Bitcoin 2017 Vs Home Builders 2008 Vs Nasdaq 2000

Most periods of excessive booms end with speculative busts. The dotcom bust of 2000 produced a recession so did the housing bust of 2008. Today's poster child seems to be bitcoin. Just as the internet was here to stay back in 2000 so is block chain technology today. However crypto currencies are trading at levels suggesting they could become reserve currencies of the world replacing the dollar and that implies a reset on short order. It's never different and always the same:

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

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2652, 0.35%	Neutral	Neutral
Nifty	10266, 1.43%	Neutral **	Bullish
China Shanghai Index	3290, -0.83%	Bearish	Bearish
Gold	1248, -2.64%	Bearish	Bearish
WTIC Crude	57.36, -1.71%	Bearish	Bearish
Copper	2.98, -3.69%	Bearish	Bearish
Baltic Dry Index	1679, 6.40%	Bullish	Bullish
Euro	1.1773, -1.04%	Bearish	Bearish
Dollar/Yen	113.46, 1.19%	Bullish	Bullish
Dow Transports	10403, 2.12%	Bullish	Bullish
High Yield (ETF)	36.76, 0.03%	Neutral	Neutral
US 10 year Bond Yield	2.38%, 0.89%	Bearish	Bearish
Nyse Summation Index	488, 0.23%	Neutral	Neutral
US Vix	9.58, -16.19%	Bullish	Bullish
Skew	133	Neutral	Neutral
20 DMA, S and P 500	2609, Above	Bullish	Neutral
50 DMA, S and P 500	2581, Above	Bullish	Neutral
200 DMA, S and P 500	2461, Above	Bullish	Neutral
20 DMA, Nifty	10247, Above	Neutral	Bullish
50 DMA, Nifty	10206, Above	Neutral	Bullish
200 DMA, Nifty	9714, Above	Neutral	Bullish
India Vix	13.67, -7.59%	Neutral	Bullish
Dollar/Rupee	64.49, -0.08%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	7	9
Bearish Indications	6	6
Outlook	Bullish	Bullish
Observation	The S and P 500 made new highs and the Nifty rallied last week. Indicators are bullish. The market is topping. Time to tighten those stops.
On the Horizon	Australia – Employment data, Japan – Tankan business survey, China – Industrial production, Euro Zone – German ZEW economic sentiment, German PMI, ECB rate decision, UK – CPI, PMI, CPI, Employment data, Retail sales, Rate decision, Switzerland – Rate decision, U.S – PPI, Oil inventories, CPI, FOMC rate decision, Retail sales, Russia – Rate decision
*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

The S and P 500 made a new high and the Nifty moved up last week. Signals are bullish for the upcoming week. Quantitative tightening by the FED is yet to be priced in and sentiment indicators are back in complacency mode. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. The critical levels to watch are 2660 (up) and 2640 (down) on the S & P and 10350 (up) and 10200 (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.

Yield Curve about to Invert?

The spread between 10 year US bonds and 2 year US bonds is currently at 5 year lows and will likely go negative post the fed rate hike next week. This would most likely cause the US yield curve to eventually invert and is a harbinger of a decelerating/recessionary economy going forward. Will tax cuts save the day? I doubt it.