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21Apr2015 Market Close: Markets Close Mixed And Quiet, Large Caps Down Along With Oil, Small Caps Ended Up 0.4 Percent In The Green

Written by Gary

Some volatility at times today, but enough to buy you a new Rolex. The trend for the session was down minutes after the opening. Started out in the green and the large caps have fallen into the red while the small caps ended up in the green fractionally.

By 4 pm the markets were relatively quiet with little closing fanfare usually associated with the last minute of trading.

What is going to happen tomorrow? I have a few thoughts.

Todays S&P 500 Chart

One of the market movers is oil. Today it was relatively volatile moving mostly down and that is something to watch closely. WTI Crude prices have slipped by around 2% from yesterday's NYMEX Close ramp highs as it appears Saudi Arabia is not willing to just let this effort to squeeze Shale stall.

The U.S. Dollar also trended down, but recovered remaining in the low 98's as investors continued to digest earnings that were largely ahead of expectations but showed little organic growth.

Railroads (AAR) traffic data, Intermodal traffic, which accounts for half of movements, is growing year-over-year - but weekly railcar counts remain in contraction. Rail traffic remains surprisingly weak.

U.S. housing starts rose far less than expected in March and permits recorded their biggest drop since last May, which could raise concerns about the economy's ability to bounce back from a soft patch hit in the first quarter.

The bottom line is that tomorrow could be another down session.

Our medium term indicators are leaning towards SELL portfolio of non-performers and the session market direction meter (for day traders) is 41 % bearish up from 7 % bullish 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 flat, but remains above zero at +5.38. 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.

Jason Furman Gets the NFP Report the Night Before the Official Release, Does Anyone Else?

Last night on Bloomberg TV, they had an interview with Jason Furman, President Obama's Chief Economist. What caught my attention was right at the beginning of the interview, with Bloomberg's Hans Nichols whereby he mentions the following to Furman: "You're the man who brings the President the jobs numbers on Thursday night, the Thursday night before everyone gets to see them." Why this came as a huge surprise to me, was that as far as I and everyone around me knew, no one except the BLS has access to the data, and that the data wasn't available till 8am on Friday morning. I remember a video in March of last year, where PBS Newshour interviewed Karen Kosanovich of the BLS, where she mentions that her and others are quarantined, and she mentions how tight the security measures are. This just makes me wonder, how is Furman getting the NFP data (email? in person?), and who else is getting it? If the Fed minutes were being leaked to congress and lobbyists, anything is possible is all I'm saying.

Bloomberg's Interview with Furman (important part is right at the beginning)

PBS Newshours Interview (important part starts at the 1 minute mark till 1:30 mark)

Generic drugmaker Teva makes $40 billion offer for rival Mylan

TEL AVIV/NEW YORK (Reuters) - Teva Pharmaceutical Industries Ltd on Tuesday made an unsolicited $40 billion offer for smaller rival Mylan NV, a bold bid for growth as its lucrative Copaxone drug faces generic competition.

March 2015 Sea Container Counts Are Not Strong Even Though the Labor Troubles Are Over

Written by Steven Hansen

The West Coast Ports labor dispute is over, and appears the backlog has been eliminated causing a spike in exports. However, not only is year-to-date volumes contracting for both imports and exports - but March exports are contracting month-over-month and year-over-year. This is indicating weak economic conditions domestically and globally.

Copper Plunge Continues Despite Chinese Stimulus

Since China unleashed its latest (and greatest since 2008) RRR cut, stock prices have surged amid the liquidity hype. However, perhaps more indicative of the underlying reality of just what good an RRR cut will do to a debt-saturated economy full of weak credits thanks to tumbling asset prices, copper prices have now plunged over 6% in the last 2 days...

But still BTFATH in Chinese stocks...

Charts: Bloomberg

Wall Street mixed as doubts about earnings offset biotech M&A bid

(Reuters) - U.S. stocks were mixed on Tuesday, with the Dow industrials pulled down by a handful of uninspiring earnings reports, while the Nasdaq was pushed higher by a proposed biotech merger.

Corporate Profits Vaporizing

Submitted by Jim Quinn via The Burning Platform blog,

Hussman has some more brilliant insights this week, which most people will ignore, because we all know he is a perma-bear who only cites facts and historical data to prove how overvalued the stock market is at this point in history. Why should we pay attention to his fact based analysis when the market is up 250 points today? But, in case someone is interested, I've picked out the key paragraphs from his weekly letter and I've bolded the sentences that make the most important points.

Hussman explains how corporations have been able to maintain record level profit margins. They've done it on the backs of taxpayers and the working class. The government transfers and increase in consumer debt (student loans & auto loans) have filled the gap of pitiful wage gains and kept corporate profits at record levels. Thank you Ben, Janet, Obama and a feckless Congress.

Elevated corporate profits since 2009 have largely reflected mirror image deficits in the household and government sectors, as households have taken on debt to maintain consumption despite historically low wages as a share of GDP, and government transfer payments have expanded to fill the gap, with 46 million Americans now on food stamps - a five-fold increase in expenditures since 2000. Essentially, corporations are selling the same volume of output, but paying a smaller share in wages, with deficits in the household and government sectors bridging the gap. As households and government have shoveled themselves further into the hole, corporate profits have climbed higher on the adjacent pile of earth. Deficits of one sector emerge as the surplus of another.

One problem with this scenario. Corporate profit margins always rever ...

Wary of brinkmanship, euro zone steers away from new deadlines for Greece, official says

BRUSSELS (Reuters) - Euro zone finance ministers will not set any deadline for Greece to come up with reforms to get more funding because such time limits lead to brinkmanship in negotiations, a senior euro zone official said on Tuesday.

A Step By Step Guide How To Crash The Entire Market

While we already noted that the CFTC and the DOJ have gone full scapegoat retard, by blaming the entire flash crash on one solitary trader (operating out of the UK no less), which means that Waddell & Reed should now sue the SEC for hundreds of millions in lost fees and defamation, it is worth re-emphasizing the hubris and the audacity that these "regulators" have, to assume that sophisticated market participants are truly dumb enough to believe any of this is just shocking.

In any event, going with the bullshit story concocted by the confused brains at the CFTC (whose former head when all this happened, is now being groomed by Hillary Clinton to be America's next Treasury Secretary), and for all those who wish to follow in the "rogue" ES trader's footsteps, here is how Navinder Singh Sarao singlehandedly crashed the entire market, leading to the single biggest loss in market capitalization in history.

From the charging document:

Defendants aggressively used both the Layering Algorithm and the 188/289-Lot Spoofmg strategies on May 6, 2010, the 2010 Flash Crash day.

Defendants first turned on the Layering Algorithm at 9:20a.m. CT, placing four orders, totaling 2,100 contracts. These orders were each one tick apart, starting three ticks from the best ask. The orders were modified 604 times over the following six minutes so the orders were always at the third level of the sell-side of the order book or deeper, and then canceled with no executions, as the La ...

U.K. speed trader arrested over role in 2010 'flash crash'

WASHINGTON (Reuters) - A high-frequency trader was arrested in the United Kingdom over charges he manipulated the futures market and played a role in sparking the May 2010 "flash crash", the U.S. Justice Department said on Tuesday.

Oil Tumbles After Saudis Declare End To Yemen Aerial Bombing Campaign

Saudi Arabia said its campaign of airstrikes in Yemen have succeeded in removing threats to the kingdom and other regional countries, bringing to an end Operation "Decisive Storm." As Bloomberg reports, the Saudi Defense Ministry said a coalition of mostly Sunni Muslim nations has "successfully eliminated the threat to the security of Saudi Arabia and neighboring countries," by destroying the heavy weaponry and ballistic missiles held by the Shiite Houthi rebels. This comes one day after Gulf envoys told The United Nations that Yemen strikes won't end soon. Saudi Arabia hopes to restart a Yemeni political process and will begin "Operation New Hope," which appears to mean Saudi National Guard ground troops.



Coalition ends Operation Decisive Storm begins Operation Restore Hope in Yemen

— Saudi Embassy (@SaudiEmbassyUSA) April 21, 2015

Oil reacts... because war is over, right?

Of course it is also settlement day so Oil liquidty is thin at best and moves exaggerated.

A Financial Crisis Veteran Tells China to Be Wary

Henry M. Paulson, Treasury secretary during the 2008 financial crisis, warns China in a new book that it will undoubtedly have to "face a reckoning."

Why Europe Lets People Drown

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

That Europe let almost 1000 people die in the Mediterranean in one night shouldn't be a surprise to anyone, at least not to those who are still occasionally awake. The Club Med migrant crisis has been going on for a long time, and the EU's only reaction to it has been to slash its budget and operations in the area, not to expand them.

So when the New York Times opens with "European leaders were confronted on Monday with a humanitarian crisis in the Mediterranean..", they're a mile and a half less than honest. Brussels has known what was going on for years, and decided to do less than nothing.

The onus was put on Italy, Malta, Greece and a handful of private compassionate activists to handle the situation, as if it was some sort of local, or even tourist, issue, while Europe's finest went back to festive gala openings of their €1 billion+ 'official' edifices, and back to forcing more austerity on member nations. Somebody has to pay for those buildings.

The EU took over rescue operations from Italy late last year and promptly cut the budget by two-thirds. Saving migrant lives was deemed just too expensive. You don't survive in European politics if you don't get your priorities straight.

On March 8, I wrote

Sabre-Rattling Soars: Poland Buys US Patriot Air Defense System, Gold Pops

Just days after Russia lifts sanctions on Iran and prepares to send its S-300 missile defense system, it appears Washington has retaliated. As TASS reports, Poland - on Russia's doorstep - has decided to buy the US Patriot air-defense system (made by Raytheon) for a total cost of around $9bn: "The US proposal has been found to be more profitable from the viewpoint of Poland's security and implementation of commitments within NATO framework." Washington, keen to ensure Warsaw signed up with Raytheon, has decided to loan Poland a battery of Patriots until the deal is signed.

As TASS reports,

Poland has chosen the supplier for its national missile defense system. According to the country's Defense Ministry, it is the US company Raytheon, the manufacturer of Patriot air defense missile systems.

"The US proposal has been found to be more profitable from the viewpoint of Poland's security and implementation of commitments within NATO framework. Patriot systems are used in several countries," the ministry said.

Taking part in the tender was the Italian-French Eurosam corporation ...

A New Dark Age: When College Doesn't Pay

Submitted by Daniel Drew via,

If you're so smart, why aren't you rich? One day, as ignorance becomes an ideal to strive for, that question might be replaced with, "If you're so dumb, why aren't you rich?"

The possibility that evolution might take a wrong turn and transform us into a society of imbeciles was dramatized in the movie Idiocracy. That process is beginning today as education is no longer rewarded. A look at the labor force participation rate for college graduates shows a steady decline since the data was first tracked.

Bachelor Degree Labor Force Participation

Getting a college degree used to mean a ticket on the upward trajectory of this thing they once called a "career." Now, your college degree guarantees you a place behind the bar counter in the McJob recovery.

Student Loans

As more college graduates become unemployed, the more the federal government picks up the tab.

Ferrero facing no succession problem, not interested in selling

MILAN (Reuters) - Italian confectionery group Ferrero is facing no succession problem after the death of its owner, Michele Ferrero, and the family owners of the Nutella empire are not interested in selling, Chairman Francesco Paolo Fulci said on Tuesday.

As Athens Runs Short of Cash, Greece and Gazprom Chief Hold Talks

The meeting came amid speculation on a possible multibillion-dollar gas pipeline deal by Athens and Moscow, which could provide Greece needed money.

Baker Hughes Cuts 17% Of Workforce As Oil Slump Ripples Through Economy

One thing we've been keen to point out whenever and wherever the occasion arises, is the vast and ridiculous discrepancy between BLS calculations of job losses in the oil & gas space and those reported by both Challenger and by the companies who are actually doing the firing. Through February for instance, the government reckoned that around 3,000 jobs had been lost this year in oil & gas exploration and extraction. That figure was just a "shade" lower than the 40,000 reported by Challenger:

Fast forward to the beginning of April when, in "Dear Texas, Welcome To The Recession," we drew attention to the following rather ominous graphic which shows that the state which has until recently served as the country's post-crisis job creation engine has suffered from 47,000 layoffs YTD, or more than three times the number of job cuts posted by the next closest state:

Finally, in "Job Cuts In Industries â€'Closely Related' To Oil Likely To Triple," we highlighted data from Goldman which shows that in past oil downturns, layoffs in sectors related to ...

BofA Is Confusing Liquidity Fueled And Secular Bull Markets

Submitted by Lance Roberts via STA Wealth Management,

Over the past couple of years, there has been a growing chorus of individuals claiming that the financial markets have finally shaken the shackles of the secular bear market that began at the turn of the century. This, of course, suggests that the markets have now begun the next long-term secular bull market.

The following chart, via Crestmont Research, is a quick primer if you are unfamiliar with secular, or long-term, periods in the financial markets.


Bank of America is the latest to jump onto the "new secular bull market" bandwagon with the following piece of analysis.


As of late, more strategists are beginning to argue that 2009 was a "generational low point" and that the markets are currently in the middle pha ...

China's Economy Puts New Pressure on a Changing Job Market

With its lopsided pockets of supply and demand and decline in agriculture jobs, China's huge manufacturing sector is showing new signs of stress.

Greece May Sign Russia Gas Deal As Soon As Today

It appears that Herr Schaeuble will be left in the cold as following comments from the Greek energy minister that a deal is coming "soon," it is being reported that:


According to Gazprom's CEO comments on Greek TV, following his meeting with Greek PM Tsipras, Russia will guarantee 47BCM/YR of gas via Greece with the link to be built by a Russian-European group at a cost of around €2 billion.

First, talks with Russia on extension into Greece of Turkish Stream pipeline are positive, will continue with aim of concluding "soon," Greek Energy Minister Panagiotis Lafazanis says in comments broadcast live on state-run Nerit TV.


Then RIA reports,







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