|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3465,
-0.53% |
Bearish |
Bearish |
|
Nifty |
11930,
1.43% |
Neutral
** |
Bullish |
|
China
Shanghai Index |
3278,
-1.75% |
Bearish |
Bearish |
|
Gold |
1904,
-0.13% |
Neutral |
Neutral |
|
WTIC
Crude |
39.75,
-2.76% |
Bearish |
Bearish |
|
Copper |
3.14,
2.43% |
Bullish |
Bullish |
|
Baltic
Dry Index |
1401,
-5.15% |
Bearish |
Bearish |
|
Euro |
1.1862,
1.23% |
Bullish |
Bullish |
|
Dollar/Yen |
104.72,
-0.65% |
Bearish |
Bearish |
|
Dow
Transports |
11880,
0.37% |
Neutral |
Neutral |
|
High
Yield (Bond ETF) |
105.51,
0.37% |
Neutral |
Neutral |
|
US
10 year Bond Yield |
0.84%,
10.57% |
Bearish |
Bearish |
|
NYSE
Summation Index |
353,
-8.41% |
Bearish |
Neutral |
|
US
Vix |
27.55,
0.51% |
Bearish |
Bearish |
|
Skew |
127 |
Neutral |
Neutral |
|
20
DMA, S and P 500 |
3431,
Above |
Bullish |
Neutral |
|
50
DMA, S and P 500 |
3408,
Above |
Bullish |
Neutral |
|
200
DMA, S and P 500 |
3129,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
11682,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
11506,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
10718,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
34.92 |
Bearish |
Neutral |
|
Nifty
P/E |
34.37 |
Neutral |
Bearish |
|
India
Vix |
21.83,
0.84% |
Neutral |
Bearish |
|
Dollar/Rupee |
73.84,
0.54% |
Neutral |
Bearish |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
5 |
6 |
|
|
Bearish
Indications |
9 |
10 |
|
|
Outlook |
Bearish |
Bearish |
|
|
Observation |
The
S and P fell and the Nifty rallied last week. Indicators are bearish for the
week. The
markets have begun a great depression style
collapse. Watch those stops. |
||
|
On
the Horizon |
Japan – BOJ rate
decision, Eurozone – German
employment data, German GDP, ECB rate decision, CPI, US - 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 fell and the Nifty rallied last week. Indicators
are bearish for the coming week. The
moment of reckoning is upon us. The recent
bullish technicals observed are about to be trumped by bearish fundamentals. The
market is yet to price in one of the worst earnings decline periods
in stock market history. With extremely high valuations, an October /
November crash is on the menu following the recent bounce from the 50dma. Low
volatility suggests complacency and more downside ahead.
We rallied 46% right
after the great depressions (1930’s) first collapse and we have rallied over
50% in our most recent rally of the lows in a similar 6 month period. After
extreme euphoria for the indices, a highly probable selloff to the 3000 area is
emerging on the S and P, and 10000 should arrive on the Nifty in short order. The FED is
repeating the Japan experiment and the lost 3 decades in Japan (1989-2019) is
set to repeat across the globe. SPX 1500 and lower by year-end and we stay
there till 2030, scary? The markets are very close to an epic meltdown
and the SPX is headed way lower.
The markets are
overvalued, overbought and out of touch with economic realities. Long
term, the epic meltdown is set to continue resulting in a 5 year
plus bear market with lot lower levels may be as low as 800 on the S and P. QE
forever from the FED is about to trigger the deflationary collapse of the
century and we have made a major top in global equity markets. The
market is looking like the short of a lifetime with
non-conformations from the transports, other global indices, and commodities.
High valuations continue. The breakdown in Crude is a precursor to yet another
massive drop in the S and P 500.
The recent global virus
epidemic (black swan) is likely to dent global GDP
significantly and usher in a depression much faster than most
think. The trend has changed from bullish to bearish and the markets are
getting smashed by a strong dollar. Looking for significant
underperformance in the Nifty going forward on rapidly deteriorating macros.
A 5-year deflationary wave has started in key asset classes
like the Euro, stocks, and commodities amidst several bearish divergences
and overstretched valuations.
We are entering 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 of late as the yield curve inverts
into a recession. The critical levels to watch for the week are 3475
(up) and 3455 (down) on the S & P 500 and 12000
(up) and 11850 (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.
