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28Jul2015 Market Update: Market Do Well, Oil Higher, Indicators Are Bearish

Written by Gary

Averages Rise In light of bearish indicators. The market has to improve or we are in a bear downturn.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The S&P 500 is up 1.15% while the Bovespa gains 0.59%. The IPC is off 0.54%.

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 7%
Investors Intelligence sets the breath Above 50 bullish 42.8%
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.

-57.61

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.

35.43%

StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 48.35%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 50.60%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.48
StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 78.87
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,759

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street rises after China market steadies

(Reuters) - U.S. stocks were higher on Tuesday and were on track to break a five-day losing streak as a selloff in Chinese stocks eased and investors shifted focus to corporate earnings.

After strong quarter, Ford aims to 'disrupt like a startup'

DETROIT (Reuters) - Ford Motor Co's chief executive, Mark Fields, said on Tuesday he wants the company to act "like a startup" as it prepares for an evolution of the auto industry, after it posted second-quarter profit that handily beat expectations.

Honeywell to buy Melrose's utility metering business for $5.1 billion

(Reuters) - Honeywell International Inc has made its largest purchase in more than a decade, agreeing to buy the utility consumption metering business of Britain's Melrose Industries Plc for about $5.1 billion.

Wall Street Still Didn't Get The Memo - China's Done, Top's In!

Submitted by David Stockman via Contra Corner blog,

Bubblevision's Scott Wapner nearly split a neck vessel today denouncing the US stock market sell-off. It was completely unwarranted, he thundered, because China don't have nothin' to do with anything.

Why, insisted CNBC's best dressed pom-pom boy, China's stock market has never been correlated with its economy, and, anyhow, its economy doesn't matter all that much to the S&P 500 because China accounts for only 14% of global GDP.

Besides that, China's stock market is exactly like what Yogi Berra said about his favorite restaurant: It's so crowded, nobody goes there anymore!

That is, according to the talking heads Chinese household's don't go to the bourses, either. Few of them own stock and equities account for only 20% of household wealth compared to upwards of 65% in the US.

So enough of the schwitzing about the red chip sideshow. Buy the dip!

Indeed, that's exactly what the insentient robo-traders did at the close. After banging the 200DMA, they bid the S&P right back-up to Monday's VWAP (volume weighted average price) in the final seconds, thereby filling-up their sell buckets to unload on tomorrow's dip buyers. As Zero Hedge noted,

On the day, US equities staged their standard JPY ignited momo bounce off the 200DMA - running perfectly to VWAP in the S&P, before limping lower...and a mini algo meltup to VWAP at the close... all completely human!!

Cerberus leads U.S. investors gobbling up Europe's bank loans

LONDON (Reuters) - Cerberus, the private equity firm named after the mythical three-headed dog guarding the gates of Hades, is leading a charge by U.S. investors who are snapping up European loans at knockdown prices.

Behind China Market's Latest Collapse: a Government Retreat

In its scramble to prop up the stock market in recent weeks, Beijing has focused on state-owned titans such as PetroChina. Its big drop this week is seen as a sign of at least temporary surrender.

Denials fly in war of nerves over Greek debt talks

ATHENS/BRUSSELS (Reuters) - Conflicting statements and denials flew between Athens and Brussels on Tuesday in a war of nerves highlighting the depth of mutual mistrust over a new round of negotiations on an 86 billion euro bailout that started this week.

RBS to sell $2.2 billion Citizens shares to take stake below 25 percent

LONDON (Reuters) - State-backed Royal Bank of Scotland intends to sell up to $2.2 billion shares in U.S. bank Citizens , which would cut its stake in that business to less than a quarter.

U.S. consumer mood sours, home price growth stalls

NEW YORK (Reuters) - U.S. consumer confidence took its biggest tumble in four years in July on a less upbeat jobs outlook, while home appreciation in major cities stalled in May, suggesting a spring pause in housing demand.

UPS second-quarter profit tops estimates; sees sluggish U.S. economy

(Reuters) - Package delivery company UPS on Tuesday reported a better-than-expected second-quarter profit on improved margins, and said U.S. economic growth was being hampered by a strong dollar and an expected interest rate hike.

Stocks Melt-Up On Oil Bounce As JPY Carry Breaks

In case you were wondering WTF... it's oil, as the algos pin to WTI after JPY failed to follow through on overnight intervention...

Dumping bonds didn't work... so they ramped JPY and when that failed switched to oil...

Of course the ramp is volumeless...

It appears bonds and stocks needed to recouple...

Because fun-durr-mentals. That's why.

Miner Freeport to review all costs, output cuts; shares jump

(Reuters) - Freeport-McMoRan Inc said on Tuesday it is reviewing its mining and oil and gas businesses for significant additional cuts in capital spending and operating costs because of weak prices for copper, molybdenum and gold.

U.S. consumer confidence drops in July

NEW YORK (Reuters) - U.S. consumer confidence weakened in July, due in part to a less optimistic outlook on the labor market, according to a private sector report released on Tuesday.

Investors Warned on Carlyle Fund

Carlyle's $5 billion hedge-fund firm, Claren Road Asset Management, faces the prospect of withdrawals after a consultant advised clients to pull their money following poor performance from bad bets on Greece and mortgage giants Fannie Mae and Freddie Mac.

KKR and Irish investment fund bid to revive house building

DUBLIN (Reuters) - U.S. private equity firm KKR & Co LP and Ireland's new strategic investment fund will launch a 500 million euro ($552 million) joint venture to provide credit for builders amid a severe housing shortage.

Facebook's ascent has investors betting on more gains

NEW YORK (Reuters) - The big selloffs in shares of social media companies last quarter following weak results seem to be brushed under the carpet this earnings season as investors focus instead on the success of Facebook Inc .

US Middle Class Stays Dead: Homeownership Drops To 48 Year Low; Median Asking Rent Soars To All Time High

Three months ago, just as the last Census Homeownership and residential vacancy report hit, Gallup released its latest survey which confirmed just how dead the American Dream has become for tens if not hundreds of millions of Americans.

According to the poll, the number of Americans who did not currently own a home and say they do not think they will buy a home in "the foreseeable future," had risen by one third to 41%, vs. "only" 31% two years ago. Non-homeowners' expectations of buying a house in the next year or five years were unchanged, suggesting little change in the short-term housing market.

As Gallup wryly puts it, "what may have been a longer-term goal for many may now not be a goal at all, and this could have an effect on the longer-term housing market."

Earlier today, the US Census released its latest homeownership data, which confirmed that for what is left of America's middle class, owning a home has become virtually impossible, with the homeownership rate plunging from the lowest level since 1986, or 63.7%, to just 63.4% the lowest reading since the first quarter of 1967.

Three months ago

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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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