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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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Sunday 5 November 2017

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning November 06

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2588, 0.26%
Neutral
Neutral
Nifty
10453, 1.25%
Bullish **
Bullish
China Shanghai Index
3372, -1.32%
Bearish
Bearish
Gold
1270, -0.20%
Neutral
Neutral
WTIC Crude
55.64, 3.23%
Bullish
Bullish
Copper
3.12, 0.45%
Neutral
Neutral
Baltic Dry Index
1496, -3.23%
Bearish
Bearish
Euro
1.1607, -0.02%
Neutral
Neutral
Dollar/Yen
114.06, 0.35%
Neutral
Neutral
Dow Transports
9755, -1.78%
Bearish
Bearish
High Yield (ETF)
37.00, -0.16%
Neutral
Neutral
US 10 year Bond Yield
2.34%, -3.50%
Bullish
Bullish
Nyse Summation Index
606, -17.22%
Bearish
Neutral
US Vix
9.14, -6.73%
Bullish
Bullish
Skew
130
Neutral
Neutral
20 DMA, S and P 500
2565, Above
Bullish
Neutral
50 DMA, S and P 500
2522, Above
Bullish
Neutral
200 DMA, S and P 500
2426, Above
Bullish
Neutral
20 DMA, Nifty
10221, Above
Neutral
Bullish
50 DMA, Nifty
10056, Above
Neutral
Bullish
200 DMA, Nifty
9509, Above
Neutral
Bullish
India Vix
11.91, 3.79%
Neutral
Bearish
Dollar/Rupee
64.66, -0.34%
Neutral
Neutral


Overall


S & P 500


Nifty

Bullish Indications
6

7
Bearish Indications
4
4
Outlook
Bullish
Bullish
Observation
The S and P 500 and the Nifty made new highs last week. Indicators are bullish.
The market is topping. Time to tighten those stops.
On the Horizon
New Zealand – Rate decision, Australia – Rate decision, UK – Manufacturing production, U.S – Oil inventories, Canada – PMI
*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 november 06


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. The critical levels to watch are 2600 (up) and 2575(down) on the S & P and 10500 (up) and 10400 (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.