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08Jun2015 Market Update: Midday Markets Weak And Melting Downward As Supports Continue To Give Way

Written by Gary

Low volume, lack of interest, investors are picking up their marbles and going home. What was expected to be a more or less sideways trading day has turned out to be one that is trending down. WTI oil is trading below its interim support, the U.S. dollar is testing its support aggressively as the standoff continued between Greece and its creditors sours U.S. investors.

Here is the current market situation from CNN Money

North and South American markets are mixed. The Bovespa is higher by 0.46%, while the S&P 500 is leading the IPC lower. They are down 0.35% and 0.03% respectively.


Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 49%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 34%
Investors Intelligence sets the breath Above 50 bullish 55.9% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -39.03 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 51.54% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 61.53% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 63.40% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.82 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 76.25 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,941

What Is Moving the Markets

Here are the headlines moving the markets.

Greece talks of compromise as Merkel warns time short for deal

ATHENS/KRUEN, Germany (Reuters) - Greece proclaimed a new willingness to compromise with its international creditors on Monday, as German Chancellor Angela Merkel warned that time was running out for an reform-for-aid deal to keep the country in the euro.

Protesters Torch Ballots In Bid To Block Mid-term Elections In Mexico

An election in southern Mexico had to be called off after voters took their ballot papers out on the streets and set fire to them. Authorities in the State of Guerrero have been under intense public pressure since the disappearance and alleged massacre of 43 students last year. Protesters, including parents of the victims, say there will be no election until the case is resolved.

Millennials Have No Hope Of Buying A Home In These 13 US Cities

In "This Is What Happens When A Millennial Tries To Get A Job," we highlighted 1) high youth unemployment (U-6 at nearly 14%) and 2) the failure of America's university system to prepare new entrants for the job market, on the way to painting a rather grim picture for America's newly-minted college graduates.

We've also been keen to emphasize the fact that the "strong" labor market is anything but, as wage growth is essentially non-existent and upside "surprises" benefit from the now ubiquitous "vanishing worker." Given this, it's no surprise that many of America's best and brightest find themselves serving food and drinks after graduation even as they owe an average of $35,000 in student loans, debt which is curtailing homeownership â€" or at least delaying the process.

Given the above, it's not surprising that in many large US cities, buying a home is simply out of the question for most millennials, even assuming they have saved up 20% for a down payment. Bloomberg has more:

Millennials have been priced out of some of the biggest U.S. cities, with residential real estate prices rising even as wage growth remains elusive.

The good news is that out of 50 metropolitan areas, 37 are actually affordable for the typical 18-34 year-old.

The bad news is that the areas that often most appeal to young adults are also the ones where homeownership is the most out of reach..

Watch As Blockchain & GAFA (Google, Apple, Facebook, Amazon) Send Slower Banks The Way of the Classified Ad

Last year I penned "Who Are The Three Biggest Data Companies In the World? 1) Google 2) the Fed 3) JP Morgan/ECB" in an attempt to illustrate what many C-suite professionals seem to be missing. That is banks are essentially in direct competition with GAFA (Google, Apple, Facebook and Amazon - the pre-eminent data companies of our time). Banks are only just now starting to catch on to this, but the problem is they are catching on in the wrong way... again. It appears as if banks are concerned that GAFA will gain control the user by sitting in between the heaving regulated service (banking) and the user/user interface/user experience. Apple Pay is a very strong example of such. Now, don't get me wrong - that's a very valid concern. It's just that it's a concern born out of a gross misunderstanding of how the new "money" technologies work and what they are capable of. In all due respect to banking management, they are not the only one's who may not fully grasp this concept. I've notice many very smart investors and regulators may be missing the point as well. I glean this as I go on my mini-roadshow to raise capital for Veritaseum. The problem for the bankers is that they are the one's who will be affected the most. Investors may miss out on the next big thing. Regulators may pass inefficient regulation that may need to be re-written. Bankers face relegation to that of base utility companies with capped profits and margins, literally shielded from both the public view and minds ...

Are You A Lebowski Achiever?

Submitted by Anthony Saunders via Confounded Interest blog,

The Failed Middle Class Housing Recovery In One Chart (Maybe A Few More)

True, house prices have been rising across the USA since the housing bubble burst. But the "recovery" has not been equal across income levels. The wealthiest Americans are doing quite well, but America's middle class has not recovered.

Something happened in late 2008 that has skewed the recovery towards the wealthiest Americans. In part, it was the massive, monetary intervention policies of The Federal Reserve. In addition, there has been a philosophy in Washington DC of managing the economy through regulation and non-growth policies. For example. the Brookings Institute has a study documenting the decline in business start-ups.

The result of The Fed's massive intervention in financial markets coupled with government policies favoring one group versus another (see George Stigler's regulatory capture) has resulted in corporate profits after tax growing substantially since 2009 while wage growth is less than half of corporate profit growth.

New Standard Chartered Boss Must Plot Retreats

Bad loan fears may have sparked the turmoil at Standard Chartered, but a deeper rethink of the bank's businesses is needed to restore investor confidence in its future.

Deutsche Bank's New Man Still Faces Existential Question

Heard on the Street: A new boss at Deutsche Bank may not be enough to overcome the bank's strategic quandary.

The Non-GAAP Revulsion Arrives: Experts Throw Up All Over "Made Up, Phony, Smoke And Mirrors" Numbers

One of the recurring stories on Zero Hedge has been the increasingly more blatant fabrication of corporate bottom line "earnings" with the explicit blessing of both accountants and regulators, in the form of non-GAAP results. Our most recent observation conducted two months ago showed that the variation between GAAP and non-GAAP EPS has stretched to the widest degree since the financial crisis.

The chart below shows total S&P non-GAAP EPS with the GAAP component broken out in Green.

Specifically, the data revealed that the amount of non-GAAP addbacks and various other accounting and financial engineering gimmicks has been higher just once in history: in Q4 of 2008.

Furthermore, as we have shown every single quarter, nobody has fabricated their bottom line more than Alcoa:

Dow Gives Up 2015 Gains, Trannies Down 8% Year-To-Date

BTFD or Different This Time?

Awkward: NY Fed Debunks Myth Of "First-Quarter Residual Seasonality"

Steve Liesman is quaking in his reporter's boots this morning as the SF Fed & BEA's credibility-crushing "double-seasonal-adjustment" thesis is crushed into statistical neverland by the The NY Fed. A study by economists at the Board of Governors of the Federal Reserve did not find significant statistical evidence for such distortions on the aggregate GDP level, despite meteoroconomist Joe Lavorgna's assertion that Q1 grew 1.2% thanks to the magic of made-up numbers. As The NY Fed concludes, in a tone that suggests "sigh, again, "it will not be surprising if the question of residual seasonality comes up again next year when first-quarter growth numbers are announced."

The SF Fed and further The BEA did their best to provide evidence of growth to justify rate hikes (despite macro data's collapse) thanks to the very-smart-sounding "residual seasonality"...

Although the agency adjusts its figures for seasonal variations, growth in any given first quarter still tends to be weaker than in the remaining three, economists have found, a sign there may be some bias in the data. It's a phenomenon economists call "residual seasonality."

Deutsche Bank Shares Up After CEOs' Departure

Deutsche Bank shares rose 6% a day after embattled co-Chief Executives Anshu Jain and Jürgen Fitschen resigned. They will be replaced by former UBS finance chief John Cryan.

Sears reports smaller first-quarter loss but sales keep sliding

(Reuters) - Sears Holdings Corp reported a smaller first-quarter loss as it cut advertising and other costs, but sales continued to tumble, underscoring the need for a big cash injection that the struggling retailer said would materialize next month.

OPEC Set To Continue Playing The Waiting Game

Submitted by Arthur Berman via,

Following OPEC's decision not to cut production at its June 5, 2015 meeting in Vienna, oil prices should likely continue their descent that began in early May (Figure 1). Prices may fall into the $50+ per barrel range since there is no tangible reason for their rise from January's $46 low.


Figure 1. Brent crude oil spot price May 1- June 1, 2015: Source: EIA and Labyrinth Consulting Services, Inc.

(click image to enlarge)

Saudi Arabia's longer view of demand and market share dominated the decision not to cut.

World oil production has undergone a structural shift from supply dominated by relatively inexpensive conventional production to increasingly more supply coming from expensive deep-water and unconventional production. Most conventional oil is located in the Arabian, Siberian and North Caspian basins (Figure 2) while deep-water and unconventional production is focused along the margins of the Atlantic Ocean and in North America.


Figure 2. Location map showing Arabian, Siberia ...

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