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

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3041, -4.78%	Bearish	Bearish
Nifty	9973, -1.67%	Neutral **	Bearish
China Shanghai Index	2920, -0.38%	Neutral	Neutral
Gold	1738, 3.24%	Bullish	Bullish
WTIC Crude	36.48, -7.76%	Bearish	Bearish
Copper	2.62, 2.37%	Bullish	Bullish
Baltic Dry Index	839, 23.56%	Bullish	Bullish
Euro	1.1256, -0.27%	Neutral	Neutral
Dollar/Yen	107.36, -2.03%	Bearish	Bearish
Dow Transports	9082, -8.01%	Bearish	Bearish
High Yield (Bond ETF)	102.28, -2.23%	Bearish	Bearish
US 10 year Bond Yield	0.71%, -21.13%	Bullish	Bullish
Nyse Summation Index	1020, 19.30%	Bullish	Neutral
US Vix	36.09, 47.19%	Bearish	Bearish
Skew	134	Neutral	Neutral
20 DMA, S and P 500	3048, Below	Bearish	Neutral
50 DMA, S and P 500	2903, Above	Bullish	Neutral
200 DMA, S and P 500	3014, Above	Bullish	Neutral
20 DMA, Nifty	9585, Above	Neutral	Bullish
50 DMA, Nifty	8284, Above	Neutral	Bullish
200 DMA, Nifty	10934, Below	Neutral	Bearish
S & P 500 P/E	21.81	Bearish	Neutral
Nifty P/E	24.08	Neutral	Bearish
India Vix	30.82, 7.47%	Neutral	Bearish
Dollar/Rupee	76.05, 0.65%	Neutral	Bearish
Overall	S & P 500	Nifty
Bullish Indications	7	6
Bearish Indications	8	11
Outlook	Bearish	Bearish
Observation	The S and P and the Nifty fell last week. Indicators are bearish for the week. The markets have begun a great depression style collapse. Watch those stops.
On the Horizon	Eurozone – CPI, UK – Employment data, CPI, BOE rate decision, US – CPI, Japan – BOJ 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 500 and the Nifty fell last week. Indicators are bearish for the coming week. After extreme euphoria for the indices a highly probable selloff to the 2700 area is emerging on the S and P, and 8500 should arrive on the Nifty the next two weeks. The markets are very close to an epic melt down and the SPX is headed to 1800 in the long term. 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 maybe as low as 800 on the S and P. QE forever from the FED is about to trigger the deflationary collapse of the century and we have made a major top in global equity markets. The market is looking like the short of a life time with non-conformations from the transports, other global indices and commodities. High valuations continue. The breakdown in Crude and the Euro is a precursor to yet another massive drop in the S and P 500. The recent global virus epidemic (black swan) is likely to dent global GDP significantly and usher in a depression much faster than most think. The trend has changed from bullish to bearish and the markets are getting smashed by a strong dollar. Looking for significant under performance 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 a number of bearish divergences and over stretched 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 off late as the yield curve inverts into a recession. The critical levels to watch for the week are 3055 (up) and 3030 (down) on the S & P 500 and 10050 (up) and 9900 (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. Finally a technical outlook from @JoeFriday714:

#SPX .. same chart as below only using Heikin Ashi candles. A Red Candle close this week could seal the deal.. https://t.co/gXH3tfN6DJ pic.twitter.com/MyhgFJRMEu

— JoeFriday714 (@joefriday_714) June 14, 2020

Markets - A look ahead

This week I am not doing my regular post. Instead I am sharing a video that takes a look at some key asset classes. The S & P is likely making an euphoric top near its broadening top at 3240, the bottom of that channel is 2200. So the in between level of 2700 may come very fast. The Nifty is likely to find resistance at its 200 WMA near 10350.  Let me know your thoughts:

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning June 01

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3044, 3.01%	Bullish	Bullish
Nifty	9580, 5.99%	Neutral **	Bullish
China Shanghai Index	2852, 1.37%	Bullish	Bullish
Gold	1752, 1.22%	Bullish	Bullish
WTIC Crude	35.34, 7.42%	Bullish	Bullish
Copper	2.44, 1.88%	Bullish	Bullish
Baltic Dry Index	489, -1.81%	Bearish	Bearish
Euro	1.1104, 1.85%	Bullish	Bullish
Dollar/Yen	107.83, 0.19%	Neutral	Neutral
Dow Transports	8970, 5.90%	Bullish	Bullish
High Yield (Bond ETF)	101.99, 1.70%	Bullish	Bullish
US 10 year Bond Yield	0.65%, -0.67%	Bullish	Bullish
Nyse Summation Index	445, 126.47%	Bullish	Neutral
US Vix	27.51, -2.31%	Bullish	Bullish
Skew	132	Neutral	Neutral
20 DMA, S and P 500	2920, Above	Bullish	Neutral
50 DMA, S and P 500	2773, Above	Bullish	Neutral
200 DMA, S and P 500	3002, Above	Bullish	Neutral
20 DMA, Nifty	9225, Above	Neutral	Bullish
50 DMA, Nifty	8986, Above	Neutral	Bullish
200 DMA, Nifty	10982, Below	Neutral	Bearish
S & P 500 P/E	21.83	Bearish	Neutral
Nifty P/E	22.38	Neutral	Bearish
India Vix	30.22, -6.66%	Neutral	Bullish
Dollar/Rupee	75.61, -0.45%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	14	14
Bearish Indications	2	3
Outlook	Bullish	Bullish
Observation	The S and P and the Nifty rallied last week. Indicators are bullish for the week. The markets have begun a great depression style collapse. Watch those stops.
On the Horizon	Eurozone – German Employment data, ECB rate decision, US – Employment data
*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 500 and the Nifty rallied last week. Indicators are bullish for the coming week. It’s back to mid Feb euphoria for the indices and a March style repeat awaits. The markets are very close to an epic melt down and the SPX is headed to 1800 in the medium term. It is 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 maybe as low as 800 on the S and P. QE forever from the FED is about to trigger the deflationary collapse of the century and we have made a major top in global equity markets. The market is looking like the short of a life time with non-conformations from the transports, other global indices and commodities. High valuations continue. The breakdown in Crude and the Euro is a precursor to yet another massive drop in the S and P 500. The recent global virus epidemic (black swan) is likely to dent global GDP significantly and usher in a depression much faster than most think. The trend has changed from bullish to bearish and the markets are getting smashed by a strong dollar. Looking for significant under performance 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 a number of bearish divergences and over stretched 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 off late as the yield curve inverts into a recession. The critical levels to watch for the week are 3060 (up) and 3030 (down) on the S & P 500 and 9650 (up) and 9500 (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.