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14Apr2015 Market Close: Large Caps Close In The Green, Mostly Very Low Afternoon Volume, Oil Trending Higher

Written by Gary

Afternoon trading has been slow with volume approaching anemic levels at times. Trading has been consistently horizontal throughout the afternoon session resulting is a quiet day for traders after this mornings tumultuous morning.

By 4 pm the averages were mixed with the small caps clearly in the red and at the opposite end of the trading spectrum the large caps remained elevated and distinctly in the green.

Todays S&P 500 Chart

Crude oil futures rose today on signs of falling U.S. oil production, weakness in the dollar and escalating tensions in the Middle East, particularly Yemen.

WTI oil is at 53.20 falling from morning highs of 53.70 (Chart Here), Brent has fallen to 59.79 from its high of 60.41 (Chart Here), and the U.S. Dollar has lost ground now at 99.02 but slowly trending upwards, down from its high at 99.97 (Chart Here).

Our medium term indicators are leaning towards SELL portfolio of non-performers and the session market direction meter (for day traders) is 44 % bullish up from 6 % bearish this morning. 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 +3.66. Watch the WTI oil prices as anything below $50 will be the first sign of a declining market in the works. Below $44 you had better put on your seat belt as the encroaching roller coaster ride may be be very bumpy.

Having some cash on hand now is not a bad strategy as negative market changes are happening everyday, 99% of them are minor, it is that 1% I am worried about. 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'.

The Market in Perspective

Here are the headlines moving the markets.

Dow, S&P 500 end up with energy; Nasdaq dips

NEW YORK (Reuters) - The Dow and S&P 500 ended higher on Tuesday, helped by energy stocks and March-quarter earnings reports that topped modest expectations, but the Nasdaq closed lower.

March 2015 Small Business Optimism Declined. All Ten Components of this Index Weakened

Econintersect: The National Federation of Independent Business (NFIB)'s optimism index fell from 98.0 to 95.2. The market was expecting the index between 97.0 to 95.2 with consensus at 98.2. Small business optimism is now at the lowest reading since June of last year.

Read more ...

Active Managers' Underperformance Is A One In 130,000 Years Event

Submitted by Salil Mehta of the American Stat. Assoc. Editorial Board

Active fund managers don't seem to be getting a break now, especially since their performance hasn't measured up for more than a decade. This article continues to clarify this indefensibly calamitous position they are in. We shed new light on how one can mathematically verify how weak these investment managers are, by also using more conservative statistics measures and more closely considering the selection of solid benchmarks themselves. S&P Dow Jones, in concert with CRSP, recently produced an annual table showing active security managers' performance relative to their respective benchmarks. They also highlight a variety of decomposition diagnostics. Last weekend the New York Times also ran an appealing column on this, primarily focused on how the portion of portfolio managers who underperformed their benchmark was nearly ¾. And this statistic was fairly homogeneous across different time frames, ranging up to 10 years. Digging into these statistics further though, we see some intriguing ways to use probabil ...

Economic Scene: An Environmentalist Call to Look Past Sustainable Development

An "eco-modernist" strategy that argues against "sustainable development" will require more intensive use of land, and more energy.

Deal Professor: Fight Over Wynn Resorts Overshadows Question of Management

For shareholders, the conflict between Stephen Wynn and his former wife obscures the broader issue of a company being dominated by an individual.

Four Fed banks call for discount rate hike: minutes

WASHINGTON (Reuters) - Four regional Federal Reserve banks pushed to convince the central bank to raise the rate it charges commercial banks for emergency loans, meeting minutes released on Tuesday showed.

Summing Up The Financial Mainstream Media In 1 Cartoon

Presented with no comment...


Retirement Savings Protection Rules Are Unveiled by U.S.

The rules would eliminate some loopholes that allow brokers to avoid acting as fiduciaries when providing advice on retirement accounts like 401(k)'s.

Bakken Shale Oil Well Output Drops To Lowest Since 2009

In addition to the EIA's amusing oil price forecast, which as noted previously leaves quite a bit to be desired considering it was a year ago that the EIA completely failed to anticipate the plunge in crude prices, which have collapsed far below its worst case estimate...

... there is another more substantial problem with the EIA predicting a consistent increase in oil output for the next 25 years.

That something is revealed when looking at the most recent Bakken shale production data, which earlier today revealed yet another month of declining total output, which after peaking in December is at 1.2 million barrels per day, as can be seen on the chart below.

However, it is not the total output, but the productivity of any given well that is troubling. As can also be seen on the chart below, the output per Bakken well has tumbled to 3,410, down from the 3862 recorded the month before, and the lowest since early 2009.

To be sure, there is a seasonal component to the February well output drop, which includes maintenance and other February factors, however, the magnitude of the monthly drop was ...

Oil rises on U.S. output dips, Middle East tensions

NEW YORK (Reuters) - Crude oil futures rose on Tuesday on signs of falling U.S. oil production, weakness in the dollar and tensions in the Middle East, particularly Yemen.

Aggregate Demand and Secular Stagnation

Six years after the US economic contraction ended, the Federal Reserve has still not raised interest rates. Inflation has not accelerated as so many predicted. The economy is chugging along in an irregular fashion. The US economy appears to have ground to a near halt in Q1 15.

Lawrence Summers pulled together various elements that had identified this as the new normal. He drew on the work of Alvin Hansen, who in the 1930s suggested a secular stagnation. Just as Hansen sketched his argument on the eve of a new expansion in the US so too did Summers. Summer's proposed his secular stagnation hypothesis in November 2013. After a mostly weather-induced contraction in Q1 14, the US economy grew a 4.8% annualized clip between April and September, the fastest in over a decade.

Summers identified the problem as one of chronic under-investment. This leads to falling per capita incomes and stagnant demand. This would generate politically unacceptably high levels of unemployment. This has been avoided with the creation of serial asset bubbles His solution is to boost public investment, through deficit financing.

While the US sorely needs greater public investment, it is not clear that this is will address the problems Summers identifies. The key issue is how to spur aggregate demand. The public works programs of the New Deal, which Summers seems to hearken back to without citing them per se, was coupled with another set of policies that is all too often ignored in this discussions. Over the last 30-40 years, private sector unions have been gutted. The New Deal facilitated stronger unions.

Few observers, including Summers, link the disparity of wealth and income to the weakness in aggregate demand. And even fewer see the link between this condition and the weakness of precisely those organizations whose raison d'etre is reducing the ...

Sketch Guy: Financial Prescriptions Shouldn't Be Taken Lightly

As we do with physical health, we should ask questions to gauge our needs before accepting plans for our financial lives.

Exclusive: U.S. Senate Banking panel launches new investigative team

WASHINGTON (Reuters) - The U.S. Senate Banking Committee has set up an investigative team in recent weeks that will probe issues ranging from financial regulation to insurance fraud, part of a drive by its new chairman to beef up the panel's oversight function.

Q1 GDP Expectations Are Crashing

In just six short months, expectations for US economic growth in Q1 2015 has been slashed by more than half (from 'trend' 3% to a mere 1.4% growth this week). While consensus is still well above the Atlanta Fed's 0.1% forecast, the sell-side is rapidly being forced to admit it's not just the weather...

GDP growth is collapsing...

and the bounces in forward earnings and US macro data are stalling once again...

Courtesy of @Not_Jim_Cramer, Spot The Hockey-Stick...

Spot the stick

— Not Jim Cramer (@Not_Jim_Cramer) April 14, 2015

Chart: Bloomberg

Avon exploring sale of North America business: WSJ

(Reuters) - Avon Products Inc , a direct seller of cosmetics, is exploring strategic alternatives, which could include a sale of its North America business, the Wall Street Journal reported on Tuesday.

How Much Water Does The Energy Sector Use?

Submitted by Nick Cunningham via,

Water and energy have a symbiotic relationship. Energy is needed to move water to people and businesses. Water, in turn, is necessary to produce energy.

Of course, different types of energy require varying levels of water use. Take electricity generation as an example. For the United States, electricity generation in 2014 came from the following sources: 38 percent from coal, 27 percent from natural gas, 19.5 percent from nuclear, 6 percent from hydropower, close to 7 percent from non-hydro renewables, and the remainder from a collection of smaller sources.

But those sources of electricity use water at very different rates. The chart below, using data from a new report from the U.S. Geological Survey, details how water intensive electricity generation is, measured in liters of water needed to generate one kilowatt-hour of electricity.

One significant factor that determines the ultimate volume of water a power plant needs is its cooling system. Most conventional power plants use either a "once-through" system or a cooling "tower." A once-through system pulls water from a river or a lake, cycles the water through the power plant to help generate electricity, and then discharges it back into the environment. In contrast, a tower recirculates the water instead of discharging it. But towers end up using 30 to 70 percent more water be ...

Retail Sales Rose in March After 3 Months of Decline

Producer prices rose as well, but are still down 0.8 percent for the last year.

Bits Blog: IBM Creates Watson Health to Analyze Medical Data

The business unit will partner with companies including Apple, Medtronic and Johnson & Johnson, offering IBM's Watson technology as a cloud-based tool at many levels of the health care industry.

J.C. Penney says executive inadvertently disclosed same-store sales

(Reuters) - Department store chain J.C. Penney Co Inc said on Tuesday that a senior executive inadvertently disclosed its same-store sales for the first quarter so far to an analyst.

Vladimir Putin Is World's Most Influential Person Americans Say

Last month we highlighted a Reuters poll which showed that when it comes to who Americans perceive as a threat to the country, President Obama and Russian President Vladimir Putin are neck and neck with 20% of respondents indicating they view Putin as an imminent threat versus 18% for Obama. Of course it wasn't all bad: far more Americans still see ISIS as a bigger threat than the President.

Against this backdrop we present the results of the TIME 100 reader's poll in which readers pick the 100 most influential people on the planet. As far as our readers are concerned, it will come as no surprise who topped the list.

Russian President Vladimir Putin is the winner of this year's TIME 100 reader's poll.

Putin edged out rapper-singer CL (of the South Korean girl-group 2NE1) to claim the number one spot with 6.95% of the votes in the final tally. Pop stars Lady Gaga, Rihanna and Taylor Swift rounded out the top five with 2.6%, 1.9% and 1.8% of the votes, respectively.

The TIME 100 is an annual list of the 100 most influential people in the world, spanning politics, entertainment, business, technology, science, religion and other fields. Chosen by the editors of TIME, this year's list will be unveiled April 16. Voting for the reader's poll closed April 10.

Besides Putin, the only non-entertainers to crack the top 10 were the Dalai Lama (1.7%), Malala Yousafzai (1.6%) and Pope Francis. (1.5%). Barack and Michelle Obama sat just outside the top 10 with 1.4% and 1.2% of the votes, respectively.< ...

Exclusive: Ford plans $2.5 billion investment in Mexico - sources

(Reuters) - Ford Motor Co on Friday will announce an investment of about $2.5 billion in Mexico, industry sources said, the latest multibillion-dollar outlay in the country's booming auto sector.

Crude Dips After EIA Forecasts Increased Oil Production For A Decade

The EIA's annual energy outlook has something for everyone as it attempts to forecast energy markets out to 2040. For the bears, US crude oil production is expected to rise (even more than they had forecast last year - before the price collapse) as it seems, according to EIA the only thing more stimulative for oil production than high prices is low prices. For the bulls, EIA exuberantly forecasts prices soaring to over $240 by 2040 in a high growth environment. Crude prices are dipping modestly from their ramp highs.

Production will keep rising...

As Reuters notes,

The U.S. government on Tuesday forecast domestic crude production will rise even more than expected a year ago, undeterred by the worst price rout since the financial crisis.

U.S. crude oil production will peak at 10.6 million barrels per day in 2020, a million barrels more than the high forecast a year earlier, according to the annual energy outlook by the Energy Information Administration, the statistical arm of the U.S. Energy Department.

Crude production will then moderate to 9.4 million bpd in 2040, 26 percent more than expected a year ago, the agency said.

The reference case in the report forecasts Brent prices of $56 a barrel in 2015, rising to about $91 a barrel in 2025, $10 a barrel less than levels expected a year ago. The report uses th ...

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