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19Mar2015 Market Update: Averages Continue To Trend Down On Falling Volume, Oil Is Trending Down Slowly And The U.S. Dollar Trading Sideways

Written by Gary

The averages have given up some of their gains from yesterday and the U.S. Dollar has climbed again after its horrific 'crash' yesterday after the Fed's FMOC statement.

Oil on the other hand is taking its time to reset, but its trend is downward. By mid-session the small caps were in the green and the DOW was off triple digits once again.

So can we call today's session normal or is this downturn a trend in the making?


Here is the Market Open from CNN Money

North and South American markets are mixed. The Bovespa is higher by 1.32%, while the IPC is leading the S&P 500 lower. They are down 0.81% and 0.59% respectively.

Markets normally show a consolidation or at least reverse course fractionally, after a session has risen significantly as we witnessed yesterday. In the FMOC statement, the Fed removed the word 'patience' and for a number reasons, the bulls went wild pushing the markets up, even when the overall financial news remains 'not so good' or at least not 'robust'. Today, we see the markets moving towards a re-balancing and we could very well see the averages advance higher to at least 'test' its previous highs in the next few sessions - maybe.

Whether or not we will see new highs is being discussed by analysts on both sides and the bulls seem to wining the argument of the markets reaching higher numbers as the February 2015 Leading Economic Index shows improvement but may also be indicating slower growth

But both side agree that a 'correction' is in the works and could happen at any time. The volume is steadily falling this afternoon, the trend remains down and the averages are becoming quiet once again, this time ahead of the Greek showdown tomorrow. Oil is still on the 'hot' list of declining commodities providing a real-time direction of the equities and should be watched as oil could trigger the previously remarks concerning a market correction.

Without a doubt the markets are within a 'wait and see' region of investor uncertainty.

WTI oil is at 45.03 falling from morning highs of 46.08 (Chart Here), Brent has fallen to 54.33 from it high of 56.83 (Chart Here), and the U.S. Dollar is regaining lost ground now at 99.56, up from its low at 94.87 (Chart Here).

Our medium term indicators are leaning towards Hold portfolio of non-performers and the session market direction meter (for day traders) is 98 % Bearish up from 36 % bearish at the opening bell. We remain mostly conservatively bullish, but with a bearish slant. I am very concerned any downtrend could get very aggressive in the short-term and any volatility may also promote sudden reversals that will only please the day traders. The SP500 MACD has turned up, but remains above zero at +1.53. It is expect to move up over the next few sessions before turning back down.

Having some cash on hand now is not a bad strategy as negative market changes are happening everyday. Many investors are starting to take in some profits from 'high-fliers' as a precaution and to build a better cash base for the 'dips'.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 62
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 42
Investors Intelligence sets the breath Above 50 bullish 57.9%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +11.65
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 57.06
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 61.35
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71.00
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 19.79
StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 76.02
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,924

What Is Moving the Markets

Here are the headlines moving the markets.

BNY Mellon nears $700-plus million forex cases settlement - source

(Reuters) - Bank of New York Mellon Corp is nearing an agreement to pay just over $700 million to settle allegations that the bank overcharged pension funds and other clients for foreign exchange services, according to a person familiar with the probe.

U.S. judge dismisses lawsuit over $13 billion JPMorgan Chase settlement

WASHINGTON (Reuters) - A U.S. federal judge tossed out a lawsuit brought by non-profit group Better Markets that sought to block a $13 billion settlement JPMorgan Chase & Co reached with the U.S. Justice Department over shoddy mortgage loans sold to investors before the financial crisis.

Philly Fed Signals Worst Margin Compression Since Lehman

With markets pricing in nothing but a "permanent plateau of margins," it appears the Philly Fed is about to ruin that meme too... Thanks to the collapse of the Prices Received (and Prices Paid) indices, margins are now implicitly the lowest since Lehman. The last 2 times "margins" were this low, the US entered recession.

Prices Paid Collapse...

But Prices Received Collapse-er...

Leaving the worst "margin" since Lehman...

Charts: Bloomberg

Scotiabank sues Cliffs Natural for breach of loan terms

(Reuters) - Canada's Bank of Nova Scotia sued Cliffs Natural Resources Inc , saying the U.S. iron ore miner had breached terms of a loan agreement when it filed for creditor protection for its Canadian operations.

Oil falls back on dollar, Kuwait stance that OPEC won't slow output

NEW YORK (Reuters) - Oil prices fell on Thursday as a rebounding dollar and Kuwait's stance that OPEC had no choice but to keep producing in an oversupplied market undercut a rally from the previous day.

US Dollar Recovers All FOMC Jawbone Losses, EUR Plunges 400 Pips

With EURUSD now down over 400 pips from the after-hours flash-crash last night, the US Dollar has recovered all of ist post-FOMC and post-flash-crash losses...

led by EUR weakness...

As it seems the life of Fed jawboning effort is now less than 24 hours...

Charts: Bloomberg

Patrick McDarby, Sport Logo Designer, Is Dead at 57

Mr. McDarby's designs included images for Major League Soccer, the New York Rangers, the Jacksonville Jaguars and the Villanova Wildcats.

As Europe Closes, Stocks Are Slipping, Commodities Are Ripping

As we cross into the European close, commodity markets are surging higher led by Copper and Silver. This is happening as the US Dollar strengthens and stocks leak to the lows of the day...

and from this morning's cash open...

Wall Street pulls back after Fed rally as energy drags

NEW YORK (Reuters) - U.S. stocks fell on Thursday as energy shares slumped, with the broad S&P 500 handing back some gains from the prior session sparked by a policy statement from the Federal Reserve that was more dovish than expected.

Target agrees to pay $10 million to settle lawsuit from data breach

WASHINGTON (Reuters) - Target Corp has agreed to pay $10 million in a proposed settlement of a class-action lawsuit related to a huge 2013 data breach that consumers say compromised their personal financial information, court documents show.

After Pillaging Pensions, Greece Raids Utilities To Repay Troika; Bonds Plunge As Bank Run Accelerates

Following yesterday's news that the ECB is now running simulations on what a Grexit would mean for Greek bond prices (spoiler alert:
"fundamentals" suggest a 95% loss), overnight we got more confirmation that Mario Draghi continues to tighten the screws on the Greek sovereign corpse, when Bloomberg reported that the ECB once again raised the maximum amount of emergency liquidity available to Greek lenders by €400 million, but less than the Greek central bank requested, people familiar with the decision said.

The increase was approved by the ECB's Governing Council on Wednesday, the people said, asking not to be identified as the council meeting was private. Greece requested about 900 million euros, one of the people said. The increase should take ELA to about 70 billion euros. Policy makers raised the limit by 600 million euros on March 12, after a boost by 500 million euros to 68.8 billion euros on March 5. Greek banks haven't used all their ELA and have a total of about 3 billion euros in liquidity available, one of the people said.

However, not a single penny from this additional emergency "liquidity" would enter the economy, as all of it was merely provided to offset the ever faster Greek bank run because as Reuters reported, on Wednesday Greek banks saw deposit outflows of €300 million, the highest in a single day since a February deal with the euro zone that staved off ...

U.S. Jobless Claims Up Slightly; Weather Hurts Factory Activity

The number of Americans filing new claims for unemployment benefits rose marginally last week, indicating the labor market remained on solid footing despite slowing economic growth.

U.S. jobless claims up slightly; weather hurts factory activity

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits rose marginally last week, indicating the labor market remained on solid footing despite slowing economic growth.

Life Insurance Error Gives Investors Bernie Madoff Style Returns

Via Dark-Bid blog,

Sometimes those perks for wealthy clients can be the downfall of your entire institution.

In 1987, Aviva France started offering The Fixed Price Arbitrage Life Insurance Contract for wealthy clients. The Financial Times called it "the worst contract in the world". It allows the contract holder to invest with hindsight. Did you see a stock go up this week? Now you can buy it at last week's price. Did your stock plummet? Sell it at last week's price. It is the ultimate form of insider trading: time travel.

Is it legal? Yes, according to French courts, Aviva France is bound by its contract.

In 1987, market information was not as instantaneous as it is today. Trade processing times were slower, and fund values were not published frequently like they are now. Giving clients last week's prices was just a way to speed things up. Now, the contracts are still speeding things up - except this time, it's the speed of money being drained away from Aviva France.

At age 7, Max-Herve George received this contract as a gift from his father. An expert at Paris District Court confirmed that the contract allowed him to achieve annual gains of 68% per year. In 2007, the family's investments were worth 10 million euros. Numbers after 2007 are not available, but it is impossible to lose because you can discard all losing investments at last week's prices.

Once the insurance company realized their grievous error, they offered to replace the policies for 10 pounds. Thousands of idiot investors, oblivious to the benefits of hindsight investing, signed away their golden tickets. George refused.

De-Dollarization Accelerates As More Of Washington's "Allies" Defect To China-Led Bank

The global de-dollarization trend continues as it appears the UK's move to join the China-led Asian Infrastructure Development Bank has indeed shown other US "allies" that spurning Washington's advice is actually acceptable and concerns about the institution's "standards" may simply be a diversion aimed at undermining China's attempt to exercise more influence in its own backyard. Here's more from the NY Times:

Ignoring direct pleas from the Obama administration, Europe's biggest economies have declared their desire to become founding members of a new Chinese-led Asian investment bank that the United States views as a rival to the World Bank and other institutions set up at the height of American power after World War II.

The announcement on Tuesday by Germany, France and Italy that they would follow Britain and join the Chinese-led venture delivered a stinging rebuke to Washington from some of its closest allies. It also called into question whether the World Bank and the International Monetary Fund, which grew out of a multination conference in Bretton Woods, N.H., in 1944 and established an economic pecking order that lasted 70 years, will find their influence diminished.

The announcement by Germany, Europe's largest economy, came only six days after Secretary of State John Kerry asked his German counterpart, Frank Walter-Steinmeier, to resist the Chinese overtures until the Chinese agreed to a number of conditions about transparency a ...

Sony's PlayStation Vue Is Introduced in 3 Cities

The web-based service, targeted at gamers, is initially available to PlayStation 3 and PlayStation 4 owners in New York, Chicago and Philadelphia.

Financials Give Up All Fed-Fueled Gains, Energy Stocks Battered

Who could have seen that coming? Energy stocks are collapsing as crude gives up all its gains and the hopes and dreams of all the NIM-earning banks are dashed on the shores of disastrous data and patient-er Fed...

We're gonna need another FOMC meeting...

Charts: Bloomberg

February 2015 Leading Economic Index Improves But May Be Indicating Slower Growth

Written by Steven Hansen

The Conference Board Leading Economic Index (LEI) for the U.S. improved again this month - and the authors believe this index is showing more moderate growth.

Read more ...

Apple Watch Stopped? TAG Heuer Unveils Smartwatch Partnership With Google

On the day that Apple joins the Dow (and juices its volatility), it is a good job analysts have something else to focus on (the TV un-bundling plan) because Apple Watch just found a new 'old' competitor to deal with. As Bloomberg reports, Swiss watchmaker TAG Heuer is creating a smartwatch in partnership with American technology firm Google. While TAG is the first traditional watchmaker to pair with Google, the partnership could open the door to other collaborations with high-end brands owned by LVMH, including Hublot and Zenith. Would you rather - $10,000 iWatch, $10,000 TAG?

As Bloomberg reports,

Swiss watchmaker TAG Heuer is creating a smartwatch in partnership with American technology firm Google. The watch is an attempt to compete with devices by consumer-electronics makers, particularly the much-hyped watch by Apple. While TAG is the first traditional watchmaker to pair with Google, the partnership could open the door to other collaborations with high-end brands owned by LVMH, including Hublot and Zenith. One of the questions raised by Apple's $10,000 gold smartwatch is whether users will consider it a luxury item, and wear it for status as well as convenience.

...

The number of Swiss watch brands adding electronic features has blossomed since Apple joined the battle for customers' wrists. Swatch, Breitling, Montblanc, and Freder ...

Fed Signals It May Increase Interest Rates by Midyear

Dropping its promise to remain "patient" on a rate move, the central bank expressed optimism that the economy no longer needs quite as much help, while acknowledging that growth has slowed and inflation declined.

Tag Heuer, Intel challenge Apple with Android smartwatch

BASEL, Switzerland (Reuters) - Tag Heuer, French luxury group LVMH's biggest watch maker, said it will launch a smartwatch later this year using Google Inc's Android operating system in a venture with Intel Corp to compete head-on with the Apple Watch.

March 2015 Philly Fed Manufacturing Survey Unchanged But Continues to Suggest Weak Growth.

Written by Steven Hansen

The Philly Fed Business Outlook Survey growth was statistically unchanged and continues to suggest weaker growth. Consider however that this is the thirteenth month in a row of expansion - even though the expansion was weaker or stronger in any particular month. Key elements were mixed. This survey came in under expectations.

Read more ...

Christie Administration Deal With Exxon Was Years in the Making

The seeds for New Jersey state officials' controversial decision to settle a long-running environmental pollution case for $225 million were planted as early as summer 2012.

Fed to soon propose debt rule for bank emergency plans: Tarullo

WASHINGTON (Reuters) - The Federal Reserve is expected to issue a new rule in the coming months involving a long-term debt requirement for banks' emergency plans, a top Fed official said on Thursday.

Philly Fed Suffers Worst Run In 3 Years, All Sub-Indices Collapse

Philly Fed hasn't missed for 4 months in a row since Feb 2012. Printing at 5 (against expectations of 7) the March Philly Fed data is the weakest since Feb 2014. Under the covers it was even uglier... Employees, Average Workweek, New Orders, Prices Received, and Shipments all plunged. Great news for the stock market bulls... yet another dismally bad data item to keep The Fed from hiking.

Every sub-index weakened dramatically...



Shipments lowest since Sept 2012

Average Workweek worst since March 2013

Prices Paid Collapse...

Prices received Collapse-er...

Not pre ...

EU to tell Greece time, patience running out

BRUSSELS/BERLIN (Reuters) - Euro zone leaders will tell Greece on Thursday that time and patience are running out for its leftist-led government to implement agreed reforms to avert a looming cash crunch that could force it out of the single currency.

Wall Street Opens Lower, Giving Back Some Gains

The dollar was volatile after the Federal Reserve signaled it would lift interest rates more slowly than expected.

Volvo could oust CEO as time runs down on profit push-report

STOCKHOLM (Reuters) - After almost four years at the helm of truck maker Volvo and with time running out on showing the boon from cost cuts, chief executive Olof Persson may soon be heading for the exit, Swedish business daily Dagens Industri reported.

Silver and Gold: Shelter From the Storm

.........Submitted and written by Gary Christenson - The Deviant Investor

What storm? The stock and bond markets in the US are doing great, the media has sold the strong employment story, and all those nasty wars are far, far away.

So the top few percent are doing well and are sheltered from the storm, but what about the rest of us? What storms are pounding us?



Currencies are based on debt, and those dollars, yen, and euros are created every day to keep various financial bubbles inflated. Global debt is $200 Trillion and cannot be repaid except with deeply devalued currencies. Central banks are creating currencies, monetizing debt, reducing interest rates, and frantically promoting inflation to avoid deflation.



Inflationary forces are powerful. Huge devaluation of our currencies is occurring. This extends the illusion of exponential growth and diminishes the debt hardship. Most of what we need, such as food, energy, and health care will cost more every year.



Deflationary forces are also powerful. What happens when a few $Trillion of sovereign debt defaults and triggers many more $Trillion in derivative payouts â€" that might cause a chain of bankruptcies? Expect deflation in our bubble assets.

What will central bankers and politicians do? Extend and pretend, print currencies, create far more debt, and fabricate stories about how everything is good.

Look at the US national debt for the past 40 years. The exponential trend is clear â€" up 9% per year on average and about 10% per year since the 2008 recession/depression. It will rise until congress drastically cuts spending (just kidding)

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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