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04Nov2015 Market Update: Markets Sell-Off Fractionally, Crude Post Large Losses And The US Dollar Continues To Melt Up

Written by Gary

Markets opened higher as expected, but spent the morning moving lower where all of the major indexes are fractionally, but solidly in the red. WTI crude was sailing in the 48's when crude capacity came in at plus 2.9 million barrels and the bottom dropped out. Crude trading at 1 pm at mid $46 and the US dollar continues to melt up through the low 98's.

The market rally is over for today, bears are in charge and short-term session indicators are bearish.


Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.14%, while the S&P 500 is leading the Bovespa lower. They are down 0.39% and 0.35% respectively.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 72%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 74%
Investors Intelligence sets the breath Above 50 bullish 50.5%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +34.24
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 40.16%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 56.07%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71.80%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.30
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 81.05
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,561

What Is Moving the Markets

Here are the headlines moving the markets.

Yellen: Economy 'performing well,' December 'live' for rate hike

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen on Wednesday pointed to a December interest rate "liftoff" but a slow path of increases from then on as the central bank continues to nurture an economic recovery.

U.S. economic data seen supporting December interest rate hike

WASHINGTON (Reuters) - U.S. private employers maintained a steady pace of hiring in October and a jump in new orders buoyed activity in the services sector, suggesting the economy was strong enough to support an interest rate hike from the Federal Reserve in December.

Pacific trade pact details could be released this week: source

WASHINGTON (Reuters) - Pacific trading partners are working toward releasing details of a sweeping free trade pact, designed to free up exports of goods ranging from medicines to milk, as early as the end of this week, a person familiar with the text said on Wednesday.

Euro zone growth weak in October, China services rally

LONDON (Reuters) - Euro zone private business growth remained tepid last month but activity in China's services industry expanded at its fastest pace in three months, easing concerns about persistent weakness in its economy, surveys showed on Wednesday.

Wall St. slips as Yellen says December hike 'live' possibility

(Reuters) - Wall Street was lower on Wednesday morning after Federal Reserve Chair Janet Yellen said a rate hike in December was a "live" possibility, but not a certainty.

The Last Two Times The US Jobs Market Was This Bifurcated, Things Ended Badly

Welcome to the most bifurcated US jobs market ever... According to ISM, employment is best since 2005 for the Services 'economy' and the worst since 2009 for the Manufacturing 'economy'. The last two times the labor market was so divergent... did not end well.

The bifurcated job market...

The last two times this happened, things did not end well...

Of course, this should all be ignored as transitory now given that Yellen just greenlit December no matter what.

Charts: Bloomberg

Yellen Says Negative Rates On The Table "If Outlook Worsened"

As the market now diligently calculates the suddenly surging odds of a December rate hike, here's Yellen with a preview of what will happen once the rate hike cycle is aborted...


YELLEN SAYS IF OUTLOOK WORSENED FED MIGHT WEIGH NEGATIVE RATES

YELLEN SAYS NEGATIVE RATES COULD HELP ENCOURAGE BANKS TO LEND

... just as it was aborted in Japan in August of 2000 when the BOJ also decided to send a signal how much stronger the economy is by hiking 25 bps, only to cut 7 months later and to proceed to monetize not only all net Japanese debt issuance a decade later, but to hold half of all equity ETFs.

The good news:

YELLEN SAYS SHE DOESN'T SEE NEED FOR NEGATIVE RATES NOW

YELLEN SAYS FED SEES ECONOMY ON STEADY PATH OF IMPROVEMENT

Because when have the Fed's forecasts before ever been wrong.

FHFA Head Warns Fannie Mae, Freddie Mac May Need Another Taxpayer Bailout

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Yesterday, we learned that Fannie Mae recently rolled out a new program known as “Home Ready,†which would allow borrowers to obtain a 3% downpayment mortgage with no minimum cash contribution.

Now we learn this.

From MarketWatch:

WASHINGTON (MarketWatch) â€" Fannie Mae and Freddie Mac are at risk of needing an injection of Treasury capital after the latter reported its first quarterly loss in four years, the director of the Federal Housing Finance Agency said Tuesday.

FHFA Director Mel Watt issued a statement following mortgage-finance company Freddie Mac’s $475 million third-quarter loss, its first quarterly loss in four years.

“Volatility in interest rates coupled with a capital buffer that will decline to zero ...

Caught On Tape: U.S. Army Jeep Rear-Ends A Nuke

With helicopters hovering overhead, and surrounded by an army of security forces, this is how America transports its nuclear weapons. However, as this onlooker captures, amid police harrassment for filming, it appears one of the military trucks was just a little too close and rear-ends a truck carrying a nuclear missile.

As the person recording exclaimed, "The crazy thing is that the fed pulled over and was yelling and waving his hands that I can't record this video. And then a truck rear-ended the nuke."

If this happens on a well maintained street in America, one can imagine the probability of a "happy ending" involving US and Russian fighter jets flying over Syria...

U.S. Stocks Waver on Yellen Testimony

U.S. stocks wavered Wednesday as a congressional hearing with Fed Chairwoman Janet Yellen got underway.

How a BlackRock Bet on African Gold Lost Its Luster

BlackRock fund manager Evy Hambro’s wager on Congo gold shows how conservative investors, once averse to such plays, took more risk during the commodities boomâ€"at their peril.

Probe Widens Into Treasury Debt Auctions

The Justice Department and CFTC have asked banks to turn over information in connection with a broad investigation into whether their traders rigged sales of government debt.

October 2015 ISM Services Index Improves

Written by Steven Hansen

The ISM non-manufacturing (aka ISM Services) index continues its growth cycle, and improved from 56.9 to 59.1 (above 50 signals expansion). Important internals likewise improved and remain in expansion. Market PMI Services Index was released this morning, also is in expansion, and declined..

Economic Preview: 5 things to watch for the Bank of England's Super Thursday

Markets may have their wires crossed over the BOE’s next rate rise, analysts say. Here’s where investors will find clues to the real plan, when the quarterly inflation report, BOE minutes and rate decision statement are released.

The Wall Street Journal: Good news? Tuition has plateaued. Bad news? You're still paying more

Shrinking financial aid curbs impact of slowing college tuition increases

Earnings Outlook: What to expect when SeaWorld reports earnings

SeaWorld is scheduled to report earnings Thursday before the bell, amid continuing controversy.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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