Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning February 24

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3338, -1.25%	Bearish	Bearish
Nifty	12081, -0.27%	Neutral **	Neutral
China Shanghai Index	3040, 4.21%	Bullish	Bullish
Gold	1646, 3.76%	Bullish	Bullish
WTIC Crude	53.44, 2.06%	Bullish	Bullish
Copper	2.60, -0.19%	Neutral	Neutral
Baltic Dry Index	497, 16.94%	Bullish	Bullish
Euro	1.0848, 0.15%	Neutral	Neutral
Dollar/Yen	111.59, 1.67%	Bullish	Bullish
Dow Transports	10909, 0.42%	Neutral	Neutral
High Yield (Bond)	110.08, -0.07%	Neutral	Neutral
US 10 year Bond Yield	1.47%, -7.24%	Bullish	Bullish
Nyse Summation Index	652, -4.60%	Bearish	Neutral
US Vix	17.08, 24.85%	Bearish	Bearish
Skew	135	Neutral	Neutral
20 DMA, S and P 500	3323, Above	Bullish	Neutral
50 DMA, S and P 500	3274, Above	Bullish	Neutral
200 DMA, S and P 500	3042, Above	Bullish	Neutral
20 DMA, Nifty	12072, Above	Neutral	Bullish
50 DMA, Nifty	12148, Below	Neutral	Bearish
200 DMA, Nifty	11682, Above	Neutral	Bullish
S & P 500 P/E	23.77	Bearish	Neutral
Nifty P/E	27.50	Neutral	Bearish
India Vix	13.70, 0.62%	Neutral	Bearish
Dollar/Rupee	71.88, 0.49%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	9	8
Bearish Indications	4	5
Outlook	Bullish	Bullish
Observation	The S and P 500 was down and the Nifty was unchanged last week. Indicators are bullish for the week. The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon	US – GDP, Eurozone – German employment data, German GDP
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Stock charts, investing.com, multpl.com, NSE
**Neutral	Changes less than 0.5% are considered neutral

The S and P 500 was down and the Nifty was unchanged last week. Indicators are bullish for the coming week. Despite the big rally markets have only got as far as the breakdown trend lines and are reversing lower. An epic meltdown is just around the corner. Long term, QE forever from the FED is about to trigger the deflationary collapse of the century and we are likely making another major top in global equity markets. The market is looking like the short of a life time with non-conformations from the transports, other global indices and commodities. Insane valuations continue. The breakdown in Crude and the Euro is a likely a precursor to a massive drop in the S and P 500. The recent virus epidemic in China is likely to dent global GDP and usher in a recession much faster than most think. The trend is about to change from bullish to bearish and the markets are about to get smashed by a strong dollar. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and over stretched valuations. We are on the verge of a multi-year great depression. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Tail risk has been very high off late as the yield curve inverts. The critical levels to watch for the week are 3350 (up) and 3325 (down) on the S & P 500 and 12150 (up) and 12000 (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.

Stretched Market Valuations?

A very interesting pic from a post from Michael Lebowitz (via Twitter) highlighting stretched market valuations. Yes you must not fight the Fed and fight the tape but things are getting way too stretched in here valuation wise:

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning February 17

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3380, 1.58%	Bullish	Bullish
Nifty	12114, 0.12%	Neutral **	Neutral
China Shanghai Index	2917, 1.43%	Bullish	Bullish
Gold	1587, 1.16%	Bullish	Bullish
WTIC Crude	52.32, 3.97%	Bullish	Bullish
Copper	2.60, 1.80%	Bullish	Bullish
Baltic Dry Index	425, 2.41%	Bullish	Bullish
Euro	1.0831, -1.04%	Bearish	Bearish
Dollar/Yen	109.78, 0.05%	Neutral	Neutral
Dow Transports	10863, 0.05%	Neutral	Neutral
High Yield (Bond)	110.16, 0.51%	Bullish	Bullish
US 10 year Bond Yield	1.59%, 1.83%	Bearish	Bearish
Nyse Summation Index	684, 4.50%	Bullish	Neutral
US Vix	13.68, -11.57%	Bullish	Bullish
Skew	133	Neutral	Neutral
20 DMA, S and P 500	3315, Above	Bullish	Neutral
50 DMA, S and P 500	3255, Above	Bullish	Neutral
200 DMA, S and P 500	3033, Above	Bullish	Neutral
20 DMA, Nifty	12094, Above	Neutral	Bullish
50 DMA, Nifty	12136, Below	Neutral	Bearish
200 DMA, Nifty	11676, Above	Neutral	Bullish
S & P 500 P/E	25.43	Bearish	Neutral
Nifty P/E	27.45	Neutral	Bearish
India Vix	13.62, -0.96%	Neutral	Bullish
Dollar/Rupee	71.53, 0.02%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	12	11
Bearish Indications	3	4
Outlook	Bullish	Bullish
Observation	The S and P 500 was up and the Nifty was unchanged last week. Indicators are bullish for the week. The markets are on the verge of a great depression style collapse. Watch those stops.
On the Horizon	US – PPI, Eurozone – CPI, UK – Employment data, CPI, Japan - GDP
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Stock charts, investing.com, multpl.com, NSE
**Neutral	Changes less than 0.5% are considered neutral

The S and P 500 was up and the Nifty was unchanged last week. Indicators are bullish for the coming week. Despite the big rally markets only got as far as the breakdown trend lines. An epic meltdown is just around the corner. Long term, QE forever from the FED is about to trigger the deflationary collapse of the century and we are likely making another major top in global equity markets. The market is looking like the short of a life time with non-conformations from the transports, other global indices and commodities. Insane valuations continue. The breakdown in Crude and the Euro is a likely a precursor to a massive drop in the S and P 500. The recent virus epidemic in China is likely to dent global GDP and usher in a recession much faster than most think. The trend is about to change from bullish to bearish and the markets are about to get smashed by a strong dollar. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A 5 year deflationary wave is about to start in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and over stretched valuations. We are on the verge of a multi-year great depression. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Tail risk has been very high off late as the yield curve inverts. The critical levels to watch for the week are 3390 (up) and 3370 (down) on the S & P 500 and 12200 (up) and 12050 (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.