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Ahead of the Curve provides analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity, and FOREX markets are discussed. Rajveer Rawlin is a PhD and received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher, having followed capital markets in the US and India since 1993. His research interests include capital markets, banking, investment analysis, and portfolio management, and he has over 20 years of experience in the above areas, covering the US and Indian markets. He has several publications in the above areas. He currently teaches business and management students at CHRIST University. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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Sunday, 10 September 2017

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning September 11


Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2461, -0.61%
Bearish
Bearish
Nifty
9935, -0.40%
Neutral **
Neutral
China Shanghai Index
3365, -0.06%
Neutral
Neutral
Gold
1351, 1.56%
Bullish
Bullish
WTIC Crude
47.48, 0.40%
Neutral
Neutral
Copper
3.04, -2.45%
Bearish
Bearish
Baltic Dry Index
1296, 9.46%
Bullish
Bullish
Euro
1.2035, 1.48%
Bullish
Bullish
Dollar/Yen
107.80, -2.25%
Bearish
Bearish
Dow Transports
9384, 0.30%
Neutral
Neutral
High Yield (ETF)
36.93, -0.49%
Neutral
Neutral
US 10 year Bond Yield
2.06%, -4.45%
Bullish
Bullish
Nyse Summation Index
347, 29.96%
Bullish
Neutral
US Vix
12.12, 19.64%
Bearish
Bearish
Skew
131
Neutral
Neutral
20 DMA, S and P 500
2452, Above
Bullish
Neutral
50 DMA, S and P 500
2455, Above
Bullish
Neutral
200 DMA, S and P 500
2368, Above
Bullish
Neutral
20 DMA, Nifty
9866, Above
Neutral
Bullish
50 DMA, Nifty
9869, Above
Neutral
Bullish
200 DMA, Nifty
9137, Above
Neutral
Bullish
India Vix
12.96, 11.03%
Neutral
Bearish
Dollar/Rupee
63.97, -0.09%
Neutral
Neutral


Overall


S & P 500


Nifty


Bullish Indications
8

7

Bearish Indications
4
5

Outlook
Bullish
Bullish

Observation
The S and P 500 and the Nifty fell last week. Indicators are bullish.
The market is topping. Time to tighten those stops.


On the Horizon
China – Industrial production, Australia – Employment data, UK – CPI, Employment data, BOE rate decision, Switzerland – Rate decision, Russia – Rate decision, U.S – PPI, Oil inventories, CPI, Retail sales






*Nifty
India’s Benchmark Stock Market Index


Raw Data
Courtesy Google finance, Stock charts, investing.com


**Neutral
Changes less than 0.5% are considered neutral



stock market signals september 11
The S and P 500 and the Nifty fell last week. Signals are 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. The markets are still trading at 3 standard deviations above their long term averages from which corrections usually result. The critical levels to watch are 2470 (up) and 2450 (down) on the S & P and 10000 (up) and 9850 (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.

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Cash - 40%
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My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.