Nifty MMI
Index |
Fear |
Neutral |
Bullish |
|
20 DMA, S
& P 500 |
5212, Above |
Bullish |
Neutral |
|
50 DMA, S
& P 500 |
5173, Above |
Bullish |
Neutral |
|
200 DMA, S
& P 500 |
4758,
Above |
Bullish |
Neutral |
|
20 DMA,
Nifty |
22443, Above |
Neutral |
Bullish |
|
50 DMA,
Nifty |
22342, Above |
Neutral |
Bullish |
|
200 DMA,
Nifty |
20948,
Above |
Neutral |
Bullish |
|
S & P
500 P/E |
27.57 |
Bearish |
Neutral |
|
Nifty P/E |
21.88 |
Neutral |
Bearish |
|
India Vix |
21.71, 5.77% |
Neutral |
Bearish |
|
Dollar/Rupee |
83.06, -0.27% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
5 |
7 |
|
|
Bearish
Indications |
10 |
8 |
|
|
Outlook |
Bearish |
Bearish |
|
|
Observation |
The
S&P was unchanged and the Nifty rose last week. Indicators are bearish
for the week. Markets
are at resistance. Watch those stops. |
||
|
On
the Horizon |
US – GDP, Eurozone – German CPI, CPI |
||
|
*Nifty |
India’s
Benchmark Stock Market Index |
||
|
Raw Data |
Data courtesy
stockcharts.com, investing.com, multpl.com, nseindia.com, tickertape.in |
||
|
**Neutral |
Changes
less than 0.5% are considered neutral |
The S&P 500 was unchanged and the Nifty rose last
week. Indicators are bearish for the week. Markets are at
resistance near all-time highs. We are transitioning from an inflationary
regime to a deflationary collapse. The markets are hitting
resistance and risk-reward is poor at these levels. The Nifty is near
resistance and will likely underperform.
The past week saw US equity markets little changed. Most emerging
markets fell, as interest rates rose. Transports led down. The Baltic dry index
fell. The dollar was unchanged. Commodities were little changed, though copper,
gold, and oil fell. Valuations continue to be quite expensive, market breadth declined,
and the sentiment is now neutral. Fear (S&P 500) subsided this week, as a
possible reality check from a FED Pivot loom.
After this rally, a currency crisis should resume and push risky
assets to new lows across the board. Deflation is in the air despite the recent
inflationary spike and bonds are telegraphing just that. Feels like a
2008-style recession trade has begun, with a potential for a decline in risk
assets across the board. The current market is tracking closely the 2000
moves down in the S&P 500, implying a panic low right ahead in the
upcoming months (My views do not matter, kindly pay attention to the levels).
A dollar rebound from major support is a likely catalyst.
The S&P 500 is near all-time highs. We have bounced from recent
lows without capitulation. This suggests the lows may not be in and the
regime has changed from buying the dip to selling the rip. We may
get a final flush down soon. Risky assets should continue
breaking to the downside across the board, as earnings growth peaks.
The Fed has aggressively tightened into a recession. Deflationary
busts often begin after major inflationary scares. The market has rebounded
after correcting significantly, and more is left on the downside. The Dollar,
commodities, and bond yields are continuing to flash major warning signs.
Global yield curves have inverted significantly reflecting a major upcoming recession. The
recent steepening of the yield curve, within an inverted context, with rates
falling, is a precursor to the next recession, and the riskiest assets will
underperform going forward under such conditions.
The critical levels to watch for the week are 5315 (up) and 5290
(down) on the S&P 500 and 23050 (up) and 22900 (down) on the Nifty. A significant breach of the above levels could trigger the next
big move in the above markets. High beta / P/E will get torched yet again
and will likely prove to be a sell on every rise. Gold is increasingly
looking like the asset class, (though overextended short-term) to own over the
next decade. (Gold exploded almost 8 times higher over the decade following the
dot-com bust in 2000, just imagine what would happen when this AI bubble
bursts? following the recent crypto bubble burst) You can check
out last week’s
report for a comparison. Love your
thoughts and feedback.
