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19May2015 Market Update: DOW Hits New High, Averages Mostly Sea-Saw On Unchanged Line, Small Caps In The Red

Written by Gary

The averages opened higher then slipped into the red, sea-sawing back and forth on or near the unchanged line. Oil is testing its support and the US dollar is testing its resistance, something is about to break with the bulls and bears just about even in their predictions.


Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.03%, while Brazil's Bovespa is off 1.85%. Shares in U.S. are unchanged with the S&P 500 at 2,129.01.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 63%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 66%
Investors Intelligence sets the breath Above 50 bullish 58.1%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +16.23
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 63.26%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 63.07%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 63.60%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.48
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 76.94
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,216

http://tickersense.typepad.com/

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street little changed, held back by Wal-Mart

(Reuters) - U.S. stocks were little changed on Tuesday, constrained by Wal-Mart's weak results and as investors took a breather after a rally that took the Dow Jones industrial average and the S&P 500 to record closing highs the previous day.

Europe dampens Greek hopes of swift deal as clock ticks

ATHENS/BRUSSELS (Reuters) - Greece's European lenders on Tuesday played down Athens's hopes of a swift end to negotiations on an aid agreement and said talks must speed up before the country runs out of cash.

Euro Slumps, Stocks Surge

The euro slumped against the U.S. dollar, while European stocks and bonds surged on the prospect of the European Central Bank ramping up its asset-purchase program in May and June.

April 2015 Thumbtack Small Business Sentiment Improves

by Thumbtack

The Thumbtack Small Business Sentiment Survey, a first-of-its-kind survey that captures the economic sentiment of more than 10,000 small businesses nationwide shows that small business sentiment has risen 5 points (out of a scale of 100) over the last year. Today marks the inaugural release of this survey which will be updated monthly.

Read more ...

As Chinese Stocks Rise, Beijing Wins

The biggest beneficiary of China's stock-market rally has been the government.

Shanghai Stock Exchange Planning Startup Market

The Shanghai Stock Exchange is on track to launch a new market for small, innovative companies that will challenge the successful Nasdaq-style startup board in Shenzhen.

Anthem CFO says insurer could make 'meaningful' acquisition

(Reuters) - The financial chief of Anthem Inc , the second-largest U.S. health insurer, said on Tuesday that low interest rates and other conditions make it a good time for an acquisition, adding to speculation about merger activity in the sector.

Wal-Mart sales miss expectations as shoppers pocket savings

(Reuters) - Wal-Mart Stores Inc on Tuesday became the latest U.S. retailer to report weaker-than-expected quarterly sales, saying consumers were pocketing tax refunds and savings from cheaper gasoline rather than buying unnecessary items.

Home Depot profit beats amid U.S. housing recovery

(Reuters) - Home Depot Inc reported higher-than-expected quarterly profit and sales on Tuesday and raised its full-year earnings forecast as North American customers spent more on home repairs after a harsh winter.

Aston Martin eyeing U.S. for crossover SUV production: report

DETROIT (Reuters) - Aston Martin will decide whether add production at another plant by the end of the year and it would likely be in the United States, the British luxury sports car maker's chief executive told Automotive News.

Commodity Carnage

The surge in the USDollar and "good" housing data has created carnage in commodities. Silver, crude, copper, and gold are all getting hammered this morning as the S&P is unchanged as moar Q€ was trumped by hawkish "good" data...

Crude in particular has broken convincingly below the $59.50 support level...

Charts: Bloomberg

The European Central Planning Bank Unhappy With Analysts' Euro Forecasts

Things are getting more surreal by the moment. First the ECB leaks material, market moving information to hedge funds 12 hours before disclosing it to the entire world, and now the central bank that has taken central planning to the next level, is revealing its displeasure with how the quote unquote "market" has responded to the Euro. Via BBG:


PRAET: SOME ANALYST FORECASTS ON THE EURO'S DEPRECIATION HAD GONE BEYOND WHAT ECB EXPECTED: WSJ

Oddly no comment if the ECB's stealthy selling of Bunds to open up capacity for 15 more months of purchases also moved the massively illqiuid market too far in the opposite direction.

One thing is certain: the ECB will never complain about the analysts' forecasts that the Stoxx 600 will keep rising to recorder highs: that is not only what the ECB had expected, but what its trading desk over at the BIS traded.

Bits Blog: Some People Do More Than Text While Driving

Texting while driving has company. Some people are also using social media services, taking selfies, and even making videos while they are behind the wheel.

Merck Could Struggle to Hit Health Care Heights

The German company is pinning its hopes on successfully developing a new cancer treatment in alliance with Pfizer. That puts it in a very competitive field.

Spot The Housing Starts Outlier

Earlier today, housing starts shocked to the upside when they printed at 1.135MM, smashing estimates of 1.015MM, and representing the single biggest monthly jump since 1991. The entire surge was due to one single number.

As can be seen on the chart below, the last time single-family housing starts in the Northeast soared as much as they did in was in June 2008, just before the financial system nearly collapsed.

And in the case the outlier is still not quite obvious, here is the data since the start of the depression (which has so far been papered over with $22 trillion in central bank "asset" holdings) zoomed in:

Bottom line: the April surge was the offset of the February plunge, which suggests a renormalization of the trend once the recent volatile data renormalizes. Unless, of course, it rains in the spring when the San Fran Fed's double seasonal adjustments may be inevitable.

U.K. Deflation More Curiosity Than Concern

Falling prices in the U.K. are a testament to how weak global inflationary forces are.

Pernod prepares to take Cuban-made rum to the United States

HAVANA/PARIS (Reuters) - French drinks giant Pernod Ricard is poised to sell its Cuban-made rum in the United States once a 53-year-old trade embargo is lifted, going head-to-head with Cuban-founded Bacardi which dominates the world's biggest market.

Oil prices slip on dollar rally, ample supply

LONDON (Reuters) - Brent crude oil fell below $66 a barrel on Tuesday as the dollar strengthened and on evidence of ample supplies of Middle Eastern oil despite wars in northern Iraq, Syria and Yemen.

Wall St. Is Mixed as Oil Declines Once More

Walmart's stock took a beating after the company reported flat sales and a drop in profit.

ECB Blames Leak To Hedge Funds On "Internal Procedural Error"

Shortly after 6pm London time yesterday, The ECB's Benoit Coeure told a non-public audience of hedge funds in London that "the central bank would moderately front-load its purchases in its quantitative easing program because of the seasonal lack of market liquidity in the summer." The reaction was a 50 pips drop in EURUSD... but this was inside information was not released to the trading public until around 8am London time - and resulted in a 150 pip plunge.

Translation: as we pointed out with the usual dose of sarcasm observing just how rigged everything has become, a select private group of head funds in London were leaked ECB front-loading news 14 hours before The ECB deemed it 'correct' to publicly release the comments...

In his speech, Mr. Coeuré said that the ECB is aware of seasonal patterns in the bond market and that there is generally less liquidity on the market from mid-July to August.

"The Eurosystem is taking this into account in the implementation of its expanded asset purchase program by moderately front loading its purchase activity in May and June," he said.

Crucial news for anyone, but as The Wall Street Journ ...

This Is Central Planning: A "World Of Activist Central Banks" Who "Manage Price Levels In Markets"

Remember when news, fundamentals, ungoalseeked "data", and even math, mattered? Since it is becoming increasingly hazy, here is Bloomberg's Richard Breslow waxing nostalgic over the good old days.

Cui Bono, by Richard Breslow

The bad news is that we are investing in a world where Graham and Dodd's "Security Analysis" has become a quaint relic of simpler times, when the nuts and bolts of a company's fundamental were meant to motivate how analysts viewed its prospects. Now we have QE and buybacks.

We live in a world where good Keynesians Tobin and Brainard's work on valuation (which led to Tobin's q test) was meant to remind investors that markets needed to be grounded in some form of reality. (Interestingly, as an aside, William Brainard was strongly in favor of Janet Yellen being appointed to the Fed Chair). Today we read that equities are at all-time highs because weak economic numbers may keep the Fed on hold longer. The good news is that investing is a lot easier if you have central banks on your side

Central bankers admit they follow the markets, as they should. What has evolved in this world of activist central banks as proxy sovereign wealth funds are policy makers who watch, care and try to manage price levels in markets, rather than managing liquidity and continuous pricing.

Front-running mutual funds used to be something of a skill and art. Front-running central banks merely requires not losing sight of the bigger picture and managing your positions. Oddly enough, skill at the latter is what old-fashioned traders, who are in the process of being killed off by boxes, were actually most prized for.

In today's world, negative rates are argued to be realistic. Markets that go up 100% in a year are prescient. Markets that go down are described as killing wealth, not, perhaps, normalizing in the face of better numbers. Economists ...

Markets Are Jumpy Over Coming Leap Second

Traders and exchange officials are prepping for the latest incidence when a seemingly innocuous time change, the coming leap second, could potentially cause havoc to markets if systems aren't made ready.

Investors cut U.S. equity exposure to lowest since January '08: survey

LONDON (Reuters) - International investors slashed their exposure to U.S. equities in May to its lowest in over seven years, while maintaining the euro zone as their leading stock market destination, a closely watched survey said on Tuesday.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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