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Ahead of the Curve provides you with 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 includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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Showing posts with label nifty. Show all posts
Showing posts with label nifty. Show all posts

Monday 18 March 2024

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

 

Asset Class

Weekly Level / Change

Implication for S & P 500

Implication for Nifty*

S & P 500

5117, -0.13%

Neutral

Neutral

Nifty

22023, -2.09%

Neutral **

Bearish

China Shanghai Index

3055, 0.28%

Neutral

Neutral

Gold

2159, -1.19%

Bearish

Bearish

WTIC Crude

80.58, 3.29%

Bullish

Bullish

Copper

4.12, 5.90%

Bullish

Bullish

CRB Index

285, 2.90%

Bullish

Bullish

Baltic Dry Index

2374, 1.24%

Bullish

Bullish

Euro

1.0888, -0.45%

Neutral

Neutral

Dollar/Yen

149.07, 1.36%

Bullish

Bullish

Dow Transports

15499, -1.40%

Bearish

Bearish

Corporate Bonds (ETF)

107.83, -1.09%

Bearish

Bearish

High Yield Bonds (ETF)

94.35, -0.37%

Neutral

Neutral

US 10-year Bond Yield

4.31%, 5.47%

Bearish

Bearish

NYSE Summation Index

787, 4%

Bullish

Neutral

US Vix

14.41, -2.24%

Bullish

Bullish

Skew

139

Neutral

Neutral

CNN Fear & Greed Index

Greed

Bearish

Bearish

20 DMA, S & P 500

5096, Above

Bullish

Neutral

50 DMA, S & P 500

4963, Above

Bullish

Neutral

200 DMA, S & P 500

4576, Above

Bullish

Neutral

20 DMA, Nifty

22200, Below

Neutral

Bearish

50 DMA, Nifty

21894, Above

Neutral

Bullish

200 DMA, Nifty

20227, Above

Neutral

Bullish

S & P 500 P/E

27.77

Bearish

Neutral

Nifty P/E

22.74

Neutral

Bearish

India Vix

13.69, 0.57%

Neutral

Bearish

Dollar/Rupee

82.89, 0.18%

Neutral

Neutral

 

 

Overall

 

 

S & P 500

 

 

Nifty

 

Bullish Indications

8

8

Bearish Indications

6

9

 

Outlook

Bullish

Bearish

Observation

 

The S&P was unchanged while the Nifty fell last week. Indicators are mixed for the week.

Markets are topping. Watch those stops.

On the Horizon

Eurozone – CPI, UK CPI, BOE rate decision, US – FOMC rate decision, Japan BOJ rate decision

*Nifty

 

India’s Benchmark Stock Market Index

Raw Data

Data courtesy stockcharts.com, investing.com, multpl.com, nseindia.com

**Neutral

Changes less than 0.5% are considered neutral

 


The S&P 500 was unchanged and the Nifty fell last week. Indicators are mixed for the week. Markets are topping. We are transitioning from an inflationary regime to a deflationary collapse. The Nifty has started to correct and will likely underperform. We are way overbought short-term and are overdue a pullback here to as low as the 50 DMA, as we embrace bearish seasonality.

The past week saw US equity markets little changed. Most emerging markets were unchanged, as interest rates rose. Transports fell. The Baltic dry index rose. The dollar rose. Commodities rose sharply. Valuations continue to be quite expensive, market breadth improved, and the sentiment is now exuberant. Fear fell this week, as a possible reality check from an immediate FED Pivot loom.

After this rally, a currency crisis should resume and push risky assets to new lows across the board. Deflation is in the air despite the recent inflationary spike 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 across the board, as earnings growth peaks.

The Fed has aggressively tightened into a recession. Deflationary busts often begin after major inflationary scares. The market has rebounded after correcting significantly, and more is left on the downside. The Dollar, commodities, and bond yields are continuing to flash major warning signs.

The epic correction signal occurred with retail, hedge funds, and speculators all in, in January 2022, suggesting a major top is in. The moment of reckoning is here. With extremely high valuations, a crash is on the menu. Low volatility suggests complacency and downside ahead.

Global yield curves have inverted significantly reflecting a major upcoming recessionThe 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 5130 (up) and 5105 (down) on the S&P 500 and 22100 (up) and 21950 (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 yet again and will likely prove to be a sell on every rise. Gold is increasingly looking like the asset class to own over the next decade. (Gold exploded almost 8 times higher over the decade following the dot-com bust in 2000, just 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.

 

 

Monday 11 March 2024

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning March 11

 

Asset Class

Weekly Level / Change

Implication for S & P 500

Implication for Nifty*

S & P 500

5124, -0.26%

Neutral

Neutral

Nifty

22494, 0.51%

Neutral **

Bullish

China Shanghai Index

3046, 0.63%

Bullish

Bullish

Gold

2186, 4.32%

Bullish

Bullish

WTIC Crude

77.85, -2.65%

Bearish

Bearish

Copper

3.89, 0.76%

Bullish

Bullish

CRB Index

277, -0.18%

Neutral

Neutral

Baltic Dry Index

2345, 6.45%

Bullish

Bullish

Euro

1.0938, 0.93%

Bullish

Bullish

Dollar/Yen

147.07, -2.03%

Bearish

Bearish

Dow Transports

15718, -0.72%

Bearish

Bearish

Corporate Bonds (ETF)

109.02, 1.02%

Bullish

Bullish

High Yield Bonds (ETF)

94.69, 0.30%

Neutral

Neutral

US 10-year Bond Yield

4.08%, -2.59%

Bullish

Bullish

NYSE Summation Index

759, 9%

Bullish

Neutral

US Vix

14.74, 12.43%

Bearish

Bearish

Skew

141

Bearish

Bearish

CNN Fear & Greed Index

Greed

Bearish

Bearish

20 DMA, S & P 500

5061, Above

Bullish

Neutral

50 DMA, S & P 500

4924, Above

Bullish

Neutral

200 DMA, S & P 500

4551, Above

Bullish

Neutral

20 DMA, Nifty

22103, Above

Neutral

Bullish

50 DMA, Nifty

21849, Above

Neutral

Bullish

200 DMA, Nifty

20130, Above

Neutral

Bullish

S & P 500 P/E

27.81

Bearish

Neutral

Nifty P/E

23.22

Neutral

Bearish

India Vix

13.61, -9.20%

Neutral

Bullish

Dollar/Rupee

82.75, -0.11%

Neutral

Neutral

 

 

Overall

 

 

S & P 500

 

 

Nifty

 

Bullish Indications

11

12

Bearish Indications

7

7

 

Outlook

Bullish

Bullish

Observation

 

The S&P was unchanged and the Nifty rose last week. Indicators are bullish for the week.

Markets are topping. Watch those stops.

On the Horizon

Eurozone – German CPI, UK GDP, US – CPI, PPI, Japan GDP

*Nifty

 

India’s Benchmark Stock Market Index

Raw Data

Data courtesy stockcharts.com, investing.com, multpl.com, nseindia.com

**Neutral

Changes less than 0.5% are considered neutral

 


The S&P 500 was unchanged and the Nifty rose last week. Indicators are bullish for the week. Markets are topping. We are transitioning from an inflationary regime to a deflationary collapse. The Nifty has started to correct and will likely underperform. We are way overbought short-term and are overdue a pullback here to as low as the 50 DMA soon, as we embrace bearish seasonality.

The past week saw US equity markets little changed. Most emerging markets rose, as interest rates fell. Transports fell. The Baltic dry index rose. The dollar fell. Commodities were unchanged. Valuations continue to be quite expensive, market breadth improved, and the sentiment is now exuberant. Fear rose this week, as a possible reality check from an immediate FED Pivot loom.

After this rally, a currency crisis should resume and push risky assets to new lows across the board. Deflation is in the air despite the recent inflationary spike 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 across the board, as earnings growth peaks.

The Fed has aggressively tightened into a recession. Deflationary busts often begin after major inflationary scares. The market has rebounded after correcting significantly, and more is left on the downside. The Dollar, commodities, and bond yields are continuing to flash major warning signs.

The epic correction signal occurred with retail, hedge funds, and speculators all in, in January 2022, suggesting a major top is in. The moment of reckoning is here. With extremely high valuations, a crash is on the menu. Low volatility suggests complacency and downside ahead.

Global yield curves have inverted significantly reflecting a major upcoming recessionThe 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 5135 (up) and 5110 (down) on the S&P 500 and 22550 (up) and 22400 (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 yet again and will likely prove to be a sell on every rise. Gold is increasingly looking like the asset class to own over the next decade. (Gold exploded almost 8 times higher over the decade following the dot-com bust in 2000, just 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.

 

 

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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.