Market Signals For The US Stock Market And Indian Stock Market - Monday, Apr. 26

The recent global virus epidemic (black swan) has dented global GDP significantly and will usher in depression much faster than most think. The trend is about to change from bullish to bearish and the markets are about to get smashed by a rebounding dollar. Looking for significant underperformance 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 several bearish divergences and overstretched 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 of late as interest rates are about to plunge yet again reflecting a major recession. The critical levels to watch for the week are 4190 (up) and 4170 (down) on the S&P 500 and 14400 (up) and 14250 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets. The NiftyShanghai composite, gold, and bonds are on Ichimoku daily sell signals while the Dollar and S&P 500 are on Ichimoku daily buy signals so some things got to give. High beta / P/E is about to get torched soon (despite the bullish consensus emerging)Gold will likely prove to be the best asset class in the next 5 years.

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Disclaimer: The views expressed here are my own and must not be taken as advice to buy or sell securities.

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