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20Oct2015 Market Update: US Averages In The Red, Further Decline Today Is Expected, SP500 2040 Important Resistance Rejected

Written by Gary

The SP500 eased up to its 2040 resistance and backed off 10 points where it is now in a downtrend. WTI oil fell to the 45 level and gold and the US dollar seem to be trending upward.

Markets are expected to close in the red today.

Here is the current market situation from CNN Money

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 72%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 52%
Investors Intelligence sets the breath Above 50 bullish 41.2% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. 43.23 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 32.85% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 47.88% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 55.40% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 20.69 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 78.54 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,382

What Is Moving the Markets

Here are the headlines moving the markets.

Harley-Davidson third-quarter profit falls, stock hits two-year low

(Reuters) - Motorcycle manufacturer Harley-Davidson Inc. on Tuesday posted lower quarterly earnings, reduced profit guidance and said it planned to eliminate jobs, sending the company's shares to a two-year low.

Yum Brands bows to investor pressure, to split off China unit

(Reuters) - KFC owner Yum Brands Inc said it plans to split off its China business, which has been besieged by food scandals and marketing missteps, bowing to pressure from an activist shareholder.

BNY Mellon's cost-cutting drive hit by software outage

BOSTON (Reuters) - Bank of New York Mellon Corp on Tuesday reported third-quarter results that beat expectations, but said its cost-cutting drive was interrupted by a summertime software outage that forced it to compensate clients.

IBM shares hit five-year low after disappointing results

(Reuters) - Shares of International Business Machines Corp hit a five-year low on Tuesday, a day after the company's lackluster results and forecast showed that it would be a while before its focus on lucrative cloud computing business makes up for revenue lost to divestitures.

Hedge funds suffer biggest quarterly drop in assets since 2008: data

BOSTON (Reuters) - Hedge funds suffered their biggest quarterly loss in assets since the financial crisis during the three months that ended in September, data released on Tuesday showed, putting the industry on track for its worst year since 2008.

Airbus taps Siemens executive to run defense business

PARIS/FRANKFURT (Reuters) - Airbus Group has named Siemens executive Dirk Hoke as the next head of its Defence and Space division, recruiting an industrial high-flyer with no previous aerospace experience to regenerate its second-largest division.

United Tech profit beats forecasts; buyback, restructuring planned

(Reuters) - United Technologies Corp reported a drop in quarterly profit on Tuesday that still beat analyst expectations, and its chief executive said the industrial manufacturer would announce a significant restructuring before the end of the year.

Bond Market Begins To Panic: 4-Week Auction Bids Plunge To 2006 Level

Less than two weeks ago, when previewing the upcoming debt ceiling battle which is shaping up to be far more contentiously than most expected, we said to "keep an eye on T-Bill yields for the turning point when the market decides this situation is becoming serious."

Things officially turned serious yesterday, when as we reported, T-Bill yields spiked after the latest Jack Lew warning that the Treasury's emergency measures would be exhausted on November 3, or in less than 2 weeks, leading to a surge in mid-November T- Bill yields

But where the "serious" officially crossed over into "panic" territory was moments ago when the US Treasury sold $5 billion in T-Bills.

As expected, after five weeks of 0.000% high yields, today's yield soared in sympathy with what is happening in the secondary market.

But where it became decidedly clear that while stocks continue levitating without a care in the world, the bond market is now convinced that the 2015 debt ceiling fight will be worst than both the 2011 and 2013 iterations, is in the number of bids tendered into the auction.

At just $22.4 billion, this was less than half last week's $48.3 bil ...

USDJPY Storms Higher As "120 Tractor Beam" Reactivated

Just as we noted last night, when IBM's dismal earnings were unleashed upon a frantic market, there was only one thing that could save stocks.. USDJPY 120!!

But it seems the "juice" has run out...

Who could have seen that coming?

IBM's result were so bad, 120 is in play

— zerohedge (@zerohedge) October 19, 2015

For Hedge Funds, a Can't-Miss Trade Goes Bust

“Hot money†gets burned after hedge-fund and private-equity managers are caught in crude oil’s fall.

Tech Startups Feel an IPO Chill

Sky-high valuations are starting to backfire on some Silicon Valley companies that are trying to raise more money or go public.

Too many potholes? Blame millennials

A report by Standard & Poor’s Ratings Services shows millennials are using less gas, leading to lower rates of tax collection.

Europe Markets: European stocks close with losses, retreat from 2-month high

Declines among commodity producers help to pull the region’s benchmark away from its best level since late August.

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