Long and Short Stock Market Cycles Indicating a Major Market Top?

Aside from over valuation and technical break downs a major stock market top appears overdue in 2016 from the convergence of long term market cycles. Have a look at the long term 21 year stock market cycle (#stkmktcyl) that is scheduled to conclude in 2016 highlighted in silverdoctors.com:

In addition shorter 7 year market cycles are also scheduled to resolve in 2016. The chart below from silverdoctors.com shows a broadening top #megaphone pattern in the S and P 500 with the S and P at the top of the pattern.With short and long market cycles both resolving in 2016, a topping process globally in risk assets is likely in the next few months with the S and P eventually migrating to the lower line of the pattern below the 650 mark:

Long and short stock market cycles indicating a major market top from Rajveer Rawlin

Market cycles indicating major top in? http://t.co/NqNf6NXrTf pic.twitter.com/Ca9EVuOtRE

— samuelR (@RajveerRawlin) September 6, 2015

Market Signals for the US S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning August 17

Indicator	Weekly Level / Change / Significance	Implication for S & P 500	Implication for Nifty*
S & P 500	2092, 0.67%	Bullish	Bullish
Nifty	8519, -0.54%	Neutral**	Bearish
China Shanghai Index	3965, 5.91%	Bullish	Bullish
Gold	1113, 1.82%	Bullish	Bullish
WTIC Crude	42.74, -2.31%	Bearish	Bearish
Copper	2.34, 0.75%	Bullish	Bullish
Baltic Dry Index	1055, -12.08%	Bearish	Bearish
Euro	1.1097, 1.13%	Bullish	Bullish
Dollar/Yen	124.32, 0.09%	Neutral	Neutral
Dow Transports	8319, 0.82%	Bullish	Bullish
US 10 year Bond Yield	2.20%, 0.97%	Bearish	Bearish
Nyse Summation Index	-298, 11.96%	Bullish	Neutral
US Vix	12.83, -4.18%	Bullish	Bullish
20 DMA, S and P 500	2096, Below	Bearish	Neutral
50 DMA, S and P 500	2095, Below	Bearish	Neutral
200 DMA, S and P 500	2077, Above	Bullish	Neutral
20 DMA, Nifty	8495, Above	Neutral	Bullish
50 DMA, Nifty	8386, Above	Neutral	Bullish
200 DMA, Nifty	8449, Above	Neutral	Bullish
India Vix	16.02, 7.44%	Neutral	Bearish
Dollar/Rupee	65.12, 2.22%	Neutral	Bearish
Overall	S & P 500	Nifty
Bullish Indications	9	10
Bearish Indications	5	6
Outlook	Bullish	Bullish
Observation	The Sand P 500 was up last week while the Nifty under performed. Indicators are bullish. The Vix is indicating complacency.  Once again I will look for topping action in the Nifty and the S and P 500 in the upcoming bounce.
On the Horizon	Japan GDP, US, UK and Canada CPI, US FOMC Minutes, US PMI
*Nifty	India’s Benchmark Stock Index
Raw Data	Courtesy Google finance, Stock charts, Dailyfx
**Neutral	Changes less than 0.5% are considered neutral

Signals are bullish for the upcoming week. I will look for some topping action in the Nifty and the S and P 500 in the upcoming bounce. You can check out last weeks report for a comparison. You can also check out snapshots of the S and P 500 and Nifty Indices.

Interesting Perspective on the Chinese Yuan Devaluation

While the Chinese Yuan devaluation has taken the global markets by storm this week, it certainly is not the first of its kind and pales in comparison to the 50% devaluation in the Yuan in 1994. A very interesting chart from dailyfx below provides insight into the fluctuations in the Yuan.

It also appears that the #Yuan is yet to catch up with the deteriorating macro economic back drop in China as per the next chart from dailyfx and the current devaluation may not help matters in the long term.


Regardless the contagion effect on the  #BRIC and other emerging economies can't be ignored as the threat of cheap Chinese exports flooding the market place is alive and well in the near term. The mere prospect of this has sent some BRIC currencies and stock markets sharply lower and this is likely to continue in the short term:

Interesting Perspective on the Yuan Devaluation http://t.co/TaHaJQo43u pic.twitter.com/SWDO52FyeD

— samuelR (@RajveerRawlin) September 7, 2015