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25Sep2015 Market Update: Up, Down, The Markets Are Going Nowhere Fast, Markets Open Higher, But Nothing Spectacular, Sideways Channel Remains Intact

Written by Gary

U.S. markets opened higher as expected, well over 1% after after Federal Reserve Chairwoman Janet Yellen reassured investors that the U.S. economy is strong enough to support an interest-rate increase. The large caps have traded sideways in a very narrow channel at the morning highs while the Nasdaq lost ground after opening.

Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 1.01%, while the Bovespa is leading the IPC lower. They are down 0.33% and 0.01% respectively.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 66%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 21%
Investors Intelligence sets the breath Above 50 bullish 30% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -11.64 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 21.52% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 36.75% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 37.20% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 21.71 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 75.57 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,926

What Is Moving the Markets

Here are the headlines moving the markets.

Volkswagen rigged tests on 2.8 million cars in Germany, Berlin says

WOLFSBURG, Germany (Reuters) - Volkswagen rigged emission tests on about 2.8 million diesel vehicles in Germany, the country's transport minister said on Friday, nearly six times as many as it has admitted to falsifying in the United States.

Goodbye $100 Bill? Ex-Central Banker Demands All High-Denomination Banknotes Should Be Abolished

One week ago, a day after the FOMC shocked most traders and economists by not hiking rates, keeping a very dovish outlook and in fact hinted negative rates may be coming (something Yellen noted further in her speech yesterday), a surprising speech by one of the Bank of England's more cool-headed economists, Andy Haldane, led to even more headscratching when the central banker urged not only the implementation of negative rates but also called for a ban on cash.

Subsequently in a post analyzing what the Fed's NIRP hint really meant, we suggested that while the market is focused on a Fed hike, the real story is the possibility of negative rates (which already are the norm in continental Europe) coming not only to the US but globally, which however may necessitate the partial or full elimination of cash as a monetary medium.

Fast forward to today, when we get yet another "very serious policy maker" confirm that cash as we know it may be on the endangered species list - again, a necessary precondition to make global NIRP effective - when overnight former Bank of England central banker, Charles Goodhart, told a London audience that bills such as the Swiss National Bank's 1,000-franc note and the European Central Bank's 500-euro note should be abolished, adding this "move that might also prove beneficial by trimming interest rates."

So one week after a BOE-er calls for elimination ...

The Bank Doing God's Work Is Stalking The Man Doing God's Work

Goldman Sachs looks down from on high...

The view from 200 West Street: Pope Francis (@Pontifex) arrives @Sept11Memorial. #PopeinUS #PopeinNYC

â€" Goldman Sachs (@GoldmanSachs) September 25, 2015

Exclusive: Airbus tells A320 suppliers to cut prices 10 percent

PARIS (Reuters) - European planemaker Airbus is pressing suppliers on its A320 jet program to slash prices by at least 10 percent by 2019 in order to make the company's main cash cow more competitive, three people familiar with the matter said.

Wall St. Rises at End of a Volatile Week

Shares of Nike jumped after its results easily beat analysts' expectations.

"Nothing Is Working" - The Markets Just Aren't That Into You

Via ConvergEx's Nicholas Colas,

Netflix may be the only S&P 500 name that has doubled in 2015, but it's not really the most important stock in the index. First, there is Amazon, up 72% on the year. The online retailer is the single reason the large cap Consumer Discretionary sector is up on the year, for without AMZN's 9% weighting that group would be down over 3% instead of 3.4% higher. Then there is UnitedHealth, 20% higher on the year, which is enough to make Health Care "Green on the screen" for 2015. Without it, that sector would also be negative in 2015. Why all the fuss? Because these are the only industry groups in the S&P 500 that are up for the year, but it's all because of those 2 stocks.

Pull back the curtain on the entire set of global capital markets, and the story is similarly dreary. Domestic bonds? Down 1-5%. Precious metals? Down 3-4%. Developed economy equities? Down 6%. Emerging economies? Down 17%. Fourth quarter 2015, which starts in 4 trading days, will be a lively period as investors work out which of these asset classes will go positive and which will sink further. In short, for many active investors the year comes down to the next 3 months.

With less than 100 calendars days - and only 69 trading days - left in 2015 it's not too early to consider what kind of year we've had in capital markets. Simply put, it stinks. That assessment isn't just because of the -6.1% return for the S&P 500 year to date. Rather, it is because essentially nothing has been working. Consider:

New iPhones hit stores, record sales expected in first weekend

SAN FRANCISCO/SYDNEY (Reuters) - The iPhone 6s and 6s Plus hit stores around the world on Friday, at the start of what is expected to be a record weekend for sales of Apple Inc's marquee product.

Why Boehner's Resignation Is Good for Markets and the Fed

The outgoing Speaker of the House may now be able to cut a budget deal without support from conservative Republicans.

US Senator Demands Ukraine "Walk Away" From Debt Payments To Russia

Oh, the irony. A senator of the world's largest creditor nation has demanded America's allies do 'whatever it takes' to support Ukraine in breaking international law by refusing to pay back $3bn of debt owed to Russia in December. As RT reports, US Senator Chris Murphy of the Foreign Relations Committee exclaimed, "the international community should make it clear that we should take whatever steps necessary to give Ukraine the legal cover it needs to walk away from that debt... I don't think Ukraine should be obligated to pay Russia back a dime." One can only wonder how US's creditors will feel about this perspective (maybe China and EM are already showing theirs).

In late August, a creditor committee led by Franklin Templeton (which owns about $7 billion of Ukrainian bonds) agreed a 20 percent write-off of some $18 billion worth of Eurobonds. Repayment of the remaining amount will be transferred from 2015-2023 to 2019-2027.

Russia has refused to accept Ukraine's haircut, saying it takes no part in "the so-called debt operation" and recommended that Kiev pay in full and on time to avoid "both litigation costs and penalty interest for overdue payments."

The US has been "treating Russia with kid gloves on this question of the debt that Ukraine owes it," Murphy commented as RT notes...

The US and other countries should ...

Global Markets: It's Getting Ugly Out There

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

We also discussed the most critical systemic sources of risk in global markets.

You'd have to be in full denial mode not to see that it's getting ugly out there in global markets: currencies are melting down, trade and shipping are tanking, commodities are swooning and global stock markets are increasingly on central-bank life support.

Gordon Long and I recently discussed just how ugly it might get in a 28-minute video program.

One focus was Gordon's forecast that the market may yet recover from its current downtrend and trace out a M Top: one more buy the dip rally that would then be followed by a bone-crushing downtrend as the wheels completely fall off the global "growth" story.

We also discussed a few of the most critical systemic sources of risk in global markets:

1. There's too much debt globally; public and private debt has skyrocketed since 2008.

2. Mal-investment due to perverse incentives: corporations borrow money for stock buybacks rather than to invest in new productive capacity

3. Stagnant income/revenues: households, companies and nations cannot support more debt

4. The rise of high-frequency trading (HFT) has increased the odds of flash crashes and instability

5. The rising U.S. dollar has triggered capital flight from emerging markets and China

6. China's economy is grinding to a halt, crushing demand for commodities and commodity-dependent economies

7. Opaque banking: shadow banking in China, dark ...

JPMorgan reaped $150 million dividend from Henry Bath before sale: filing

NEW YORK (Reuters) - JPMorgan Chase & Co reaped a $150 million dividend from its metals storage business Henry Bath & Son before selling its physical commodities business last October, as the firm reported its first loss in over a decade, a filing on Thursday showed.

Wall Street rises as Yellen eases fears of slowing growth

(Reuters) - U.S. stocks were higher in late morning trading on Friday after Federal Reserve Chair Janet Yellen said she expects interest rates to be raised this year, easing concerns about slowing global growth and prompting a rally in bank shares.

The Stock Markets Of The 10 Largest Global Economies Are All Crashing

Submitted by Michael Snyder via The Economic Collapse blog,

You would think that the simultaneous crashing of all of the largest stock markets around the world would be very big news. But so far the mainstream media in the United States is treating it like it isn't really a big deal.

Over the last sixty days, we have witnessed the most significant global stock market decline since the fall of 2008, and yet most people still seem to think that this is just a temporary "bump in the road" and that the bull market will soon resume. Hopefully they are right.

When the Dow Jones Industrial Average plummeted 777 points on September 29th, 2008 everyone freaked out and rightly so. But a stock market crash doesn't have to be limited to a single day. Since the peak of the market earlier this year, the Dow is down almost three times as much as that 777 point crash back in 2008. Over the last sixty days, we have seen the 8th largest single day stock market crash in U.S. history on a point basis and the 10th largest single day stock market crash in U.S. history on a point basis. You would think that this would be enough to wake people up, but most Americans still don't seem very alarmed. And of course what has happened to U.S. stocks so far is quite mild compared to what has been going on in the rest of the world.

Right now, stock ...

NSA Director Admits that Sharing Encryption Keys With the Government Leaves Us Vulnerable to Bad Guys

US Senator Ron Wyden asked the new NSA boss - General Mike Rogers - at a Senate Intelligence Committee hearing today:

As a general matter, is it correct that anytime there are copies of an encryption key — and they exist in multiple places — that also creates more opportunities for malicious actors or foreign hackers to get access to the keys?"

NSA chief Rogers replied:

[It] depends on the circumstances, but if you want to paint it very broadly like that for a yes and no, then I would probably say yes.

Here's the exchange.

Background here. More.

Stronger U.S. Second Quarter Growth Backs Case for Fed Hike

The U.S. economy expanded more than previously estimated in the second quarter on stronger consumer spending and construction, backing the case for an interest rate rise before the end of the year despite data sounding a note of caution for September.

Final September 2015 Michigan Consumer Sentiment Up Slightly from Preliminary Reading

by Doug Short, Advisor Perspectives/

The University of Michigan Final Consumer Sentiment for September came in at 87.2, an increase from the 85.7 Preliminary. had forecast 86.7 for the September Final.

Stronger U.S. second quarter growth backs case for Fed hike

WASHINGTON (Reuters) - The U.S. economy expanded more than previously estimated in the second quarter on stronger consumer spending and construction, backing the case for an interest rate rise before the end of the year despite data sounding a note of caution for September.
< ...

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