|
Indicator |
Weekly Level /
Change |
Implication for S & P 500 |
Implication for
Nifty* |
|
S & P 500 |
4186, 1.37% |
Bullish |
Bullish |
|
Nifty |
14618, -1.46% |
Neutral ** |
Bearish |
|
China Shanghai Index |
3427, -0.70% |
Bearish |
Bearish |
|
Gold |
1777, 1.93% |
Bullish |
Bullish |
|
WTIC Crude |
63.19, 6.52% |
Bullish |
Bullish |
|
Copper |
4.17, 3.13% |
Bullish |
Bullish |
|
Baltic Dry Index |
2385, 14.39% |
Bullish |
Bullish |
|
Euro |
1.1986, 0.76% |
Bullish |
Bullish |
|
Dollar/Yen |
108.81, -0.77% |
Bearish |
Bearish |
|
Dow Transports |
14920, 0.01% |
Neutral |
Neutral |
|
High Yield (Bond ETF) |
109.00, 0.10% |
Neutral |
Neutral |
|
US 10 year Bond Yield |
1.59%, -5.05% |
Bullish |
Bullish |
|
NYSE Summation Index |
719, 13.43% |
Bullish |
Neutral |
|
US Vix |
16.25, -2.64% |
Bullish |
Bullish |
|
Skew |
138 |
Neutral |
Neutral |
|
20 DMA, S and P 500 |
4033, Above |
Bullish |
Neutral |
|
50 DMA, S and P 500 |
3951, Above |
Bullish |
Neutral |
|
200 DMA, S and P 500 |
3605, Above |
Bullish |
Neutral |
|
20 DMA, Nifty |
14661, Below |
Neutral |
Bearish |
|
50 DMA, Nifty |
14862, Below |
Neutral |
Bearish |
|
200 DMA, Nifty |
12881, Above |
Neutral |
Bullish |
|
S & P 500 P/E |
42.61 |
Bearish |
Neutral |
|
Nifty P/E |
32.84 |
Neutral |
Bearish |
|
India Vix |
20.40, 3.12% |
Neutral |
Bearish |
|
Dollar/Rupee |
74.54, -0.24% |
Neutral |
Neutral |
|
Overall |
S & P 500 |
Nifty |
|
|
Bullish Indications |
12 |
9 |
|
|
Bearish Indications |
3 |
7 |
|
|
Outlook |
Bullish |
Bullish |
|
|
Observation |
The S and P rallied and
the Nifty fell last week. Indicators are bullish for the week. The markets are about
to begin a great depression style collapse. Watch those stops. |
||
|
On the Horizon |
Eurozone – ECB rate decision, UK – Employment data, CPI,
China – PBOC rate decision |
||
|
*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 rallied and the Nifty fell last week. The market is on the verge of an epic correction. Indicators are bullish for the week. Deflationary
busts begin after inflation scares (the market is calling the Fed’s bluff) and
gold is telegraphing just that. Corporate bonds are
flashing early warning signs. 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. Extremely low volatility suggests
complacency and downside ahead.
We
rallied 46% right after the great depressions (1930’s) first collapse and we
have rallied over 80% in our most recent rally of the lows in the last 12 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 are about to plunge yet again reflecting a major recession. The critical
levels to watch for the week are 4200 (up) and 4175
(down) on the S & P 500 and 14700 (up) and 14550
(down) on the Nifty. The Nifty will likely underperform in the next few years. A significant breach of the above
levels could trigger the next big move in the above markets. China,
gold, and bonds are on Ichimoku daily sell signals while
the Dollar, S & P 500, and Nifty are on Ichimoku daily
buy signals so some things got to give. High beta / P/E is
about to get torched in April (despite the bullish consensus emerging). Gold will likely prove to be the best asset class in the next 5 years. You can check out last week’s report for a comparison.
Love your thoughts and feedback.
