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30Jun2015 Market Update: Afternoon Market Landscape Headed South As Investors Get Cold Feet

Written by Gary

U.S. stocks opened up +60% this morning following their biggest one-day loss of the year, as a last-minute diplomatic scramble got under way to keep Greece from defaulting on its debt payments.

Early afternoon stocks shed most of their morning gains as nervous investors wondered whether last-minute talks would produce a bailout deal that would keep Greece in the euro.

Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.02%, while the Bovespa is leading the IPC lower. They are down 2.01% and 0.21% respectively.

Trouble in Greece and China is unlikely to do much damage to the U.S. at first, but could still seriously alter the economic and financial landscape later in the year.

Greece requested a new bailout amid a last-minute diplomatic push before the country's current rescue deal expires and it defaults on a payment to the International Monetary Fund.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 53%

CNN's Fear & Greed Index

Above 50 = greed, below 50 = fear


Investors Intelligence sets the breath Above 50 bullish 52.7% 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.

-55.74 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.

43.25% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 58.81% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 58.80% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.14 Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 76.27 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors


What Is Moving the Markets

Here are the headlines moving the markets.

Greeks struggle with headaches and anxiety of cash shortages _ as tourists head to the beach

ATHENS, Greece (AP) — Gamal Takaway has turned up the hustle, to no avail. The popular waiter who goes by the nickname Jimmy often steps out into the pedestrian street in front of the Taverna Plaka restaurant to cajole strollers into taking a table.

But even his epic charm has failed since the Greek government shut the nation's banks and imposed strict capital controls over the weekend. "We are empty this afternoon," he said Tuesday, looking at rows of tables with no diners. "It happened in one night, not slowly. This time it's heavy.

It's dropped off by 50 percent." With cash withdrawals cut to 60 euros ($67) per day, many Greeks aren't spending in restaurants for fear that they will run out of cash they would need if a family member got ill or another serious problem developed. "You don't know what can happen," he said. "In my case, I have money, and I don't have money in a sense. I have it in the bank, but I can't get it in my hands. It's crazy."

No Easy Way Forward for Markets

The stock market has shifted to neutral, and investors don't expect the rest of 2015 to be a joy ride.

Greece and creditors to discuss new proposal as bailout to expire, Athens to default on IMF

ATHENS, Greece (AP) — Greece's European creditors were assessing a last-minute proposal Athens made for a new two-year rescue deal, submitted just hours before the country's international bailout program expires and it loses access to billions of euros in funds.

At midnight central Europe-time on Tuesday, the country is also set to become the first developed nation to miss a debt repayment to the International Monetary Fund, as Greece sinks deeper into a financial emergency that has forced it put a nationwide lockdown on money withdrawals.

The crisis worsened over the weekend after Prime Minister Alexis Tsipras called a referendum for Sunday on creditors' proposals for reforms in return for bailout loans. That increased fears the country could soon fall out of the euro currency bloc and Greeks rushed to pull money out of ATMS. Tsipras is advocating a "no" vote.

Greece Seeks Emergency Bailout From Eurozone

Hours before the deadline for a debt payment Greece cannot afford, Prime Minister Alexis Tsipras asked the other nations that use the euro to buy time for a renegotiation of Greece's debt load.

China Markets Escape Bear Territory

China's shares reversed a recent sharp selloff, as investors elsewhere in Asia pushed off concerns about a default in Greece until the outcome of a referendum next Sunday.

Greece asks for bailout extension as clock ticks down

ATHENS (Reuters) - Greece pleaded for a short-term bailout extension on Tuesday to avert a midnight default as frantic efforts gathered pace to salvage a deal that could keep Athens in the euro, with Germany warning that time had run out to extend vital credit lines.

Apple conspired to fix e-book prices: U.S. appeals court

NEW YORK (Reuters) - A divided federal appeals court on Tuesday said Apple Inc orchestrated a conspiracy with five publishers to increase e-book prices, in a victory for the U.S. Justice Department.

Emerson Electric to spin off network power business

(Reuters) - U.S. factory automation equipment maker Emerson Electric Co said it planned to spin off its network power business as part of its efforts to focus on high-growth businesses.

Fiat Faith Faltering? Bitcoin Surges 12% Post-Greferendum Announcement

Like it or not, Bitcoin is an alternative to the fiat fraud money that is the backbone of the status quo. Since Tsipras announced the Greferendum, Bitcoin has surged 12% as perhaps - away from the cornered and manipulated precious metals markets - faith in fiat is faltering...


Wall St. trims gains as Greece debt default looms

(Reuters) - U.S. stocks shed some of their early gains on Tuesday as nervous investors wondered whether last-minute talks would produce a bailout deal that would keep Greece in the euro.

OCC Sees Increasing Credit Risk in Banking Sector

Risk in the U.S. banking sector is increasing because lenders are easing underwriting standards for some auto, business, and commercial real-estate loans, the Office of the Comptroller of the Currency said Tuesday.

Puerto Rico governor calls for bankruptcy; adviser says island 'insolvent'

NEW YORK (Reuters) - Puerto Rico's governor on Monday called for the commonwealth to be allowed to restructure its debts under U.S. bankruptcy code, while a newly appointed adviser to the U.S. territory said it is "insolvent" and will soon run out of cash.

U.S. seeks up to $3.35 billion in Novartis kickback lawsuit

NEW YORK (Reuters) - The United States says Novartis AG should pay as much as $3.35 billion in damages and civil fines because the Swiss drugmaker used kickbacks to boost sales of two drugs covered by Medicare and Medicaid.

Analysis: New oil bull market in sight as Brazil, Iraq cut output targets

LONDON (Reuters) - Massive downward revisions to oil output in Brazil and Iraq have increased the risks for oil markets of going from the current feast to famine within just a few years, leading to a price spike that would give a new boost to the U.S. shale industry.

Malvinas 2.0? Argentina Plans Asset Seizure Of Falkland Oil Companies

Submitted by Andy Tully via,

Is it just election fever, or is Argentina serious about reclaiming the Falklands Islands?

Presidential elections loom in the country in October, so perhaps it's not surprising that a Lilian Herraez, a federal judge in Tierra del Fuego, Argentina's southernmost region, ordered the seizure of $156 million in property and bank holdings of oil drilling companies, including Noble Energy of the United States.

The government in Buenos Aires said on June 27 that the other targets of asset seizures were Edison International of Italy and three British-based companies, Falkland Oil and Gas Ltd., Premier Oil Plc and Rockhopper Exploration Plc.

Reuters quoted a source which it said was knowledgeable of the situation as saying none of these four companies tends to have financial holdings in Argentina or to work in Argentine waters. But a statement by prosecutors said Noble Energy "has a local office registered in Argentina," and that its assets there would be frozen.

"The [Argentine] foreign ministry will be notified of the court order so that by diplomatic means and in compliance with international treaties it can be carried out," the statement said.

The Falklands, an archipelago within 450 miles of the Argentine mainland, have been under British rule continuously since 1833. Buenos Aires still claims the islands, which they call the Malvin ...

Europe Will Soon Impose Border Controls

Europe is imposing capital controls... next up will be border controls.

How do we know? Because they already suggested this before.

Back in March of 2012, when the EU Crisis first began to spin out of control, then Prime Minister of France Nicolas Sarkozy openly called for the renegotiation of the Schengen Treaty: the treaty that established the 26-nation EU as a "borderless" entity in which individuals could move from one country to another with little difficulty and which also made trade among EU members easier.

France was not alone either. A few months later, both France and Germany proposed imposing border controls in June of that same year.

A Vote of No Confidence in Europe

Germany and France's joint proposal to allow Schengen-zone countries to temporarily reintroduce border controls as a means of last resort might sound harmless. But doing so would damage one of the strongest symbols of European unity and perhaps even contribute to the EU's demise.

Germany and France are serious this time. During next week's meeting of European Union interior ministers, the two countries plan to start a discussion about reintroducing national border controls within the Schengen zone. According to the German daily Süddeutsche Zeitung, German Interior Minister Hans-Peter Friedrich and his French counterpart, Claude Guéant, have formulated a letter to their colleagues in which they call for governments to once again be allowed to control their borders as "an ultima ratio" -- that is, measure of last resort -- "and for a limited period of time." They reportedly go on to recommend 30-days for the period.

With Market Closed, Trading Greek ETF Is Gamble, Guessing Game

"The ETF can't be more liquid than the underlying, and we know the underlying can be become quite illiquid" - Howard Marks

There's been quite a bit of spirited discussion this year about whether ETFs provide liquidity. The proliferation of exchange traded bond vehicles and the concurrent decline in dealer inventories has led some to question whether investors are being lulled to sleep by so-called "phantom liquidity."

Barclays took a close look at the issue recently and discovered that since 2009, the "net" portion of gross bond ETF trade volumes had declined from over 20% to just 12%, which the bank cites as evidence that ETFs are adding liquidity to the market.

But this could simply reflect the fact that volumes for ETFs that track assets like junk bonds have skyrocketed over the same period, with low yields fueling both the supply and demand side of the equation and thereby increasing the likelihood that flows will be diversifiable (versus unidirectional).

The problem, as we've been keen to point out over the last several months and as noted earlier today is that "when fund flows are one-way (i.e. everyone is selling), fund managers must either i) meet redemptions with cash, or ii) trade the underlying securities. Note that the latter option is so undesirable in illiquid markets (indeed, trading large blocks in illiquid markets poses a systemic risk), that some fund managers are now lining up emergency liquidity lines with banks so that they can at least meet an initial wave of selling with cash and avoid, for a ...

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