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16Oct2015 Market Update: Averages Barely In The Green, Tough Uphill Sledding Ahead, Averages May Be Rolling Over

Written by Gary

Markets opened higher as expected making the SP500 2020 level a support and the 2040 is the resistance now. Averages have sea-sawed sideways in a narrow band consolidating for the next move which concerned investors fear is downward. Charts below depict the fear graphically that even if the 2040 is broken the 2053 becomes the almost impossible resistance to penetrate.

Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.50% while the S&P 500 gains 0.06%. The Bovespa is off 0.38%.

The SP500 held the 2020 area today so far as anticipated...a level to keep on the radar. S&P retesting 2020 level...again. 2025 is our stop on a breakout.

Should 2020 break with authority the next big level we will be looking for is 2040 (the critical distribution top breakdown level in August). Yesterday we were stopped out of our short position above key 2020 resistance. That resistance has now become a focal point of support. A first good test of that level should be met with buyers. The critical 2040 level becomes the next upside objective.


Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 63%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 46%
Investors Intelligence sets the breath Above 50 bullish 40.3% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. 55.00 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 32.23% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 46.64% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 52.40% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 20.23 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 78.01 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,388

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. consumer sentiment rebounds; industrial output weak

WASHINGTON (Reuters) - U.S. consumer sentiment rebounded strongly in early October, suggesting that the economic recovery remained on track despite headwinds from a strong dollar and weak global demand that have weighed on the industrial sector, particularly manufacturing.

Honeywell revenue misses on weak demand from oil, gas customers

(Reuters) - Honeywell International Inc , a maker of industrial, aerospace and auto components, reported lower-than-expected quarterly revenue, hurt by weak demand from oil and gas customers.

Dollar erases most of its weekly loss versus the euro

Crude oil outlook in less than 90 seconds: via @YouTube

GE beats profit expectations as aviation counters weak oil segment

(Reuters) - General Electric Co reported a better-than-expected quarterly profit on Friday, helped by cost cuts and higher sales of its jet engines business that offset struggles in its oil and gas segment.

Google book-scanning project legal, says U.S. appeals court

NEW YORK (Reuters) - A U.S. appeals court ruled on Friday that Google's massive effort to scan millions of books for an online library does not violate copyright law, rejecting claims from a group of authors that the project illegally deprives them of revenue.

Oil rises after week of heavy losses

LONDON (Reuters) - Oil prices rose on Friday, snapping a week-long decline as investors closed positions at the end of a volatile week that saw prices slide nearly 10 percent on renewed signs a global supply glut was here to stay.

Yum Brands to keep up Russia expansion as consumers shun fine dining

MOSCOW (Reuters) - U.S. fast-food giant Yum Brands Inc said on Friday it planned to keep up the pace of expansion of its KFC chain in Russia, seeing an opportunity in a crisis that is leading consumers to seek cheaper treats over fine meals.

Twitter Jumps After Steve Ballmer Confirms He Bought 4% Stake

When @Steven_Ballmer tweeted last night about acquiring a 4% stake in TWTR, many thought he was either hacked or the account was bogus. It appears, given Bloomberg headlines that this has been confirmed. A 4% stake makes him a bigger holder than Jack Dorsey who owns 3.2%.

The initial tweet...

Good job @twitter,@twittermoments innovation, @jack Ceo, leaner, more focused. Glad I bought 4% past few months. Like @alwaleedbinT move too

â€" Steve Ballmer (@Steven_Ballmer) October 16, 2015

And Bloomberg appears to confirm at 1132ET:



Steve Ballmer confirms in e-mail to Bloomberg News that he owns a 4% stake in Twitter.

The result...

Don't get too excited though...

Just saying.

â€" Rudolf E. Havenstein (@RudyHavenstein)

Yellen's "Favorite" Labor Indicator Tumbles: Job Openings Drop Most Since 2009

One month ago, when the JOLTS data showed the highest number of job openings in history, rising by a near record 430,000 to 5.8 million vacant positions, most speculated that this data - considered to be Janet Yellen's favorite indicator of slack in the labor market now that the unemployment rate has become utterly unreliable due to the 94 million Americans out of the labor force - had sealed the fate of a September rate hike.

It did not, as instead the Fed decided to shift to its 4th mandate (the 3rd being the stock market), namely the "global environment" as the reason not to tighten monetary conditions.

But while the JOLTs data turned out to be useful to "confirm" a stronger economy, even if it was roundly rejected when it was expected to be the fulcrum catalyst for monetary policy change, we are confident it will be completely ignored this month when moments ago the BLS revealed that in August, the number of job openings tumbled back down by 298,000 to 5.37 million: far below expectations and the biggest monthly drop since the 301,000 slide in March of 2009.

So was this the job openings peak of the current cycle?

The answer will have to wait until next month as the JOLTS series is consistently revised and remarkably unreliable (and frequently made up: recall it was this site that caught the BLS fabricating data back in 2013), however another series that may serve as a guide is the JOLTS total hires vs the cumulative change in payrolls over the past year. Both of these s ...

Rate Hike Doubts Supporting Stocks

Global stocks remained supported Friday by expectations that the U.S. Federal Reserve may hold off from raising interest rates this year.

Liongate Capital Management to Shut Down

Liongate Capital Management LLP, one of London’s best-known hedge-fund investors, which ran billions of dollars at its peak, is to shut down, according to a person familiar with the matter.

Goldman Fires About 20 Staffers for Cheating on Tests

Goldman Sachs Group Inc. is firing about 20 junior employees for cheating on internal training tests, according to a person familiar with the matter.

09 October 2015: ECRI's WLI Growth Index Declines and Remains In Contraction

ECRI's WLI Growth Index which forecasts economic growth six months forward - declined and remains in negative territory. This index had spent 28 weeks in negative territory, then 15 weeks in positive territory - and now is in its ninth week in negative territory.

Metals Stocks: Gold futures retreat from 4-month high as dollar climbs

Gold prices eye first drop in six sessions.

Currencies: Dollar erases most of its weekly loss versus the euro

The dollar-yen pair finally breaks free of tight range on fears about the U.S. economy

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