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12May2015 Market Update: Averages Off Fractionally, Volume Low, Trading Sideways As Investors Are Waiting For Other Shoe To Drop

Written by Gary

Markets open lower as expected, falling for the second straight session, then climbed somewhat towards the unchanged line, twice, and currently easing back from a weak interim support level.

Investors are very worried amid a global bond sell-off, concerns over Greece's perilous financial situation, and now waiting for the other shoe to fall.

Here is the current market situation from CNN Money

North and South American markets are mixed. The Bovespa is higher by 0.05%, while the IPC is leading the S&P 500 lower. They are down 0.39% and 0.27% respectively.

Oil has moved upwards all morning nearing a resistance, while the U.S. Dollar has dropped into a major support zone and both are testing - well, sort of. The volume is so low I doubt that anyone except the HFT algo computers are trading and expect to see more sideways and volatile trading sessions.

Traders are waiting for two forecasting agencies to release closely watched reports before deciding to jump ship.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 64%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 53%
Investors Intelligence sets the breath Above 50 bullish 57.5% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -25.27 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 59.33% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 62.30% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 63.80% 10 Year Treasury Note Yield Index ($TNX) ten year note index value

22.41 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 76.14 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11.108

What Is Moving the Markets

Here are the headlines moving the markets.

FDIC Chief: Big Bank Failure Won't Imperil System

FDIC Chairman Martin Gruenberg says U.S. regulators can safely guide a major financial firm to failure without taxpayer bailouts or catastrophic consequences for the financial system.

U.S. Stocks Pare Losses

U.S. stocks pared steep losses to trade slightly lower Tuesday following a selloff in European equities and government bonds.

Wage growth may be on tap as more Americans quit jobs

SAN FRANCISCO (Reuters) - Americans are becoming more apt to quit their jobs, a government report showed on Tuesday, a sign that a stronger labor market and falling unemployment rate could result in healthier wage growth and inflation.

Is This Company's 42% Surge In The Past Week Confirmation That Grexit Is Imminent?

In the last 4 days, a little-known paper company from Canada (that we have discussed previously) has seen its stock soar over 40%.

Fortress Paper (and its wholly-owned subsidiary, Landqart AG, a leading manufacturer of banknote and security papers) announced at the peak of the 2012 European financial crisis that it has a material bank note order reinstated which sent the stock soaring and represented a clear indication of the possibility of Grexit, Spexit, or Itexit at the time. This time, the stock is soaring with no news yet - though we already know that Drachma designs have been created - and everyone involved in the EU deliberations is preparing for a parallel currency.

* * *

As we noted previously, this could be the simplest hedge against a disorderly Grexit that is available.

* * *

And the 6 banknotes (designed by Paul Vatikioti) of 50, 100, 200, 500,

U.S. 10-Year Bond Yield at 6-Month High

A drop in Treasury bonds sent the yield on the benchmark 10-year note to a six-month high, following a rout in German government bonds.

Verizon to buy AOL in $4.4 billion mobile video push

(Reuters) - Verizon Communications Inc said on Tuesday it will buy AOL Inc for $4.4 billion, turning the biggest U.S. wireless carrier into a leading provider of content and video for the web and mobile phones.

Manic-Selling Becomes Panic-Buying As Stocks, Bonds Rip Into The Green

"impressive" manic-depressive?

As the machines run stops to the Payrolls print...

And bond yields take the stairs higher and elevator down...

But did the v-shaped recovery just run out of stop-running steam?

Charts: Bloomberg

Exclusive: Greece tapped its emergency IMF reserves to pay IMF debt - sources

ATHENS (Reuters) - Greece emptied an emergency IMF holding account to repay 750 million euros ($839 million) due to the international lender, a Greek central bank official said, avoiding default but underscoring the dire state of the country's finances.

Ranchers Beef Up Cattle Herds

For the first time in nearly a decade, ranchers in the heart of cattle country are expanding their herds, betting that a recent break in a multiyear drought will persist.

Labor Department Finally Notices The Jobs Bloodbath In Texas: Midwest "Discharges" Surge To 4 Year High

Both in February and in March, in the aftermath of the total collapse in energy-related jobs in Texas, we had a simple, if recurring, question for the Bureau of Labor "Statistcs":

Did The BLS Forget To Count Thousands Of Energy Job Losses?


Did The BLS Again Forget To Count The Tens Of Thousands Of Energy Job Losses?

The answer was Yes and Yes.

However, we are delighted that in the latest monthly JOLTs report, the BLS has finally noticed the bloodbath for highly-paid energy jobs which, as we showed just last week courtesy of Challenger Gray data, is unprecedented and compares to the devastation in the aftermath of the Lehman collapse, namely this.

So what did JOLTs notice?

It wasn't that job openings - the category most pay attention to in the JOLTS report - not only missed consensus expectations by over 100K, but tumbled from 5.144MM to 4.994MM, the biggest drop since September of 2014...

March 2015 JOLTS Predicts a Slightly Slower Jobs Growth Rate

Written by Steven Hansen

The BLS Job Openings and Labor Turnover Survey (JOLTS) can be used as a predictor of future jobs growth, and the predictive elements show that the year-over-year unadjusted private non-farm job opening growth rate declined modestly. The jobs growth rate predicted remains above average for times of expansion. The problem with this data series is the backward revisions which makes real time analysis problematic.

Read more ...

Is This Why Greek ATMs Are Empty?

As ekathimerini reports,

Police have launched a manhunt for a 45-year-old man from Crete who is suspected of robbing 540,000 euros from the security firm at which he worked.

The father of two is believed to have made off with a bundle of cash either on Saturday night or Sunday morning from the firm's offices in the area of Katsamba. The firm was responsible for cash transfers between banks and supplying automatic transaction machines.

His family claims that they have no idea of his whereabouts, while authorities are investigating the possibility that he has left the country.

* * *

One wonders if he was working for Varoufakis, scraping together every item of cash to fund today's IMF payment?

Infinity And The Bond Market Wormhole

Some well-timed observations from Bloomberg's Richard Breslow.

Infinity And The Bond Market Wormhole

The infinite loop continues.

Central banks ease, cajole, fluff up their feathers and push markets to where they don't belong. Markets try to reprice themselves closer to normalcy (sanity). Central banks see their main equity index fall and panic. Central bank pushes more chips in and everyone has to cover. Central banks declare victory. Smart investor sells.

It is so utterly appropriate that in the definition of infinite loop on Wiki it is pointed out that a synonym is "unproductive loop."

Like any table stakes game, running out of wherewithal is a killer. What if the other player doesn't value the keys to your car? It certainly feels that way when debating how clever it would be to juice inflationary expectations by increasing the inflation target, which will ignite the animal spirits of the economy, even though (wink, wink) we will pull back before it becomes a problem.

Another conceit being floated -- by the same central bankers who get night sweats thinking about the day after they raise rates some nominal amount -- is that their communication strategy has been so straight-forward and consistent that surely markets and the banks are on the same page.

Yes, it will be a "regime change," but surely we are all seeing and evaluating the data the same way. That is code for, we don't have a clue either, but we desperately can't threaten the wealth effect of higher equity prices. This supposed wealth effect is used to celebrate (see a chart of Chinese equitie ...

Thales chairman-elect Proglio quits in spat over Russian interests

PARIS (Reuters) - Henri Proglio gave up the chairmanship of defense group Thales on Tuesday, bringing into the open a simmering row with Economy Minister Emmanuel Macron over the veteran French businessman's Russian interests.

Second Largest Coal Miner East Of The Mississippi Files For Bankruptcy: 4000 Patriot Coal Jobs In Peril

At last check Patriot Coal had around 4000 employees. Those soon to be former employees will soon require yet another massive seasonal adjustment by the BLS to be "adjusted" out, because moments ago the second largest coal miner east of the Mississippi and the second largest producer of thermal coal in the eastern US filed Chapter 11 bankruptcy.

As part of its filing, the Peabody spinoff announced it had obtained a $100 million DIP, which will be sued to fund the company until it finds a "strategic buyer" or otherwise restructures its balance sheet. Alas, with the price of coal being where it is these days, the most likely outcome for ticker formerly known as PCX is an outright liquidation and another 4000 people in the rest belt left without jobs who, just like the case of Denny Ryder of Decatur, IL, will promptly disappear from the labor force so as not to spoil the US "recovery" propaganda.

Full Patriot Coal bankruptcy filing statement:

Patriot Coal Corporation ("Patriot" or "the Company"), a producer and marketer of coal in the eastern United States, today announced that it is engaged in active negotiations for the sale of substantially all of the Company's operating assets to a strategic partner. The Company is also engaged in ongoing discussions with key stakeholders as it evaluates a range of strategic alternatives to maximize the value of its assets.

In conjunction with these activities, Patriot and its wholly-owned subsidiaries today filed voluntary petitions for restructuring under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Vir ...

April 2015 Small Business Optimism Strengthens but Remains Below Historical Average

Econintersect: The National Federation of Independent Business (NFIB)'s optimism index rose from 95.2 to 96.9. The market was expecting the index between 93.5 to 96.5 with consensus at 96.0. But this still leaves the Index below its historical average, oscillating between 95 and 98 but never breaking out except for December, when the Index just tipped past 100, only to fall again.

Read more ...

US Equities Give Up All "Goldilocks" Jobs Data Gains

What's the opposite of 'Goldilocks'?

Markets In Turmoil - When Carry Unwinds

When risk-free assets, with de minimus regulatory capital requirements move like penny stocks, firms are forced to do something about economic risk capital - either derisk (sell assets), or increase capital (delever carry). The ongoing carnage in the world's bond market is creating just such a self-fulfilling problem for risk-assets everywhere (despite simpleton hopes that bond-selling means stock-buying - it doesn't as the marginal buyer is all repo/carry funded and not 'real' cash being rotated). Everywhere one looks, financial markets are turmoiling...



The Dollar...


Charts: Bloombe ...

Hong Kong Hedge Fund Azentus Gets Smaller

One of Hong Kong's most high-profile hedge-fund managers, Azentus Capital Management Ltd., has shrunk to a shadow of its former self after investors withdrew nearly $500 million this spring in the wake of mediocre performance.

Pimco's Pressure on Allianz's Profits

A change is as good as a rest, they say. But too much change is just hard work. Ask Allianz.

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