Chart of the Week - Real Gross Domestic Income

The chart of the week is courtesy Mike Shedlock via SafeHaven and looks at real Gross Domestic Income (GDI) in the US. Every time GDI has turned negative we have had pretty significant slowdowns or recessions. The GDI has just entered negative territory indicating another major slowdown is just around the corner:

Daily Forex Insight

Here are some insights from the currency strategists at dailyfx. They cover the fundamentals and technicals of key Forex pairs and other key markets along with some of the key economic news of the day. Today's commentary looks at the  S & P 500 post the payroll data out of the U.S:

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning October 10

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2154, -0.67%	Bearish	Bearish
Nifty	8698, 1.00%	Neutral**	Bullish
China Shanghai Index	3005, 0.00%	Neutral	Neutral
Gold	1252, -4.95%	Bearish	Bearish
WTIC Crude	49.81, 3.25%	Bullish	Bullish
Copper	2.16, -2.13%	Bearish	Bearish
Baltic Dry Index	921, 5.26%	Bullish	Bullish
Euro	1.120, -0.36%	Neutral	Neutral
Dollar/Yen	102.92, 1.58%	Bullish	Bullish
Dow Transports	8057, -0.27%	Neutral	Neutral
High Yield (ETF)	36.68, 0.40%	Neutral	Neutral
US 10 year Bond Yield	1.74%, 7.96%	Bearish	Bearish
Nyse Summation Index	437, -21.83%	Bearish	Neutral
US Vix	13.48, 1.43%	Bearish	Bearish
20 DMA, S and P 500	2153, Above	Bullish	Neutral
50 DMA, S and P 500	2167, Below	Bearish	Neutral
200 DMA, S and P 500	2067, Above	Bullish	Neutral
20 DMA, Nifty	8746, Below	Neutral	Bearish
50 DMA, Nifty	8707, Below	Neutral	Bearish
200 DMA, Nifty	8023, Above	Neutral	Bullish
India Vix	14.48, -15.69%	Neutral	Bullish
Dollar/Rupee	66.61, 0.07%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	5	5
Bearish Indications	7	7
Outlook	Bearish	Bearish
Observation	The S and P 500 fell and the Nifty bounced back last week. Indicators are bearish. Markets are failing at resistance again. Time to tighten those stops.
On the Horizon	China – Loan & financing Data, CPI, Euro zone – ZEW survey, U.S – Retail sales, U. Mich. consumer confidence, FED Speak
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, dailyfx.com
**Neutral	Changes less than 0.5% are considered neutral

The S and P 500 was down and the rebounded last week. Signals are bearish for the upcoming week. Market momentum and breadth have been showing divergences for months now and sentiment indicators are still highly complacent and a big breakdown will likely start soon. It is interesting to see all risky assets suddenly moving together much like in 2008. This is setting us up for some serious downside unless recent resistance gets taken out soon. The market is struggling to get past its 50 DMA and gold just made a massive move down last week which is deflationary. The critical levels to watch are 2160 (up) and 2140 (down) on the S & P and 8750 (up) and 8600 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets. You can check out last week’s report for a comparison. Love your thoughts and feedback.