Nifty - The Endgame Nears

Nifty is sitting on multi-year resistance. Major rejection is likely in line with a deflationary crash likely to play out in the next few years. Major support at 9500:

Nifty the End is Near by RajveerRawlin7a on TradingView.com

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning November 16

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3585, 2.16%	Bullish	Bullish
Nifty	12720, 3.72%	Neutral **	Bullish
China Shanghai Index	3310, -0.06%	Neutral	Neutral
Gold	1888, -3.25%	Bearish	Bearish
WTIC Crude	40.12, 8.02%	Bullish	Bullish
Copper	3.18, 0.90%	Bullish	Bullish
Baltic Dry Index	1115, -6.77%	Bearish	Bearish
Euro	1.1834, -0.32%	Neutral	Neutral
Dollar/Yen	104.63, 1.25%	Bullish	Bullish
Dow Transports	12085, 4.05%	Bullish	Bullish
High Yield (Bond ETF)	106.44, 0.29%	Neutral	Neutral
US 10 year Bond Yield	0.90%, 9.50%	Bearish	Bearish
NYSE Summation Index	344, 144.53%	Bullish	Neutral
US Vix	23.10, -7.08%	Bullish	Bullish
Skew	129	Neutral	Neutral
20 DMA, S and P 500	3440, Above	Bullish	Neutral
50 DMA, S and P 500	3405, Above	Bullish	Neutral
200 DMA, S and P 500	3140, Above	Bullish	Neutral
20 DMA, Nifty	12063, Above	Neutral	Bullish
50 DMA, Nifty	11710, Above	Neutral	Bullish
200 DMA, Nifty	10709, Above	Neutral	Bullish
S & P 500 P/E	36.13	Bearish	Neutral
Nifty P/E	34.57	Neutral	Bearish
India Vix	19.70, -3.88%	Neutral	Bullish
Dollar/Rupee	74.58, 0.82%	Neutral	Bearish
Overall	S & P 500	Nifty
Bullish Indications	10	12
Bearish Indications	4	4
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	UK – CPI, Eurozone – CPI, Japan - GDP
*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 and the Nifty rallied big last week. Indicators are bullish for the coming week. The epic crash signal is alive and well despite the massive upmove suggesting a major top is imminent. The moment of reckoning is upon us.  Technicals and fundamentals are about to trend bearish. The market is yet to price in one of the worst earnings decline periods in stock market history. With extremely high valuations, a November crash is on the menu following the recent weak bounce from the 50dma. Low volatility suggests complacency and more downside ahead.

We rallied 46% right after the great depressions (1930’s) first collapse and we have rallied over 65% in our most recent rally of the lows in a similar 6 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 short order. The FED is repeating the Japan experiment and the lost 3 decades in Japan (1989-2019) is set to repeat across the globe. SPX 1500 and lower by year-end 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 and we have made a major top in global equity markets. The market is looking like the short of a lifetime with non-conformations from the transports, other global indices, and commodities. High valuations continue. The breakdown in Crude 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 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 the yield curve inverts into a recession. The critical levels to watch for the week are 3595 (up) and 3575 (down) on the S & P 500 and 12800 (up) and 12650 (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 November 09

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	3509, 7.32%	Bullish	Bullish
Nifty	12264, 5.34%	Neutral **	Bullish
China Shanghai Index	3312, 2.72%	Bullish	Bullish
Gold	1952, 3.84%	Bullish	Bullish
WTIC Crude	37.46, 4.67%	Bullish	Bullish
Copper	3.15, 3.36%	Bullish	Bullish
Baltic Dry Index	1196, -6.78%	Bearish	Bearish
Euro	1.1873, 1.94%	Bullish	Bullish
Dollar/Yen	103.36, -1.22%	Bearish	Bearish
Dow Transports	11615, 4.58%	Bullish	Bullish
High Yield (Bond ETF)	106.12, 1.74%	Bullish	Bullish
US 10 year Bond Yield	0.82%, -4.48%	Bullish	Bullish
NYSE Summation Index	141, 65.63%	Bullish	Neutral
US Vix	24.86, -34.61%	Bullish	Bullish
Skew	125	Neutral	Neutral
20 DMA, S and P 500	3426, Above	Bullish	Neutral
50 DMA, S and P 500	3401, Above	Bullish	Neutral
200 DMA, S and P 500	3132, Above	Bullish	Neutral
20 DMA, Nifty	11864, Above	Neutral	Bullish
50 DMA, Nifty	11596, Above	Neutral	Bullish
200 DMA, Nifty	10697, Above	Neutral	Bullish
S & P 500 P/E	35.37	Bearish	Neutral
Nifty P/E	33.09	Neutral	Bearish
India Vix	20.50, -17.19%	Neutral	Bullish
Dollar/Rupee	73.98, -0.78%	Neutral	Bullish
Overall	S & P 500	Nifty
Bullish Indications	14	16
Bearish Indications	3	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	UK – Employment data, GDP, US – CPI, PPI
*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 and the Nifty ralled big last week. Indicators are bullish for the coming week. The epic crash signal is alive and well despite the massive upmove suggesting a major top is imminent. The moment of reckoning is upon us.  Technicals and fundamentals are trending bearish. The market is yet to price in one of the worst earnings decline periods in stock market history. With extremely high valuations, a November crash is on the menu following the recent weak bounce from the 50dma. Low volatility suggests complacency and more downside ahead.

We rallied 46% right after the great depressions (1930’s) first collapse and we have rallied over 50% in our most recent rally of the lows in a similar 6 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 short order. The FED is repeating the Japan experiment and the lost 3 decades in Japan (1989-2019) is set to repeat across the globe. SPX 1500 and lower by year-end 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 and we have made a major top in global equity markets. The market is looking like the short of a lifetime with non-conformations from the transports, other global indices, and commodities. High valuations continue. The breakdown in Crude 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 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 the yield curve inverts into a recession. The critical levels to watch for the week are 3520 (up) and 3500 (down) on the S & P 500 and 12350 (up) and 12200 (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.