|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3699,
1.67% |
Bullish |
Bullish |
|
Nifty |
13259,
2.23% |
Neutral
** |
Bullish |
|
China
Shanghai Index |
3445,
1.06% |
Bullish |
Bullish |
|
Gold |
1842,
2.42% |
Bullish |
Bullish |
|
WTIC
Crude |
46.09,
1.23% |
Bullish |
Bullish |
|
Copper |
3.53,
3.22% |
Bullish |
Bullish |
|
Baltic
Dry Index |
1197,-
2.68% |
Bearish |
Bearish |
|
Euro |
1.2121,
1.33% |
Bullish |
Bullish |
|
Dollar/Yen |
104.19,
0.09% |
Neutral |
Neutral |
|
Dow
Transports |
12742,
1.44% |
Bullish |
Bullish |
|
High
Yield (Bond ETF) |
108.27,
0.57% |
Bullish |
Bullish |
|
US
10 year Bond Yield |
0.97%,
15.31% |
Bearish |
Bearish |
|
NYSE
Summation Index |
943,
19.47% |
Bullish |
Neutral |
|
US
Vix |
20.79,
-0.24% |
Neutral |
Neutral |
|
Skew |
133 |
Neutral |
Neutral |
|
20
DMA, S and P 500 |
3602,
Above |
Bullish |
Neutral |
|
50
DMA, S and P 500 |
3485,
Above |
Bullish |
Neutral |
|
200
DMA, S and P 500 |
3159,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
12824,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
12123,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
10770,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
37.44 |
Bearish |
Neutral |
|
Nifty
P/E |
36.46 |
Neutral |
Bearish |
|
India
Vix |
18.03,
-9.03% |
Neutral |
Bullish |
|
Dollar/Rupee |
73.78,
-0.21% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
12 |
13 |
|
|
Bearish
Indications |
3 |
3 |
|
|
Outlook |
Bullish |
Bullish |
|
|
Observation |
The
S and P and the Nifty made new highs last week. Indicators are bullish for
the week. The
markets have begun a great depression style
collapse. Watch those stops. |
||
|
On
the Horizon |
Eurozone
– ECB rate decision, UK - GDP, US - CPI, PPI, 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 and the Nifty made new
highs last week. Indicators are bullish for the coming week. The epic crash signal is alive and well with retail, hedge funds, and
speculators all in, despite the recent massive up-move suggesting a major top is
imminent. The moment of reckoning is
very near. Technicals are about to
track fundamentals and turn bearish. The market is yet to price in one of
the worst earnings decline periods in stock market history.
With extremely high valuations, a December crash is on the menu
following the recent weak 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 65%
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 in a year 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 about
to get 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 3710
(up) and 3685 (down) on the S & P 500 and 13350
(up) and 13200 (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.
