Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 29

 

Asset Class	Weekly Level / Change	Implications for S&P 500	Implications for Nifty*
S&P 500	6644, -0.31%	Neutral	Neutral
Nifty	24655, -2.65%	Neutral **	Bearish
China Shanghai Index	3828, 0.21%	Neutral	Neutral
Gold	3809, 2.35%	Bullish	Bullish
WTIC Crude	65.72, 5.08%	Bullish	Bullish
Copper	4.75, 2.24%	Bullish	Bullish
CRB Index	305, 2.02%	Bullish	Bullish
Baltic Dry Index	2259, 2.54%	Bullish	Bullish
Euro	1.1702, -0.30%	Neutral	Neutral
Dollar/Yen	149.51, 0.95%	Bullish	Bullish
Dow Transports	15731, 0.77%	Bullish	Neutral
Corporate Bonds (ETF)	111.21, -0.47%	Neutral	Neutral
High-Yield Bonds (ETF)	97.85, -0.24%	Neutral	Neutral
US 10-year Bond Yield	4.19%, 1.16%	Bearish	Bearish
NYSE Summation Index	484, -22.00%	Bearish	Neutral
US Vix	15.29, -1.04%	Bullish	Neutral
S&P 500 Skew	142	Bearish	Neutral
CNN Fear & Greed Index	Neutral	Neutral	Neutral
Nifty MMI Index	Greed	Neutral	Bearish
20 DMA, S&P 500	6525, Above	Bullish	Neutral
50 DMA, S&P 500	6422, Above	Bullish	Neutral
200 DMA, S&P 500	6001, Above	Bullish	Neutral
20 DMA, Nifty	24969, Below	Neutral	Bearish
50 DMA, Nifty	24862, Below	Neutral	Bearish
200 DMA, Nifty	24167, Above	Neutral	Bullish
S&P 500 P/E	30.76	Bearish	Neutral
Nifty P/E	21.66	Neutral	Bearish
India Vix	11.43, 14.62%	Neutral	Bearish
Dollar/Rupee	88.67, 0.65%	Neutral	Bearish
Overall	S&P 500	Nifty
Bullish Indications	11	7
Bearish Indications	4	7
Outlook	Bullish	Bullish
Observation	The S&P and the Nifty fell last week. Indicators are bullish for the week. Markets are about to collapse. Watch those stops.
On the Horizon	US – Employment data, UK – GDP, Eurozone – 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 and the Nifty fell last week. Indicators are bullish for the week. Markets are topping and about to collapse. We are transitioning into a deflationary regime, and the risk of recession has increased significantly. The sentiment is neutral. Carry trade liquidation is about to resume, and the S&P will likely find resistance soon, as we enter bearish seasonality till the end of October. The macroenvironment was already deteriorating rapidly even before the recent tariff issue. The recent massive breakdown in transports (subsequent non-conformation for a possible second time) is quite ominous. Divergences galore. This, combined with oil's recent free fall, has profound recessionary implications. The Nifty has corrected significantly from its recent highs and is likely to underperform in the near future.

The past week saw US equity markets unchanged. Most emerging markets rose despite rising interest rates. Transports were up. The Baltic Dry Index rose. The dollar was unchanged. Commodities rose. Valuations are expensive, market breadth fell, and sentiment is neutral. Volatility (S&P 500) fell.

A currency crisis should resume at any moment and push risky assets to new lows. Deflation is in the air, and bonds are telegraphing just that despite intermittent spikes in yields. It 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 closely tracking the 2000 moves down in the S&P 500, implying a panic low is right ahead in the upcoming months. (My views do not matter; kindly pay attention to the levels.) A dollar rally is a likely catalyst.

The S&P 500 is correcting from recent 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 are likely to continue breaking to the downside as earnings growth falters. The Fed is now easing, anticipating a recession. Deflationary busts often begin after major inflationary scares. The Dollar is at major lows, while commodities and bond yields are flashing significant warning signs.

Global yield curves are steepening after having inverted a second time, reflecting the arrival of a significant economic slowdown. This is a precursor to the next recession, and the riskiest assets are likely to underperform in the future under such conditions. 

The critical levels to watch for the week are 6655 (up) and 6630 (down) on the S&P 500 and 24750 (up) and 24550 (down) on the Nifty. A significant breach of the above levels could trigger the next major move in these markets.  High beta/P/E will get torched again and is a sell on every rise. Gold increasingly looks like the asset class to own over the next decade. Gold exploded almost eight times higher over the decade following the dot-com bust in 2000. Imagine what would happen to gold as this AI bubble bursts. You can check out last week’s report for a comparison. I love your thoughts and feedback.

 

 

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 22

 

Asset Class	Weekly Level / Change	Implications for S&P 500	Implications for Nifty*
S&P 500	6664, 1.22%	Bullish	Bullish
Nifty	25327, 0.85%	Neutral **	Bullish
China Shanghai Index	3820, -1.30%	Bearish	Bearish
Gold	3706, 0.84%	Bullish	Bullish
WTIC Crude	62.68, -0.00%	Neutral	Neutral
Copper	4.63, -0.45%	Neutral	Neutral
CRB Index	299, -0.90%	Bearish	Bearish
Baltic Dry Index	2203, 3.62%	Bullish	Bullish
Euro	1.1746, 0.18%	Neutral	Neutral
Dollar/Yen	147.97, 0.20%	Neutral	Neutral
Dow Transports	15611, -0.11%	Neutral	Neutral
Corporate Bonds (ETF)	111.74, -0.24%	Neutral	Neutral
High-Yield Bonds (ETF)	98.09, 0.41%	Neutral	Neutral
US 10-year Bond Yield	4.14%, 1.95%	Bearish	Bearish
NYSE Summation Index	621, 1.00%	Bullish	Neutral
US Vix	15.45, 4.67%	Bearish	Neutral
S&P 500 Skew	147	Bearish	Neutral
CNN Fear & Greed Index	Greed	Bearish	Neutral
Nifty MMI Index	Extreme Greed	Neutral	Bearish
20 DMA, S&P 500	6525, Above	Bullish	Neutral
50 DMA, S&P 500	6422, Above	Bullish	Neutral
200 DMA, S&P 500	6001, Above	Bullish	Neutral
20 DMA, Nifty	24894, Above	Neutral	Bullish
50 DMA, Nifty	24883, Above	Neutral	Bullish
200 DMA, Nifty	24155, Above	Neutral	Bullish
S&P 500 P/E	30.85	Bearish	Neutral
Nifty P/E	22.25	Neutral	Bearish
India Vix	9.97, -1.53%	Neutral	Bullish
Dollar/Rupee	88.10, -0.20%	Neutral	Neutral
Overall	S&P 500	Nifty
Bullish Indications	7	8
Bearish Indications	7	5
Outlook	Neutral	Bullish
Observation	The S&P and the Nifty rose last week. Indicators are mixed for the week. Markets are about to collapse. Watch those stops.
On the Horizon	US – GDP
*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 and the Nifty rose last week. Indicators are mixed for the week. Markets are topping and about to collapse. We are transitioning into a deflationary regime, and recession risk has increased significantly. The sentiment is neutral. Carry trade liquidation is about to resume, and the S&P will likely find resistance soon, as we enter bearish seasonality till the end of October. The macro-environment was rapidly deteriorating even before the recent tariff issue. The recent massive breakdown in transports (subsequent non-conformation for a possible second time) is quite ominous. Divergences galore. This, combined with oil's recent free fall, has profound recessionary implications. The Nifty has corrected significantly from recent highs and will likely underperform going forward.

The past week saw US equity markets rise. Most emerging markets rose even as interest rates rose. Transports were unchanged. The Baltic Dry Index rose. The dollar was unchanged. Commodities fell. Valuations are expensive, market breadth rose, and the sentiment is greedy. Volatility (S&P 500) rose.

A currency crisis should resume at any moment and push risky assets to new lows. Deflation is in the air, and bonds are telegraphing just that despite intermittent spikes in yields. It 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 rally is a likely catalyst.

The S&P 500 is correcting from recent 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 as earnings growth falters. The Fed has aggressively tightened into a recession. Deflationary busts often begin after major inflationary scares. The Dollar is at major lows, while commodities and bond yields are flashing significant warning signs.

Global yield curves are steepening after having inverted a second time, reflecting the arrival of a significant economic slowdown. This 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 6675 (up) and 6650 (down) on the S&P 500 and 25400 (up) and 25250 (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 again and is a sell on every rise. Gold increasingly looks like the asset class to own over the next decade. Gold exploded almost eight times higher over the decade following the dot-com bust in 2000. Imagine what would happen to gold as this AI bubble bursts. You can check out last week’s report for a comparison. I love your thoughts and feedback.