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28Jul2015 Market Close: DOW Closes Higher, WTI Oil Closes In Support Area, Short Term Indicators Bullish

Written by Gary

The averages made a nice one percentage point move upward today with the DOW closing up 188 points on enthusiasm from traders that believe all is well in China and oil has reached it low point. Short term indicators are bullish and we will probably see another up day tomorrow, but the longer term indicators are getting rusty in the hinges and starting to squeak.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Brent Falls to Lowest Price Since January

Brent, the global oil benchmark, fell Tuesday to its lowest price since January on concerns about the persistent global glut of crude, while U.S. prices rose ahead of weekly inventory data.

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

NEW YORK (Reuters) - U.S. consumer confidence suffered its biggest blow 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.

Case-Shiller Home Price Index May 2015 Shows Home Prices Rising But Pace Still Not Accelerating

Written by Steven Hansen

The non-seasonally adjusted Case-Shiller home price index (20 cities) year-over-year rate of home price growth was unchanged from last month's 4.9%. The authors of the index say: "Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate".

Wall Street rises after China market steadies

(Reuters) - U.S. stocks surged on Tuesday and were on track to break a five-day losing streak as attention shifted from trouble in Chinese equities to U.S. corporate earnings and speculation the first Federal Reserve interest rate hike may not come until December.

Does "Creative Destruction" Include The State?

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

When do we get to exercise democracy and fire every factotum, apparatchik, toady and lackey in the state who has abused his/her authority?

Everyone lauds "creative destruction" when it shreds monopolies and disrupts private enterprise "business as usual." If thousands lose their middle-class livelihoods-- hey, that's the price of progress.

Improvements in productivity and efficiency can't be stopped, and those employed making buggy whips and collecting horse manure from fetid streets will have to move on to other employment.

This raises an obvious question few dare ask: does this inevitable process of creative destruction include the state? If not, why not? Aren't the state and the central bank the ultimate monopolies begging to be disrupted for the benefit of all? If government is inefficient and unproductive, shouldn't it be "creatively destroyed" in the same fashion as private enterprise?

The obvious answer is yes. Why should a monopoly (government) remain untouched by new knowledge and competition as it skims the cream from society to fund its own monopolies and grants one monopoly/cartel privilege after another to its private-sector cronies?

Under the tender care of the state, we now have uncompetitive, inefficient parastic cartels dominating higher education, national defense, healthcare insurance, pharmaceuticals and hospitals-- to name but a few of the major industries that are now state-enforced cartels thanks to the heavy hand of the state (i.e. regulatory capture).

Under the tender mercies of the state, prosecutors have a 90% conviction rate thanks to rigged forensic evidence, thr ...

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.

Drop in Consumer Confidence Is Sharpest in Four Years

The Conference Board's index of consumer attitudes fell to 90.9 this month from a downwardly revised 99.8 in June.

Wanted in China: Public Face to Calm Turbulent Markets

Wanted in China: a reassuring face to tell panicking investors that everything will be all right.

Rental Demand Supplies Home-Building Opportunity

A tight market is pushing rents higher, but new supply is on the way.

Rent-to-Own Homes Make a Comeback

Wall Street firms have found a new way to profit from consumers with blemished credit who can't qualify for a mortgage: let them rent a home first with the option to buy it later.

U.S. Stocks Trade Higher

Global stocks bounced back as a relatively muted decline in Chinese shares allowed investors to focus on upbeat corporate earnings and the Federal Reserve's monetary-policy meeting.

DuPont sees 'challenging' months ahead as farm sales weaken

(Reuters) - Chemical and crop company DuPont said the remainder of the year would be "challenging", as a strong dollar and persistently weak demand for its farm products continue to chip away at sales.

Blame The Fed For The Commodities Slump

Submitted by Bill Bonner via Bonner & Partners,

A Pileup in Commodities

Meanwhile, on the commodities highway, there's a huge pileup.

The crash in the oil market - which has taken the price per barrel of U.S. crude down 53% over the last 12 months - has left a massive slick.

A barrel of U.S. crude oil sold for just $48.14 at Friday's close - just 42 cents above its 52-week low. Overall, commodities are at a 13-year low.

And the coal miners have slid on the cheap oil and gas.

In the March issue of our monthly publication, The Bill Bonner Letter, we explained why energy was so cheap. The Fed dropped the price of capital so low that it cost almost nothing to borrow.

When the cheap money came to an end, so would the cheap oil, we guessed.

But it hasn't happened - yet...

So far, the Fed's cheap credit has exaggerated and prolonged the bear market in oil. Producers who should have shut down months ago are still pumping - kept in business by ultra-cheap financing.

Coal, cheap when we wrote about it back in March, is now even cheaper. Today, the price of coal is down 70% from four years ago.

This is pushing coal producers to the edge of solvency...

For example, Alpha Natural Resources, a big producer of metallurgical coal - or "met" coal, which is used for steelmaking -was delisted from the New York Stock Exchange because its share price was "abnormally low." Bankruptcy is now in the cards.


Stuck In Market Purgatory: How China's Citizens Lash Out At The Broken Market, In Their Own Words

What a difference a month makes: back in June, Chinese farmers could barely wait long enough to open one (or more) brokerage accounts and leave the pig herd for good, filled with dreams of getting filthy rich and early retirement happy endings; farmers who said on the record that "it's a lot easier to make money from stocks than farmwork."

Alas, like with every rigged market (which in the New Normal is every market), dreams always turn into nightmares for the participants, and as we documented earlier, the same farmers who were giddy with delight a month ago realized that there is no such thing as a guaranteed "get rich quick" scheme, and the full extent of their naive stupidity:

"I have lost everything. I don't know what to do... I trusted the government too much..." he exclaims, adding "I won't touch stocks again, I have ruined everyone in my family."

Even sadder, like the Greeks, these poor (and now even poorer) representative of China's lower/middle class only have themselves to blame. Call it Natural Selection with a margin call...

However, not everyone was stupid enough to gamble (with 5x leverage), and get wiped out. Some are stuck in stock market purgatory, or as Reuters puts it "trapped in the market" and now they are hoping, praying and "plotting their escape with government money."

Nervous Nasdaq - Too Many Highs & Lows

Via Dana Lyons' Tumblr,

A couple weeks ago, we posted a piece titled "The Junkie Market". The focus of the post was on the number of New Highs and New Lows being registered on the New York Stock Exchange, specifically, the elevated level of each series. The point was that, historically, the occasions of large numbers of NYSE New Highs AND New Lows at the same time did not bode well for the stock market. This condition is the main tenet of the Hindenburg Omen and, while often ridiculed, there does appear to be validity to its warning. Today, we look at the same criteria applied to the Nasdaq. And we find similar potential reason for caution.

Specifically, due to the occurrence on July 20, we looked at all instances where the Nasdaq Composite closed at a 52-week high with at least 100 stocks hitting New Highs AND 100 hitting New Lows. Since 1986, July 20 marked the 29th day meeting such criteria. (We understand that 100 is a static number and seemingly not as relevant as New Highs and Lows as a % of total issues. However, the number of issues on the Nasdaq is currently at the low end for the entire period covering our NH/NL database (since 1986). Thus, if anything, it makes current signals more relevant, as shown below).

These were the months marking the occurrences:< ...

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