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26Jun2015 Market Update: Markets Deep Into The Red, Concerns Over Greece Become Larger, Investors Dumping Euro

Written by Gary

Afternoon averages have started to melt up after fractionally falling almost one percent having given up all their post-FOMC post-Greece-is-Rescued gains. S&P 500 is now below its 100DMA.

Investors are becoming more worried than they were yesterday as we see more red before the closing bell rings.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 1.28% while the IPC gains 0.37%. The S&P 500 is off 0.09%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 58%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 34%
Investors Intelligence sets the breath Above 50 bullish 55.1%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -16.17
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 51.97%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 60.70%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 61.60%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value

24.80

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 77.87
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,019

What Is Moving the Markets

Here are the headlines moving the markets.

China Stocks Plunge to Brink of Bear Market

A Chinese stock market slump that began two weeks ago deepened, with the main index tumbling on concerns the government is seeking to cool a yearlong debt-fueled rally.

Tempers Flare as Greek Talks Enter Final Stages

With time running out in negotiations to resolve Greece's debt crisis, tensions showed in comments by European leaders.

Leading Index Review: May 2015 Philly Fed Leading Index Projects Economic Growth Now at 1.6%

Econintersect: This leading index is now forecasting growth at 1.6% over the next 6 months. A review of all major leading indicators follows - and no leading index is particularily strong.

Amid cries of blackmail, glimmers of Greek debt hope emerge

BRUSSELS (Reuters) - Greek Prime Minister Alexis Tsipras accused international creditors of "blackmail" on Friday after euro zone partners warned Athens it had 48 hours to accept a cash-for-reform deal or plunge toward default next week.

Stock Plunge To Day's Lows As Market Breaks

US equity market indices are re-plunging to the day's lows - having given up all their post-FOMC post-Greece-is-Rescued gains. S&P 500 is testing its 100DMA. Coincidentally, as the plunge began:

S&P DOW JONES INDICES SAYS EXPERIENCING INTERMITTENT ISSUES DUE TO OBSERVED DELAYS WITH CME DISTRIBUTION

And this is happening before the Russell Rebalance volumefest hits...

Greek Deal or No Deal: Investors Question Which Is Worse for Euro

Last time Greece headed for a potential departure from the eurozone, investors dumped the euro, betting that an exit would be a disaster for the currency. This time, they're not so sure.

US Rig Count Increases For First Time In 29 Weeks

After 28 consecutive weeks rig counts declines in America - despite crude production levels hitting new cycle record highs - Baker Hughes reports Total Rig Count increased 2 to 859 this week. The oil rig count dropped 3 to 628. Crude's price reaction is negligible.

Total Rig Count rose for first time since Dec 5th...

But oil rigs decline contionued...


*U.S. OIL RIG COUNT -3 TO 628, BAKER HUGHES SAYS

*OIL RIGS IN WILLISTON BASIN FALL BY THREE TO 74: BAKER HUGHES

*OIL RIGS IN PERMIAN BASIN FALL BY TWO TO 230: BAKER HUGHES

*OIL RIGS IN TEXAS'S EAGLE FORD SHALE UNCHANGED AT 83

*OIL RIGS OUTSIDE MAJOR BASINS JUMP BY 10 TO 141: BAKER HUGHES

But production just keeps rising...

Charts:Bloomberg

Why The Greek "Bailout" Failed... Explained With Cats

While we expained in great detail exactly what "good" the previous bailouts for Greece did for the Greek people, we thought the following gif was easier for many to digest.

How to explain in one gif, why the loans never helped the Greek people pic.twitter.com/IxBs0nHTM8

(@alepouda) June 26, 2015

Please note these are cats: we have not stooped to abusing kittens for our own personal gain.

Here is the somewhat more sophisticated explanation why the bailout (of European banks) failed:

Which it is clear Greek officials understand all too well:


GREECE OFFL: PROPOSAL LEADS TO WORSE BAIL-OUT DEAL AT YEAR-END

GREECE OFFL: CREDITORS LIQUIDITY PROPOSAL HAS FUNDING GAP

GREECE OFFICIAL: CREDITORS PROPOSAL ADDS TO AUSTERITY

SCOTUSCare Post Mortem: Goldman Warns Healthcare Costs Will Continue To Rise

Via Goldman Sachs,


The US Supreme Court upheld the Obama administration's interpretation of the Affordable Care Act (ACA). This resolves most of the uncertainty regarding the subsidies under the law, though a few less significant legal challenges continue to work their way through the system. Congress looks unlikely to make any significant changes to the ACA this year, though a few smaller changes, like repeal of the medical device tax, are possible.

While there was some uncertainty regarding the outcome of today's ruling, we do not expect it to lead to the same kind of rise in health employment that the resolution of uncertainty may have spurred in mid-2014. That said, continued strength in health employment and consumption seems likely.

The Supreme Court ruled yesterday (June 25) in favor of the Obama Administration's current implementation of the Affordable Care Act (ACA), denying claims from challengers that health insurance subsidies were improperly paid for enrollees in states that did not operate their own health insurance exchanges.

Q: What was the case about?

By way of background, the ACA (also known as "Obamacare") provides subsidized insurance coverage for low- and middle-income individuals through two main channels: an expansion of the existing Medicaid program to cover individuals with incomes up to about $16,000 and the establishment of a new system of "health exchanges" providing standardized insurance, which is subsidized for individuals with incomes up to about $47,000. To maximize coverage, the law requires insurers to provide coverage to anyone who applies for it, individuals face tax penalties for failure to purchase it, and employers face penalties for failing to provide it.

The case that the court ruled on today, King v. Burwell, hinged on the interpretation ...

No longer so secret, Swiss banks look to expand after purge

ZURICH (Reuters) - Switzerland's private banks are close to ridding themselves of undeclared European accounts, a salutary process but one which has undermined efforts to grow their businesses.

19 June 2015: ECRI's WLI Continues In Positive Territory and Again Improves Marginally

ECRI's WLI Growth Index which had spent 28 weeks in negative territory - is now in its eighth week in positive territory and again marginally improved this week.

Oil markets soft as markets eye Greece, Iran uncertainty

NEW YORK (Reuters) - Brent futures were little changed on Friday while U.S. crude prices fell slightly as Greece's debt drama and Iran's bid to seal a nuclear deal by the month end led to uncertainties in oil markets.

Nike Boosts Dow; Nasdaq Slips

U.S. stocks traded mostly higher Friday, with an advance in Nike Inc. boosting the Dow industrials, while the technology sector posted losses.

Pimco CEO says client anxiety fading after star manager's departure

CHICAGO (Reuters) - Pimco's chief executive officer said on Friday that improving flow trends showed the big bond firm is regaining client confidence after the departure of star manager Bill Gross last year led to billions of dollars of withdrawals.

What US Electricity Consumption Is Telling Us

Submitted by Erico Matias Tavares via Sinclar & Co (co-authored with DegreeDays.net),

A year ago we wrote about how electricity consumption could provide clues to the performance of the US economy, which generated a lot of interest and comments.

A relationship between the two variables makes sense, but needs to be framed in the proper context. Genuine economic (and population) growth should translate into more electricity consumption, as we have more activity and transactions taking place throughout the economy.

However, factors such as energy efficiency and the weather can muddle this relationship:


An increase in efficiency means that the same output can be obtained with less inputs. Therefore, a small-ish reduction in electricity consumption versus a prior period may not necessarily be indicative of a sluggish economy over that time. And we know that this efficiency has been on the rise in recent years (just look at the power rating of your new appliances).

Likewise, a warmer winter versus the prior year may also cause a drop in electricity consumption, simply due to home heaters not being used as hard, not necessarily because the economy is doing badly.

So can we adjust electricity consumption to take these factors into consideration and get a better measure of its relationship with economic growth?

We developed an indicator to do just that together with DegreeDays.net, an energy systems data company. We provide a brief technical explanation of our proposed methodology below (for a much better overview please visit this

U.S., German Government Bonds Retreat on Greek Deal Hopes

Government bonds in the U.S. and Germany sold off on Friday as optimism that Greece would reach a deal with international creditors to avoid a potential default sapped demand for haven assets.

Final June 2015 Michigan Consumer Sentiment Growth 3% in 2015

by Doug Short, Advisor Perspectives/dshort.com

The University of Michigan final Consumer Sentiment for June came in at 96.1, a small increase from the 94.6 June preliminary reading but still below the interim high of 98.1 in January. Investing.com had forecast 94.6 for the June final. The latest survey findings were a welcome improvement following last month's interim low.

China Politburo Opines On Market Crash: "Black Friday Massacre"

Big trouble in big over-leveraged China...

China's Politburo official mouthpiece Xinhua summed up the bloodbath in China in one tweet overnight...

Again?Black Friday. China shares dive 7.4%?worst single day loss since June 10, 2008. pic.twitter.com/6Pyvns287s

— China Xinhua News (@XHNews) June 26, 2015

Which is odd, since just a month ago, another mouthpiece noted an "authoritative insider" pushing investors to save less and buy more stocks "as economic downside riosks were well managed." China Daily, a month ago, quoted an "Authoritative Insider" pushing the average joe Chinese citizen to save less and speculate more...

He stressed that investment has a vital effect on economic growth: "Seen from the stage China is at right now, whether it can transfer savings to effective investment will be the key to stable economic growth."

The insider also mentioned that on the one hand the Chinese people are having trouble getting sustainable property income with the high rate of household savings, and on the other hand the real economy and key construction projects lack fun ...

Corner Office: Tae Hea Nahm of Storm Ventures: A Believer and a Skeptic in One

The chief executive of a venture capital firm says successfully guiding his staff involves faith and passion, but also a fair amount of skepticism.

Oil Tankers Are Filling Up and Raking It In

The oil-tanker market is heating up, a development some analysts say is a warning flare that signals further price declines for crude.

EURUSD Breaks Key Support, Drops To 3-Week Lows

EURUSD just broke below its 50-day moving average...

and slid to 3-week lows... running stops to 1.1130.

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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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