|
Asset Class |
Weekly Level / Change |
Implication for S & P 500 |
Implication for Nifty* |
|
S & P
500 |
5635, 1.45% |
Bullish |
Bullish |
|
Nifty |
24823, 1.15% |
Neutral ** |
Bullish |
|
China
Shanghai Index |
2854, -0.87% |
Bearish |
Bearish |
|
Gold |
2549, 0.43% |
Neutral |
Neutral |
|
WTIC Crude |
74.96, -2.20% |
Bearish |
Bearish |
|
Copper |
4.25, 2.45% |
Bullish |
Bullish |
|
CRB Index |
279, 1.19% |
Bullish |
Bullish |
|
Baltic Dry
Index |
1762, 4.20% |
Bullish |
Bullish |
|
Euro |
1.1190, 1.47% |
Bullish |
Bullish |
|
Dollar/Yen |
144.37, -2.18% |
Bearish |
Bearish |
|
Dow Transports |
15971, 1.90% |
Bullish |
Neutral |
|
Corporate
Bonds (ETF) |
112.17, 0.88% |
Bullish |
Bullish |
|
High Yield
Bonds (ETF) |
96.86, 0.71% |
Bullish |
Bullish |
|
US 10-year
Bond Yield |
3.80%, -2.26% |
Bullish |
Bullish |
|
NYSE
Summation Index |
777, 39% |
Bullish |
Neutral |
|
US Vix |
15.86, 7.16% |
Bearish |
Neutral |
|
S & P
500 Skew |
154 |
Bearish |
Neutral |
|
CNN Fear
& Greed Index |
Neutral |
Neutral |
Neutral |
|
Nifty MMI
Index |
Fear |
Neutral |
Bullish |
|
20 DMA, S
& P 500 |
5443, Above |
Bullish |
Neutral |
|
50 DMA, S
& P 500 |
5488, Above |
Bullish |
Neutral |
|
200 DMA, S
& P 500 |
5097,
Above |
Bullish |
Neutral |
|
20 DMA,
Nifty |
24544, Above |
Neutral |
Bullish |
|
50 DMA,
Nifty |
24276, Above |
Neutral |
Bullish |
|
200 DMA,
Nifty |
22316,
Above |
Neutral |
Bullish |
|
S & P
500 P/E |
29.44 |
Bearish |
Neutral |
|
Nifty P/E |
23.06 |
Neutral |
Bearish |
|
India Vix |
13.55, -5.90% |
Neutral |
Bullish |
|
Dollar/Rupee |
83.81, -0.08% |
Neutral |
Neutral |
|
Overall |
S
& P 500 |
Nifty |
|
|
Bullish
Indications |
13 |
14 |
|
|
Bearish
Indications |
5 |
4 |
|
|
Outlook |
Bullish |
Bullish |
|
|
Observation |
The
S&P and the Nifty rose last week. Indicators are bullish for the week. Markets
are getting back to resistance. Watch those stops. |
||
|
On
the Horizon |
Eurozone – German GDP, CPI, US – GDP |
||
|
*Nifty |
India’s
Benchmark Stock Market Index |
||
|
Raw Data |
Data courtesy
stockcharts.com, investing.com, multpl.com, nseindia.com, tickertape.in |
||
|
**Neutral |
Changes
less than 0.5% are considered neutral |
The S&P 500 and the Nifty rose last week.
Indicators are bullish for the week. Markets are back at
resistance. We are transitioning from an inflationary regime to a deflationary
one. The sentiment is neutral, and the current bounce may stall
near prior highs, after which carry trade liquidation should resume. The
Nifty is near new highs and will likely underperform after this bounce.
The past week saw US equity markets rise. Most emerging markets rose
as interest rates fell. Transports rose. The Baltic dry index rose. The dollar fell.
Commodities rose. Valuations are expensive, market breadth improved, and the
sentiment is neutral. This week, fear (S&P 500) rose as a possible FED
Pivot looms.
After this rally, a currency crisis should resume and push risky
assets to new lows. Despite the recent inflationary spike, deflation is in the
air, and bonds are telegraphing just that. Feels like a 2008-style recession
trade has begun, with a potential for a decline in risk assets across the
board. The current market is tracking closely the 2000 moves down in
the S&P 500, implying a panic low right ahead in the upcoming months (My
views do not matter; kindly pay attention to the levels). A dollar rebound
from major support is a likely catalyst.
The S&P 500 is near all-time highs. We have bounced from recent
lows without capitulation. This suggests the lows may not be in, and the
regime has changed from buying the dip to selling the rip. We may
get a final flush down soon. Risky assets should continue
breaking to the downside as earnings growth peaks.
The Fed has aggressively tightened into a recession. Deflationary
busts often begin after major inflationary scares. After correcting
significantly, the market has made new highs, and more is left on the downside.
The Dollar, commodities, and bond yields continue to flash major warning signs.
Global yield curves have inverted significantly, reflecting a major upcoming recession. The
recent steepening of the yield curve, within an inverted context, with rates
falling, is a precursor to the next recession, and the riskiest assets will
underperform going forward under such conditions.
The critical levels to watch for the week are 5650 (up) and 5620
(down) on the S&P 500 and 24900 (up) and 24750 (down) on the Nifty. A significant breach of the above levels could trigger the next
big move in the above markets. High beta / P/E will get torched again and
likely be a sell on every rise. Gold increasingly looks like the asset
class (though overextended short-term) to own over the next decade. (Gold
exploded almost 8 times higher over the decade following the dot-com bust in
2000. Imagine what would happen when this AI bubble bursts? following the
recent crypto bubble burst) You can check out last week’s
report for a comparison. Love your
thoughts and feedback.
