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24Sep2015 Market Update: Averages Sink Lower After Opening Down, WTI Oil Volatile And Testing Support, Indexes Off Over One Percentage Point

Written by Gary

Markets opened lower and tested the lower channel support and conjoined Bollie Band while WTI oil is very volatile after testing its support.

The averages have been partially pulled lower by declines among big industrial firms and auto makers while investor worries of further market declines are causing some to jump ship. Markets are not expected to recover session losses going into the afternoon session.


Here is the current market situation from CNN Money

North and South American markets are broadly lower today with shares in Mexico off the most. The IPC is down 1.27% while U.S.'s S&P 500 is off 1.19% and Brazil's Bovespa is lower by 0.79%.

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 20%
Investors Intelligence sets the breath Above 50 bullish 31.7%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -4.50
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 22.20%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 36.75%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 37.00%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 20.91
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 73.96
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,761

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. business spending plans measure slips in August

WASHINGTON (Reuters) - A gauge of U.S. business investment plans fell slightly in August while the number of Americans filing new applications for jobless benefits barely rose last week, signs that global economic headwinds were doing little to impede U.S. growth.

GE agrees export financing from UK, may create 1,000 jobs

(Reuters) - General Electric Co said on Thursday it reached an agreement with Britain's export credit agency for up to $12 billion in financing, possibly creating as many as 1,000 jobs in the country.

Porsche's Mueller called in to steer VW through crisis

BERLIN (Reuters) - Porsche boss Matthias Mueller once joked that he was too old to run Volkswagen but the 62-year-old now looks certain to be given the task of steering the German car maker through the worst business crisis in its history.

Inflation Watch - Butter Prices Hit All-Time Record High

Butter prices hit $3.10 per lb today in Chicago trading - a record high - as it appears the expectations of production increases after the EU milk quota system expired in March have proved "wildly optimistic." Of course, no one should complain at the rising cost of staples like butter (or toilet paper), just ask Jamie Dimon... "let them eat iPhones."

Charts: Bloomberg

Groupon's Latest Deal Isn't Worth It

With uncertain growth prospects, Groupon's slashed market value still doesn't present a bargain.

Target appoints new operations leader to identify customer needs faster

CHICAGO (Reuters) - Target Corp on Thursday appointed Anu Gupta to a newly created operational role that is expected to help the retailer anticipate customer needs quickly.

Dutch Commodity Trading Firm Suffers Massive Loss, Blames It On "Rogue Trader"

Two months ago, weeks before the carnage in Glencore started in earnest, we asked a simple question:

Which will be first: Trafigura, Mercuria or Glencore

â€" zerohedge (@zerohedge) July 22, 2015

Judging by today's collapse in Glencore price - a company whose CDS we said in March 2014 should be aggressively bought - which is now trading at an all time low below 100p on a Goldman report which confirmed what we have been saying all along (more on that shortly), it does appear that the Swiss commodity giant and copper miner will be the first mega-commodity trader with trillions in counterparty exposure to be "Lehmaned."

But going back to July 22, what our tweet hinted at was not so much that one of the three commodity traders would be the first to blow up, as that the entire commodity-trading space is in jeopardy as a result of the collapse in commodity prices and carried inventory which has not been market to market in months (see the recent implosion in Jefferies fixed income results).

Indeed, one of the most surprising developments in recent months has been the relative scarcity of any high-profile commodity blow-ups or trader snafus, despite the tumbling commodity prices.

That changed today when Dutch grain-trading firm, Nidera BV (whose name is an acronym consisting of the countries in which it operates: Netherlands, India, Deutschland, England, Russia, Argentina) has suffered a crushing blow as a result of a "rogue trader" who ...

Oil seesaws; Wall Street tumble offsets Cushing draw data

NEW YORK (Reuters) - Oil prices seesawed on Thursday as tumbling stock prices on Wall Street offset bullish sentiment from inventory draws at the U.S. crude delivery hub cited by a market data provider.

Volkswagen to pick Porsche boss as new CEO: source

BERLIN (Reuters) - Volkswagen will name Matthias Mueller, the head of its Porsche sports car brand, as its chief executive as it tries to recover from a scandal over its rigging of U.S. vehicle emissions tests, a source close to the matter said.

French Joblessness Surges To Record High

Since Francois Hollande was elected (in May 2012), France has seen its joblessness ranks rise 36 of 39 months by a stunning 648,000. The lastest month added another 20,000 as it appears the brief respite in June and July is well and truly over. At 3.571 million, this is the highest number of jobseekers France has ever had...

Record high joblessness, well played Hollande!

Is it time for a convergence?

Charts: Bloomberg

Caterpillar slashes revenue forecast, may cut up to 10,000 jobs

(Reuters) - Caterpillar Inc slashed its revenue forecast for 2015 by $1 billion and said it could cut up to 10,000 jobs through 2018, amid a downturn in the mining and energy industries.

Kansas City Fed: Manufacturing Contraction Continues in September 2015

Of the four regional manufacturing surveys released to date for September, all are in contraction.

DAX Crash Continues - Closes Below Black Monday At 10-Month Lows

For USD investors, the collapse in German stocks has crushed returns to the lowest in 2 years. DAX's collapse this week leaves it closing at Black Monday lows, the lowest since Dec 2014. Perhaps most stunning is German stocks down over 20% since Q€ began...

Absent Black Monday, this is the worst 5-day run for German stocks since the middle of the EU crisis in August 2011.

Charts: Bloomberg

Wall Street falls sharply as Caterpillar weighs

(Reuters) - U.S. stocks fell about 1.5 percent in late morning trading on Thursday as Caterpillar's sales forecast cut dragged down industrials and exacerbated concerns of slowing global economic growth.

Caterpillar Shocker: Industrial Bellweather To Fire Up to 10,000; Slashes Revenue Outlook

Just three days ago after looking at the latest CAT retail sales, we asked in stunned amazement "What On Earth Is Going On With Caterpillar Sales?" and showed the following two charts:

We now know the answer. The company was merely preparing to shock its investors with a $1.5 billion cost-cutting announcement, which includes the firing of as much as 10,000 people through 2018. Far worse, however, is the company finally admitting that it can no longer pretend reality does not exist, and cut its revenue outlook by 5% with the admission that "2016 would mark the first time in Caterpillar's 90-year history that sales and revenues have decreased four years in a row."

Of course, our readers already knew that.

From the ironically titled "Building for a Stronger Future" press release:

Caterpillar Inc. (CAT) today announced significant restructuring and cost reduction actions that are expected to lower operating costs by about $1.5 billion annually once fully implemented. The cost ...

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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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