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06Jul2015 Market Update: Markets Erase Most Of Morning Losses, Oil Falls 5%, Averages Trading Modestly Lower

Written by Gary

U.S. stocks traded around the fractionally lower line this afternoon after erased most of their earlier losses, even turning positive briefly, as investors largely brushed off news that Greek citizens resoundingly rejected creditors' conditions for further financial aid.

Oil prices tumbled their most in three months today, with U.S. crude falling 5 percent and the U.S. dollar also falling unexpectedly.

Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.86% while Mexico's IPC is off 0.74% and U.S.'s S&P 500 is lower by 0.52%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 54%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 16%
Investors Intelligence sets the breath Above 50 bullish 51.0% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -12.34 NYSE % of stocks above 200 DMA Index ($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.

45.49% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 57.86% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction.

57.60% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.12 Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 77.13 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,974

What Is Moving the Markets

Here are the headlines moving the markets.

Greek finance minister quits to smooth talks after thunderous 'No'

ATHENS/FRANKFURT (Reuters) - Greece's combative finance minister resigned on Monday, removing one major obstacle to any deal to keep Athens in the euro zone after Greeks voted resoundingly to back the government in rejecting the austerity terms of a bailout.

U.S. Stocks Nearly Flat as Investors Shrug Off Greek News

U.S. stocks traded around the flat line Monday as investors largely brushed off news that Greek citizens resoundingly rejected creditors' conditions for further financial aid.

Airbus leads Boeing on first-half orders, behind on deliveries

PARIS (Reuters) - (This version of the story was refiled to correct mis-spelling of Syphax in advisory line, also adds Boeing data, Syphax cancellation)

Judge Tosses Ex-Goldman Programmer's Second Conviction

A New York state judge dismissed the second conviction of Sergey Aleynikov, the former Goldman Sachs programmer charged with stealing the bank's high-frequency trading computer code.

Peak Desperation: China Bans Selling Of Stocks By Pension Funds

What do you do when two policy rate cuts, $19 billion in committed support from a hastily contrived broker consortium, and a promise of central bank funding for the expansion of margin lending all fail to quell extreme volatility in a collapsing equity market?

Well, you can simply ban selling, which is apparently the next step for China.

According to Caijing, the country's national social security fund is now forbidden from selling (but is welcome to buy). Here's more, via Caijing (Google translated):

Social Security informed the public fund social security portfolio not only buy sell stock

"Financial" reporter learned that the Social Security Council on Monday (July 6) Call each raised funds, social security portfolio is not allowed to sell their holdings of stock.

Sources said that Social Security Council has just informed all social security portfolio can only buy stocks can not sell the stock; and it is not defined as the net selling, but completely unable to sell the stock.

And a bit more from FT:

Financial magazine Caijing reported on Monday that the National Social Security Fund had told its external fund managers they could buy stocks but were not permitted to sell them.

Central Huijin, a unit of China's sovereign wealth fund, also said ...

Rolls-Royce's New Boss Signals Scale of His Task

The new Rolls-Royce chief executive is facing many challenges in righting the U.K. engineering company but his immediate priority should be the civil aviation division.

Wall Street pares early losses

(Reuters) - U.S. stocks erased most of their earlier losses, even turning positive briefly, on Monday after the International Monetary Fund said it is ready to assist Greece if asked.

Aetna CEO addresses antitrust concerns over Humana deal

NEW YORK (Reuters) - Aetna Inc's chief executive said Monday he was confident an antitrust review of the health insurer's proposed purchase of smaller rival Humana Inc would allow the deal to close in the second half of 2016, seeking to allay investor concerns.

ECB To Keep Greece On Hold Until Wednesday When Balyasny Sees Rioting Begin

As we have repeated since January, and certainly on numerous occasions over the weekend, at this point the only variable is what the ECB will do: will it give insolvent Greek banks more aid, or will it increase its ELA collateral haircut (or even withdraw it altogether), the ramifications of which action would have a dire impact on contagion within the rest of the periphery but most certainly on both the Greek financial system as well as Greek society which is now facing an indefinitely period of capital controls.

A quick reminder: this is how we laid out the dynamic between Greece and the ECB in on January 31, which 6 months later, has played out precisely as forecast:

... today the ECB's Erikki Liikanen, tired of pleasantries and dealing with what to Europe is a completely incomprehensible and illogical stance, one which is essentially a massive defection by Greece in the European "prisoner's dilemma", and which while leading to a Greek financial collapse and Grexit - both prerequisites to a subsequent Greek economic recovery unburdened by the shackles of the Euro - would also unleash a European depression, came out and directly threatened Greece that it now has 1 month until the end of February to reach ...

Conviction of Former Goldman Sachs Programmer Is Overturned

The ruling sets the stage for state prosecutors to either appeal the decision or let Sergey Aleynikov's six-year legal odyssey through the courts come to an end.

Oil tumbles 5 percent after Greek 'No' vote, ahead of Iran deadline

NEW YORK (Reuters) - Oil prices tumbled their most in three months on Monday, with U.S. crude falling 5 percent, after Greece's rejection of debt bailout terms and China's rolling out of emergency measures to support its stock markets shook global markets.

The Cost of Rescuing Chinese Stocks

China's aggressive response to plunging share prices undercuts its pledge to have the market play a decisive role in the economy and risks cementing investors' belief that Beijing will always bail them out.

Greek Bank Vortex Threatens Deal Hopes

The longer Greece's economic limbo endures, the closer to collapse Greece's banks will be and the more difficult any new economic bailout becomes.

Stocks Storm Into The Green As Entire 33 Point Post-Greferendum Dip Is BTF

Futures opened 33 points lower a little over 12 hours ago because, well, nobody had any idea how the Greek fiasco would play out (and still doesn't).

And then, moments ago the entire gap lower was closed as ES stormed into the green...

... on panic buying, or rather concerted selling of the VXX by the NY Fed ETF desk as noted earlier...

Kevin Henry has one job

â€" zerohedge (@zerohedge) July 6, 2015

... as well as on Citadel's massive spoofing of 10Y futures, which have been sold off in a straight line since the open of US trading.

Our suggestion to the PBOC: if you really want to rig markets higher, have Citadel open an office in Shanghai, and also bring Kevin Henry on for a 4-6 week sabbatical. He will show you hot to get the SHCOMP back to 5000 in no time.

More strikes loom at Lufthansa after talks with pilots fail

FRANKFURT/BERLIN (Reuters) - Talks between Lufthansa and pilots' union Vereinigung Cockpit (VC) about taking a pay dispute to mediation have failed, raising the prospect of strikes at the height of the summer travel season, the union said on Monday.

China stocks rise as Beijing's emergency moves brings some relief

SHANGHAI (Reuters) - Chinese stocks rose on Monday, as an unprecedented series of support measures unleashed by Beijing brought some relief to a market whose headlong slide over the past three weeks had raised fears about the stability of the world's second-biggest economy.
< ...

Piketty: "Germany Has Never Repaid Its Debts; It Has No Standing To Lecture Other Nations"

One year after Tomas Piketty sold a record number of economic textbook paperweights which virtually nobody read past page 26, once again showing the power of constant media hype, the French economist and wealth redistributor is out and about, this time pouring more gasoline on the fire started by the IMF last week when it released the Greek debt sustainability analysis showing Greece needs a 30% haircut, only to be met with stern resistance by, who else, Germany who know very well that should Greece get a debt haircut it will unleash the European dominoes which not even all the bluster and rhetoric of the ECB can halt.

And while Piketty's book may have sold out in socialist France, it seems Germany did not leave a pleasant taste in the celebrity economist's mouth, and in an interview with Germany's Zeit magazine, translated into English, the Frenchman just made sure he will never sell another book east of the Rhine. Here is the reason why:

When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.

... Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the First nor the Second World War. However, it has frequently made other nations pay up, such as after the Fra ...

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