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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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Definition of a Recession: The textbook definition of a recession is two quarters of negative GDP growth. Some examples of recessions in...

Sunday, 20 May 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 21

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2713, -0.54%
Bearish
Bearish
Nifty
10596, -1.94%
Neutral **
Bearish
China Shanghai Index
3193, 0.95%
Bullish
Bullish
Gold
1291, -2.23%
Bearish
Bearish
WTIC Crude
71.37, 0.95%
Bullish
Bullish
Copper
3.06, -1.54%
Bearish
Bearish
Baltic Dry Index
1305, -10.19%
Bearish
Bearish
Euro
1.1783, -1.37%
Bearish
Bearish
Dollar/Yen
110.77, 1.35%
Bullish
Bullish
Dow Transports
10731, 0.16%
Neutral
Neutral
High Yield (ETF)
35.66, -0.42%
Neutral
Neutral
US 10 year Bond Yield
3.07%, 3.23%
Bearish
Bearish
Nyse Summation Index
417, 33.11%
Bullish
Neutral
US Vix
13.42, 6.09%
Bearish
Bearish
Skew
133
Neutral
Neutral
20 DMA, S and P 500
2680, Above
Bullish
Neutral
50 DMA, S and P 500
2678, Above
Bullish
Neutral
200 DMA, S and P 500
2628, Above
Bullish
Neutral
20 DMA, Nifty
10686, Below
Neutral
Bearish
50 DMA, Nifty
10453, Above
Neutral
Bullish
200 DMA, Nifty
10324, Above
Neutral
Bullish
India Vix
14.15, 1.23%
Neutral
Bearish
Dollar/Rupee
67.98, 0.88%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
7
5
Bearish Indications
7
11
Outlook
Neutral
Bearish
Observation
The S and P 500 and the Nifty fell last week. Indicators are mixed.
The markets have made important tops. Time to watch those stops.
On the Horizon
UK- CPI, Retail sales, GDP, Euro – German GDP, German PMI, German IFO business climate index, ECB meeting minutes, U.S – Home sales, Crude oil inventories, Powell Speech, FOMC meeting minutes, Durable goods
*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 may 21


The S and P 500 and the Nifty fell last week. Indicators are mixed for the upcoming week. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. The yield spike and dollar strength should limit upside in the short term. The critical levels to watch are 2725 (up) and 2700 (down) on the S & P and 10700 (up) and 10500 (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, 16 May 2018

Mid Week Market Insight

Global risk are piling up off late. Whether it be surging US bond yields or the surging dollar that has arisen out of a collapsing Euro following the Italian elections, risks to global asset classes are on the rise. The prospects for a waterfall decline similar to 1987 are fast rising. Here is your mid week market insight on these topics from some of the best asset managers, market commentators, financial analysts and CMT's of today:

Sunday, 13 May 2018

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning May 14

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2728, 2.41%
Bullish
Bullish
Nifty
10807, 1.77%
Neutral **
Bullish
China Shanghai Index
3163, 2.34%
Bullish
Bullish
Gold
1321, 0.46%
Neutral
Neutral
WTIC Crude
70.70, 1.41%
Bullish
Bullish
Copper
3.11, 0.84%
Bullish
Bullish
Baltic Dry Index
1453, 5.60%
Bullish
Bullish
Euro
1.1947, -0.20%
Neutral
Neutral
Dollar/Yen
109.30, 0.19%
Neutral
Neutral
Dow Transports
10714, 3.31%
Bullish
Bullish
High Yield (ETF)
35.81, 0.28%
Neutral
Neutral
US 10 year Bond Yield
2.97%, 0.92%
Bearish
Bearish
Nyse Summation Index
313, 88.55%
Bullish
Neutral
US Vix
12.65, -14.35%
Bullish
Bullish
Skew
129
Neutral
Neutral
20 DMA, S and P 500
2673, Above
Bullish
Neutral
50 DMA, S and P 500
2678, Above
Bullish
Neutral
200 DMA, S and P 500
2622, Above
Bullish
Neutral
20 DMA, Nifty
10637, Above
Neutral
Bullish
50 DMA, Nifty
10422, Above
Neutral
Bullish
200 DMA, Nifty
10305, Above
Neutral
Bullish
India Vix
13.98, 5.49%
Neutral
Bearish
Dollar/Rupee
67.39, 0.87%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
10
11
Bearish Indications
1
3
Outlook
Bullish
Bullish
Observation
The S and P 500 and the Nifty rallied last week. Indicators are bullish.
The markets have made important tops. Time to watch those stops.
On the Horizon
Australia – RBA meeting minutes, Employment data, China – Industrial production, Japan GDP, UK- Employment data, Euro – German GDP, German ZEW Economic sentiment, Draghi speech, CPI, U.S – Retail sales,   Crude oil inventories, Canada – CPI, Retail sales   
*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 may 14

The S and P 500 and the Nifty rallied last week. Indicators are bullish for the upcoming week. Quantitative tightening by the FED is yet to be priced in fully. The markets are still trading well over 3 standard deviations above their long term averages from which corrections usually result. The critical levels to watch are 2740 (up) and 2715 (down) on the S & P and 10900 (up) and 10700 (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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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.