About

Ahead of the Curve provides analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity, and FOREX markets are discussed. Rajveer Rawlin is a PhD and received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher, having followed capital markets in the US and India since 1993. His research interests include capital markets, banking, investment analysis, and portfolio management, and he has over 20 years of experience in the above areas, covering the US and Indian markets. He has several publications in the above areas. He currently teaches business and management students at CHRIST University. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Monday, 18 July 2016

Chart of the Week - Deutsche Bank 2016 vs Lehman Brothers 2008

The Chart of the day is via Chris Vermeulen from the goldandoilguy.com and shows a comparison of the price performance of Lehman Brothers in 2008 to the current price performance of Deutsche Bank today. With a number of European and US banks having similar charts to Deutsche Bank and the bank index not confirming recent new highs in the broader market, once can all but wonder if a repeat of 2008 is on the cards:

Sunday, 17 July 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning July 18

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2162, 1.49%	Bullish	Bullish
Nifty	8541, 2.62%	Neutral**	Bullish
China Shanghai Index	3054, 2.22%	Bullish	Bullish
Gold	1338, -2.17%	Bearish	Bearish
WTIC Crude	46.28, 2.57%	Bullish	Bullish
Copper	2.23, 5.13%	Bullish	Bullish
Baltic Dry Index	745, 5.97%	Bullish	Bullish
Euro	1.103, -0.20%	Neutral	Neutral
Dollar/Yen	104.91, 4.39%	Bullish	Bullish
Dow Transports	7985, 3.93%	Bullish	Bullish
High Yield (ETF)	36.11, 0.11%	Neutral	Neutral
US 10 year Bond Yield	1.59%, 16.69%	Bearish	Bearish
Nyse Summation Index	1152, 25.95%	Bullish	Neutral
US Vix	12.67, -4.02%	Bullish	Bullish
20 DMA, S and P 500	2099, Above	Bullish	Neutral
50 DMA, S and P 500	2086, Above	Bullish	Neutral
200 DMA, S and P 500	2032, Above	Bullish	Neutral
20 DMA, Nifty	8311, Above	Neutral	Bullish
50 DMA, Nifty	8134, Above	Neutral	Bullish
200 DMA, Nifty	7814, Above	Neutral	Bullish
India Vix	15.64, 3.68%	Neutral	Bearish
Dollar/Rupee	67.08, -0.08%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	12	12
Bearish Indications	2	3
Outlook	Bullish	Bullish
Observation	The S and P 500 and the Nifty rallied last week. Indicators are bullish. Markets are trying to break above resistance. Time to tighten those stops.
On the Horizon	New Zealand – CPI, England – CPI, Euro zone – ECB rate decision, Canada – CPI, Retail sales

*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, FXCM
**Neutral	Changes less than 0.5% are considered neutral

The Sand P 500 and the Nifty rallied above resistance last week. Signals are bullish for the upcoming week. The Vix is suggesting complacency. The Yen, gold and treasuries gave up some of the recent flight to safety. The markets are trying to take out significant long term resistance and are likely to continue major breakdowns in 2016 after this rally concludes. The critical levels to watch are 2180 (up) and 2150 (down) on the S & P and 8600 (up) and 8450 (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. You can also check out support and resistance levels of the S and P 500 and Nifty Indices. Love your thoughts and feedback.

Tuesday, 12 July 2016

Chart of the Week - Historical Inflation View

The chart of the week is courtesy MarketWatch and shows inflation levels over time. We have been in a dis-inflationary phase for over 20 years now and could soon enter a deflationary spiral as record levels of quantitative easing (QE) have failed to spark an upthrust in inflation:

My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.