The Case for a Sell in May and Go Away

Daily Market Insight

Here is your daily insight from global financial markets. Today's post is an aggregate of interesting news and views form the Stock, FOREX, Commodity markets and the Economy:

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 8

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2399, 0.63%	Bullish	Bullish
Nifty	9285, -0.20%	Neutral **	Neutral
China Shanghai Index	3103, -1.64%	Bearish	Bearish
Gold	1227, -3.26%	Bearish	Bearish
WTIC Crude	46.22, -6.30%	Bearish	Bearish
Copper	2.53, -3.03%	Bearish	Bearish
Baltic Dry Index	994, -10.37%	Bearish	Bearish
Euro	1.100, 0.92%	Bullish	Bullish
Dollar/Yen	112.70, 1.09%	Bullish	Bullish
Dow Transports	9190, 1.01%	Bullish	Bullish
High Yield (ETF)	36.93, -0.11%	Neutral	Neutral
US 10 year Bond Yield	2.35%, 3.07%	Bearish	Bearish
Nyse Summation Index	609, -1.77%	Bearish	Neutral
US Vix	10.57, -2.31%	Bullish	Bullish
Skew	131	Neutral	Neutral
20 DMA, S and P 500	2368, Above	Bullish	Neutral
50 DMA, S and P 500	2366, Above	Bullish	Neutral
200 DMA, S and P 500	2246, Above	Bullish	Neutral
20 DMA, Nifty	9232, Above	Neutral	Bullish
50 DMA, Nifty	9112, Above	Neutral	Bullish
200 DMA, Nifty	8654, Above	Neutral	Bullish
India Vix	11.99, 10.38%	Neutral	Bearish
Dollar/Rupee	64.29, 0.08%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	8	8
Bearish Indications	7	7
Outlook	Bullish	Bullish
Observation	The S and P 500 was up and the Nifty was unchanged last week. Indicators are mildly bullish. The market is about to break down. Time to watch those stops.
On the Horizon	China – CPI, New loan data, New Zealand – Rate decision, Wheeler speech, Euro Zone – French elections, Draghi speech, German GDP, UK – Rate decision, US – CPI, Retail sales, U. Mich. consumer confidence data
*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 up and the Nifty was unchanged last week. Signals are mildly bullish for the upcoming week. Past and future FED rate hikes are yet to be priced in and sentiment indicators are back in complacency mode. Market internals, the transports and commodities are flashing major warning signs of a large decline ahead. The critical levels to watch are 2410 (up) and 2390 (down) on the S & P and 9350 (up) and 9200 (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.