Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning October 15

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2767, -4.10%	Bearish	Bearish
Nifty	10473, 1.51%	Neutral **	Bullish
China Shanghai Index	2607, -7.60%	Bearish	Bearish
Gold	1222, 1.36%	Bullish	Bullish
WTIC Crude	71.34, -4.04%	Bearish	Bearish
Copper	2.80, 1.36%	Bullish	Bullish
Baltic Dry Index	1579, 2.80%	Bullish	Bullish
Euro	1.1575, 0.39%	Neutral	Neutral
Dollar/Yen	112.10, -1.37%	Bearish	Bearish
Dow Transports	10489, -6.40%	Bearish	Bearish
High Yield (ETF)	35.50, -0.14%	Neutral	Neutral
US 10 year Bond Yield	3.14%, -2.60%	Bullish	Bullish
Nyse Summation Index	-348, -3118%	Bearish	Neutral
US Vix	21.31, 43.79%	Bearish	Bearish
Skew	126	Neutral	Neutral
20 DMA, S and P 500	2887, Below	Bearish	Neutral
50 DMA, S and P 500	2877, Below	Bearish	Neutral
200 DMA, S and P 500	2766, Above	Bullish	Neutral
20 DMA, Nifty	10875, Below	Neutral	Bearish
50 DMA, Nifty	11241, Below	Neutral	Bearish
200 DMA, Nifty	10779, Below	Neutral	Bearish
India Vix	18.63, -5.60%	Neutral	Bullish
Dollar/Rupee	73.68, -0.52%	Neutral	Bullish
Overall	S & P 500	Nifty
Bullish Indications	5	7
Bearish Indications	9	9
Outlook	Bearish	Bearish
Observation	The S and P 500 was down and the Nifty rebounded last week. Indicators are bearish. After a brief rebound the markets should resume a major collapse. Watch those stops.
On the Horizon	China – GDP, Australia – Employment data, New Zealand – CPI, UK – Employment data, CPI, Euro Zone – CPI, Canada - CPI
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, investing.com
**Neutral	Changes less than 0.5% are considered neutral

The S and P 500 was down and the Nifty rallied last week. Indicators are bearish for the upcoming week. The markets are quite oversold near term and this rebound could last for a few days after which the selling would resume. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A major top has been established in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. This is going to be followed by a massive selloff and most likely a deflationary collapse. Quantitative tightening by the FED is yet to be priced in fully. 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 off late. The critical levels to watch for the week are 2780 (up) and 2755 (down) on the S & P 500 and 10550 (up) and 10400 (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.

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning October 08

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2886, -0.97%	Bearish	Bearish
Nifty	10317, -5.62%	Neutral **	Bearish
China Shanghai Index	2821, 0.00%	Neutral	Neutral
Gold	1206, 0.79%	Bullish	Bullish
WTIC Crude	74.34, 1.49%	Bullish	Bullish
Copper	2.76, -1.50%	Bearish	Bearish
Baltic Dry Index	1536, -0.26%	Neutral	Neutral
Euro	1.1529, -0.58%	Bearish	Bearish
Dollar/Yen	113.65, 0.01%	Neutral	Neutral
Dow Transports	11207, -1.52%	Bearish	Bearish
High Yield (ETF)	35.55, -0.91%	Bearish	Bearish
US 10 year Bond Yield	3.23%, 5.53%	Bearish	Bearish
Nyse Summation Index	12, -94.91%	Bearish	Neutral
US Vix	14.82, 22.28%	Bearish	Bearish
Skew	130	Neutral	Neutral
20 DMA, S and P 500	2908, Below	Bearish	Neutral
50 DMA, S and P 500	2877, Above	Bullish	Neutral
200 DMA, S and P 500	2763, Above	Bullish	Neutral
20 DMA, Nifty	11151, Below	Neutral	Bearish
50 DMA, Nifty	11321, Below	Neutral	Bearish
200 DMA, Nifty	10780, Below	Neutral	Bearish
India Vix	19.73, 16.11%	Neutral	Bearish
Dollar/Rupee	74.06, 2.15%	Neutral	Bearish
Overall	S & P 500	Nifty
Bullish Indications	4	2
Bearish Indications	9	13
Outlook	Bearish	Bearish
Observation	The S and P 500 and the Nifty were down last week. Indicators are bearish. The markets are on the verge of a major collapse. Watch those stops.
On the Horizon	US – PPI, CPI, UK – GDP
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, investing.com
**Neutral	Changes less than 0.5% are considered neutral

 

Weekly Stock Market Outlook

The S and P 500 and the Nifty were down hard last week. Indicators are comprehensively bearish for the upcoming week. Looking for significant under performance in the Nifty going forward on rapidly deteriorating macros. A major top has been established in key asset classes like the Euro, stocks and commodities amidst a number of bearish divergences and Hindenburg omens. This is going to be followed by a massive selloff and most likely a deflationary collapse. Quantitative tightening by the FED is yet to be priced in fully. 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 off late. The critical levels to watch for the week are 2900 (up) and 2875 (down) on the S & P 500 and 10400 (up) and 10200 (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.