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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 22 October 2017

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning October 23

Indicator
Weekly Level / Change
Implication for
S & P 500
Implication for Nifty*
S & P 500
2575, 0.86%
Bullish
Bullish
Nifty
10147, -0.21%
Neutral **
Neutral
China Shanghai Index
3379, -0.35%
Neutral
Neutral
Gold
1281, -1.85%
Bearish
Bearish
WTIC Crude
51.84, 0.76%
Bullish
Bullish
Copper
3.17, 1.02%
Bullish
Bullish
Baltic Dry Index
1582, 8.50%
Bullish
Bullish
Euro
1.1785, -0.30%
Neutral
Neutral
Dollar/Yen
113.47, 1.44%
Bullish
Bullish
Dow Transports
9972, 0.36%
Neutral
Neutral
High Yield (ETF)
37.32, 0.38%
Neutral
Neutral
US 10 year Bond Yield
2.38%, 4.43%
Bearish
Bearish
Nyse Summation Index
892, -3.84%
Bearish
Neutral
US Vix
9.97, 3.75%
Bearish
Bearish
Skew
149
Bearish
Bearish
20 DMA, S and P 500
2540, Above
Bullish
Neutral
50 DMA, S and P 500
2497, Above
Bullish
Neutral
200 DMA, S and P 500
2411, Above
Bullish
Neutral
20 DMA, Nifty
9992, Above
Neutral
Bullish
50 DMA, Nifty
9957, Above
Neutral
Bullish
200 DMA, Nifty
9405, Above
Neutral
Bullish
India Vix
12.40, 9.64%
Neutral
Bearish
Dollar/Rupee
65.11, 0.63%
Neutral
Bearish


Overall


S & P 500


Nifty

Bullish Indications
8

8
Bearish Indications
5
6
Outlook
Bullish
Bullish
Observation
The S and P 500 made new highs and the Nifty fell slightly last week. Indicators are bullish.
The market is topping. Time to tighten those stops.
On the Horizon
New Zealand – Employment data, Australia - CPI, UK – GDP, Euro zone – German PMI, German IFO Index, ECB rate decision, Russia – Rate decision, U.S – Durable goods, New and pending home sales, Oil inventories, GDP, Canada – Rate decision, Poloz speech
*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 october 23


The S and P 500 made new highs and the Nifty fell slightly 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 2585 (up) and 2565(down) on the S & P and 10250 (up) and 10050 (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.