Market Signals For The US Stock Market And Indian Stock Market - Monday, Dec. 10

The S&P 500 and the Nifty fell last week. Indicators are mixed for the upcoming week. The oversold bounce in global markets has likely stalled out near the declining 200 DMA’s and the 50 week moving averages that were violated for the first time in two years will likely act as strong resistance going forward. The trend is changing from bullish to bearish. Looking for significant underperformance in the Nifty going forward on rapidly deteriorating macros. A 5-year bear market is about to start in key asset classes like the Euro, stocks, and commodities amidst a number of bearish divergences and Hindenburg Omens. We are on the verge of a multi-year deflationary collapse. 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. Tail risk has been very high off late. The critical levels to watch for the week are 2645 (up) and 2620 (down) on the S&P 500 and 10800 (up) and 10600 (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.

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

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