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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 stock market blogs india. Show all posts
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Sunday 23 August 2020

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning August 24


Indicator

Weekly Level / Change

Implication for

S & P 500

Implication for Nifty*

S & P 500

3397, 0.72%

Bullish

Bullish

Nifty

11372, 1.73%

Neutral **

Bullish

China Shanghai Index

3381, 0.61%

Bullish

Bullish

Gold

1948, -0.11%

Neutral

Neutral

WTIC Crude

42.30, 0.69%

Bullish

Bullish

Copper

2.93, 2.33%

Bullish

Bullish

Baltic Dry Index

1518, -4.83%

Bearish

Bearish

Euro

1.1796, -0.38%

Neutral

Neutral

Dollar/Yen

105.82, -0.73%

Bearish

Bearish

Dow Transports

10941, -0.17%

Neutral

Neutral

High Yield (Bond ETF)

105.13, 0.72%

Bullish

Bullish

US 10 year Bond Yield

0.64%, -10.75%

Bullish

Bullish

Nyse Summation Index

803, -12.85%

Neutral

Bearish

US Vix

22.54, 2.22%

Bearish

Bearish

Skew

147

Bearish

Bearish

20 DMA, S and P 500

3331, Above

Bullish

Neutral

50 DMA, S and P 500

3221, Above

Bullish

Neutral

200 DMA, S and P 500

3074, Above

Bullish

Neutral

20 DMA, Nifty

11221, Above

Neutral

Bullish

50 DMA, Nifty

10832, Above

Neutral

Bullish

200 DMA, Nifty

10831, Above

Neutral

Bullish

S & P 500 P/E

29.20

Bearish

Neutral

Nifty P/E

32.08

Neutral

Bearish

India Vix

19.94, -8.01%

Neutral

Bullish

Dollar/Rupee

74.92, 0.06%

Neutral

Neutral

 

 

Overall

 

 

S & P 500

 

 

Nifty

 

Bullish Indications

9

11

Bearish Indications

5

6

Outlook

Bullish

Bullish

Observation

The S and P and the Nifty were up last week. Indicators are bullish for the week.

The markets have begun a great depression style collapse. Watch those stops.

On the Horizon

Euro Zone – German GDP, US – 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 500 and the Nifty rallied last week. Indicators are bullish for the coming week. The recent rally to the prior highs is on borrowed time as we experience one of the worst earnings decline period in stock market history with extremely high valuations amid a lot of bearish divergences. 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 2700 area is emerging on the S and P, and 9000 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 2050, scary? The markets are very close to an epic melt down 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 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 3410 (up) and 3385 (down) on the S & P 500 and 11450 (up) and 11300 (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.

Wednesday 29 April 2015

Strangle Strategy for a Volatile Nifty Post the Fed Announcement Tonight

Volatility in the market has been surging of late with the India Vix eclipsing the 20 level of late. I expect this to continue post the fed. A strangle can help capture market volatility on either side.

Nifty Current Spot: 8280
CNX NIFTY (^NSEI)
8300 April Call - 35
8200 April put -19
Break even = 54
Break even points -8354, 8146
You make money on either side of 8146, 8354
You loose money if market stays between the above two levels.

Thursday 23 April 2015

Is the Rupee sending a warning signal to the stock market?

The last time there was significant Rupee weakness was back in August 2013 when the Nifty crashed closed to 20% led by bank stocks that crashed over 30%. Fast forward to today and significant Rupee weakness has started to re-emerge with the Rupee recently breaching the 64 level.
USD/INR (INR=X)
This has yet again caused bank stocks to underperform with the bank nifty down close to 10% from recent highs and further under performance is likely if the Rupee sells off further.
BANK NIFTY (^NSEBANK)
This would also prevent rates from coming down in the short term which is not good for the overall economy and the stock market.
CNX NIFTY (^NSEI)
Recently Indian stock stock market volatility has significantly exceeded US stock market volatility with the India vix crossing 19, yet another warning sign.

The stage appears to be set for significant equity underperformance in 2015.

Monday 13 April 2015

Update on Nifty Strangle, Time to Book Profits

I had highlighted the Nifty 8400-8800 strangle at 95 in an earlier post.
http://rajveersmarketviews.blogspot.in/2015/04/option-trading-strategy-indian-market.html
As of Now
Nifty - Current Spot - 8823
CNX NIFTY (^NSEI)
Nifty 8400 Put - 15
Nifty 8800 Call - 135
Total -150
Profit -55%
Time to book profits!

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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.