|
Indicator |
Weekly
Level / Change |
Implication
for S
& P 500 |
Implication
for Nifty* |
|
S
& P 500 |
3907,
-0.71% |
Bearish |
Bearish |
|
Nifty |
14982,
-1.20% |
Neutral
** |
Bearish |
|
China
Shanghai Index |
3696,
1.12% |
Bullish |
Bullish |
|
Gold |
1783,
-2.07% |
Bearish |
Bearish |
|
WTIC
Crude |
59.26,
-1.84% |
Bearish |
Bearish |
|
Copper |
4.08,
7.29% |
Bullish |
Bullish |
|
Baltic
Dry Index |
1698,
26.81% |
Bullish |
Bullish |
|
Euro |
1.2119,
0.01% |
Neutral |
Neutral |
|
Dollar/Yen |
105.45,
0.49% |
Neutral |
Neutral |
|
Dow
Transports |
13274,
0.75% |
Bullish |
Bullish |
|
High
Yield (Bond ETF) |
109.29,
-0.32% |
Neutral |
Neutral |
|
US
10 year Bond Yield |
1.34%,
10.75% |
Bearish |
Bearish |
|
NYSE
Summation Index |
880,
-3.81% |
Bearish |
Neutral |
|
US
Vix |
22.05,
10.42% |
Bearish |
Bearish |
|
Skew |
142 |
Bearish |
Bearish |
|
20
DMA, S and P 500 |
3863,
Above |
Bullish |
Neutral |
|
50
DMA, S and P 500 |
3789,
Above |
Bullish |
Neutral |
|
200
DMA, S and P 500 |
3423,
Above |
Bullish |
Neutral |
|
20
DMA, Nifty |
14759,
Above |
Neutral |
Bullish |
|
50
DMA, Nifty |
14321,
Above |
Neutral |
Bullish |
|
200
DMA, Nifty |
11969,
Above |
Neutral |
Bullish |
|
S
& P 500 P/E |
39.78 |
Bearish |
Neutral |
|
Nifty
P/E |
40.88 |
Neutral |
Bearish |
|
India
Vix |
22.25,
0.94% |
Neutral |
Bearish |
|
Dollar/Rupee |
72.56,
-0.03% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
7 |
7 |
|
|
Bearish
Indications |
8 |
9 |
|
|
Outlook |
Bearish |
Bearish |
|
|
Observation |
The
S and P and the Nifty fell last week. Indicators are marginally bearish for
the week. The
markets are about to begin a great
depression style collapse. Watch those stops. |
||
|
On
the Horizon |
China –
PBOC rate decision, UK – Employment
data, Eurozone – CPI, german GDP, 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 and the Nifty fell last
week. Indicators are marginally bearish for the week. The epic crash signal is
alive and well with retail, hedge funds, and speculators all in, despite the
recent melt up and break out of the long term broadening top, 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
crash is on the menu. 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 the next few months. The FED
is repeating the Japan experiment and the 3 lost 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 as we make a major
top in global equity markets. The market is looking like the short of a
lifetime with topping action in the transports, other global indices, and
commodities. High valuations continue.
The recent global virus epidemic
(black swan) has dented global GDP significantly and will usher in a depression
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 rebounding 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 interest
rates plunge into a recession. The critical levels to watch for the week are 3920 (up) and 3895 (down) on the S & P
500 and 15050 (up) and 14900 (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.
