Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning December 25

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2683, 0.28%	Neutral	Neutral
Nifty	10493, 1.55%	Neutral **	Bullish
China Shanghai Index	3297, 0.95%	Bullish	Bullish
Gold	1279, 1.69%	Bullish	Bullish
WTIC Crude	58.47, 1.99%	Bullish	Bullish
Copper	3.24, 3.32%	Bullish	Bullish
Baltic Dry Index	1430, -14.27%	Bearish	Bearish
Euro	1.1862, 0.96%	Bullish	Bullish
Dollar/Yen	113.29, 0.61%	Bullish	Bullish
Dow Transports	10675, 2.71%	Neutral	Neutral
High Yield (ETF)	36.63, 0.25%	Neutral	Neutral
US 10 year Bond Yield	2.49%, 5.52%	Bearish	Bearish
Nyse Summation Index	516, 6.61%	Neutral	Bullish
US Vix	9.90, 5.10%	Bearish	Bearish
Skew	134	Neutral	Neutral
20 DMA, S and P 500	2653, Above	Bullish	Neutral
50 DMA, S and P 500	2607, Above	Bullish	Neutral
200 DMA, S and P 500	2476, Above	Bullish	Neutral
20 DMA, Nifty	10289, Above	Neutral	Bullish
50 DMA, Nifty	10292, Above	Neutral	Bullish
200 DMA, Nifty	9786, Above	Neutral	Bullish
India Vix	11.59, -22.44%	Neutral	Bullish
Dollar/Rupee	64.00, -0.08%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	9	12
Bearish Indications	3	3
Outlook	Bullish	Bullish
Observation	The S and P 500 and the Nifty made new highs last week. Indicators are bullish. The market is topping. Time to watch those stops.
On the Horizon	U.S – Consumer confidence, Home sales, Oil inventories
*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 and the Nifty made new highs 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 2695 (up) and 2670(down) on the S & P and 10600 (up) and 10400 (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. 

 

FED Balance Sheet Vs Emerging Market Volatility Vs Stock Market Capitalization to GDP

The assets on the FED balance sheet stands at well over 4.4 trillion dollars, this has coincided with record low emerging market volatility and highly inflated levels of stock market capitalization to GDP globally. With the FED beginning a slow tapering process, some sort of mean reversal is on the cards which could result in an uptick in emerging market volatility and a pull back of some sort in global stock market indices: