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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 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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Sunday, 28 January 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning January 29

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2873, 2.23%
Bullish
Bullish
Nifty
11070, 1.71%
Neutral **
Bullish
China Shanghai Index
3558, 2.01%
Bullish
Bullish
Gold
1352, 1.43%
Bullish
Bullish
WTIC Crude
66.14, 4.47%
Bullish
Bullish
Copper
3.20, 0.36%
Neutral
Neutral
Baltic Dry Index
1217, 6.85%
Bullish
Bullish
Euro
1.2427, 1.67%
Bullish
Bullish
Dollar/Yen
108.64, -1.97%
Bearish
Bearish
Dow Transports
11126, -1.59%
Bearish
Bearish
High Yield (ETF)
36.92, 0.27%
Neutral
Neutral
US 10 year Bond Yield
2.66%, 0.95%
Bearish
Bearish
Nyse Summation Index
692, 1.53%
Bullish
Neutral
US Vix
11.08, -1.69%
Bullish
Bullish
Skew
118
Neutral
Neutral
20 DMA, S and P 500
2772, Above
Bullish
Neutral
50 DMA, S and P 500
2691, Above
Bullish
Neutral
200 DMA, S and P 500
2521, Above
Bullish
Neutral
20 DMA, Nifty
10714, Above
Neutral
Bullish
50 DMA, Nifty
10475, Above
Neutral
Bullish
200 DMA, Nifty
9968, Above
Neutral
Bullish
India Vix
17.51, 25.21%
Neutral
Bearish
Dollar/Rupee
63.64, -0.33%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
11
11
Bearish Indications
3
4
Outlook
Bullish
Bullish
Observation
The S and P 500 and the Nifty made new highs last week. Indicators are bullish.
The markets have gone parabolic. Time to watch those stops.
On the Horizon
Australia – CPI, China – PMI, Euro Zone – CPI, German employment data, UK – Carney speech, PMI, U.S – Consumer confidence, Oil inventories, Home sales, FOMC rate decision, Employment data, PMI, Canada – GDP, India – Union Budget
*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

stock market signals january 29


The S and P 500 and the Nifty made new highs last week. Signals are bullish for the upcoming week. Quantitative tightening by the FED is yet to be priced in and sentiment indicators are back in complacency mode. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. Divergences in high yield, transports and surging bond yields are flashing some warning signs. An interest rate shock can’t be ruled out. The critical levels to watch are 2885 (up) and 2860(down) on the S & P and 11150 (up) and 11000 (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. 

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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.