FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

09Nov2015 Market Update: Averages Down One Percentage Point, Oil Holding At Support, Investors Concerned About Fed Rate Increase And Global Growth Fears

Written by Gary

US markets are most likely to close down today as the odds of a Fed rate hike in December looms large after a surprisingly strong jobs report last week turns investors cautious. Session short-term indicators are only modestly bearish in light of the over one percentage point market decline this morning.

Here is the current market situation from CNN Money

North and South American markets are sharply lower today with shares in Mexico off the most. The IPC is down 1.89% while Brazil's Bovespa is off 1.41% and U.S.'s S&P 500 is lower by 1.31%.

Crude oil is holding at the high 43's support and the US dollar has slipped back to the low 99's. So far all market supports have held and the HFT computers will probably trim more losses before the closing bell.

09/11/2015 11:20 S&P coming up on 2070 pivot

Admittedly, the break of trend support and the H&S neckline has not played out as smoothly as we had hoped since initially pointing out 2070 as a target on a breakdown. The lack of continuity in price action has kept us at bay. We continue to search for the best possible risk/reward set-up in US indices.

The bearish potential of overbought conditions coupled with poor market breadth makes us want to reside in the bear camp, but the end-of-year bullish seasonality factors in to be a bit of a positive tailwind.

The Fed's intentions to raise rates next month is working against the market right now, but it is unclear to what extent actually. Stocks have oscillated in their reactions to the possibility of higher rates. On one hand, higher rates indicates the confidence the Fed has in economic conditions (although we don't view them as that strong), but on the other hand higher rates equals higher cost of capital.

We'll continue to monitor price action and see what turns up. (Click on chart for larger view)

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 70%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 67%
Investors Intelligence sets the breath Above 50 bullish 51.2% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -4.77 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 37.04% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 55.58% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71.60% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.55 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 80.10 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,420

What Is Moving the Markets

Here are the headlines moving the markets.

Spain's Mango to shut 450 U.S. sales outlets

MADRID (Reuters) - Spanish fashion chain Mango will close 450 sales outlets in the United States early next year after ending a five-year deal to display its clothing lines at department store J.C. Penney , a spokesman said.

Volkswagen offers U.S. diesel owners $1,000 in credit cards

DETROIT (Reuters) - Volkswagen AG will offer credit cards worth $1,000, of which half is to be spent at VW and Audi dealerships, to U.S. owners of certain diesel models that do not comply with government emissions standards, VW's U.S. subsidiary said on Monday.

Boeing eyes defense services business as key for growth

DUBAI (Reuters) - A senior Boeing Co. executive on Monday described the loss of an $80 billion U.S. bomber contract last month as a "minor setback" and said the company remained determined to expand its defense business.

Valeant to update investors on operations on Tuesday

(Reuters) - Valeant Pharmaceuticals International Inc , under scrutiny for drug pricing and inflating revenue, will hold its second conference call in two weeks to allay investor concerns over its operations.

Dish misses revenue estimates as more subscribers ditch pay-TV

(Reuters) - Dish Network Corp reported quarterly revenue that fell short of market estimates as more subscribers dropped its pay-TV service and growth in its online streaming service Sling TV showed signs of faltering.

Wall St. falls more than 1 percent on global growth fears

(Reuters) - U.S. stock indexes fell 1 percent in late morning trading on Monday, their biggest fall in six weeks, as weak Chinese trade data and a cut in the OECD's global growth forecast sparked fears about a global economic slowdown.

The US Dollar Bull Market Could Trigger a $9 Trillion Debt Implosion

The US Dollar rally, combined with the ECB's policies and the Fed's hint at raising rates in December, is at risk of blowing up a $9 trillion carry trade.

When the Fed cut interest rates to zero in 2008, it flooded the system with US Dollars. The US Dollar is the reserve currency of the world. NO matter what country you're in (with few exceptions) you can borrow in US Dollars.

And if you can borrow in US Dollars at 0.25%... and put that money into anything yielding more... you could make a killing.

A hedge fund in Hong Kong could borrow $100 million, pay just $250,000 in interest and plow that money into Brazilian Reals which yielded 11%... locking in a $9.75 million return.

This was the strictly financial side of things. On the economics side, Governments both sovereign and local borrowed in US Dollars around the globe to fund various infrastructure and municipal projects.

Simply put, the US Government was practically giving money away and the world took notice, borrowing Dollars at a record pace. Today, the global carry trade (meaning money borrowed in US Dollars and invested in other assets) stands at over $9 TRILLION (larger than the economy of France and Brazil combined).

This worked while the US Dollar was holding steady. But in the summer of last year (2014), the US Dollar began to breakout of a multi-year wedge pattern:

Why does this matter?

Because the minute the US Dollar began to rally aggressively, the global US Dollar carry trade began to blow up. It is not coincidental that oil commodities, and emerging market stocks took a dive almost immediately after this process began.

China's Central Bank Buys Another 14 Tons of Gold: Bullion Falls To 3 Month Low

China's Central Bank Buys Another 14 Tons of Gold: Bullion Falls To 3 Month Low

- PBOC declared gold reserves now about 55.38 million troy ounces or 1,722.5 metric tonnes

- Central bank gold rose to $63.26 billion by end-month - less than 2% of $3.53 trillion FX reserves

- China disclosed on July 17th that its gold holdings had surged 57% since 2009

- China officially owns around 1,720 tonnes of gold â€" true total figure likely much larger

- China’s total gold holdings likely higher as also owns gold in CIC

China's central bank likely added another 14 tonnes of gold to its reserves in October as the People's Bank of China (PBOC) continues to allocate to gold bullion as part of a plan to diversify its massive $3.53 trillion in foreign-exchange reserves and position the yuan as a global trading and reserve currency.

Demand 'Stimulus' Has Not Worked - It's Time To Tell The Truth About Debt


Telling The Truth About Debt

Last month I referred to the recent opinion of George Bompas QC that IFRS accounting criteria do not meet the statutory obligation for UK and EU financial statements to give a true and fair view. I also noted that IFRS 9, the latest attempt of standard-setters to endow loan-loss provisioning with a requisite degree of prudence and objectivity, hardly improves matters because it allows management to assess, subjectively, the probable loss on impaired loans over the following 12 months.

And not just banks: sub-prime lender Cattles Plc was pushed into administration with huge irrecoverable losses in its loan portfolio that were not reflected in its accounts under IFRS accounting rules. Its claim on behalf of unpaid creditors against auditor PwC has now been settled on confidential terms.

A multi-million pound compensation claim has been brought against former directors of Lloyds TSB (now Lloyds Banking Group) by more than 6,000 former shareholders, alleging that the HBOS loan book was vastly overvalued when Lloyds took it over in 2009 - again due to flawed accounting that failed to provide for losses. This issue will not go away until the rules require lifetime provisioning at a loan's inception.

A case study in economic disintegration

Debt management is the order of the day at all levels. Bankers have to lend money in order to make money - even in Greece, where most self-employed business people live on cred ...

Big Banks Could Be Forced to Raise Up to $1.19 Trillion

Global financial regulators published new rules to stop banks from becoming “too big to fail,†which could force the world’s largest lenders to raise as much as $1.19 trillion by 2022 in debt or other securities that can be written off when winding down failing banks.

Stocks Slip as Investors Brace for Rate Increase

U.S. stocks stumbled Monday as investors sold some of the year’s biggest gainers and losers alike as expectations rose that the U.S. Federal Reserve would raise interest rates this year.

Tinder Parent Company Match Group Sets IPO Terms

Match Group on Monday defined the terms of its relationship with Wall Street, saying it plans to raise up to $536.7 million in its long-awaited IPO, valuing Match at up to $3.4 billion.

October 2015 Conference Board Employment Index Suggests No Significant Slowdown in Job Growth Expected through 1Q2016

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months - improved, but the rate of growth declined relative to last month. Consider that this projected growth is six months from now.

Europe Markets: European stocks end lower as M&A hopes fade

European stocks finished lower Monday, hurt in part by disappointment over potential merger developments for InterContinental Hotels Group PLC and auto maker Renault SA.

Earnings Summary for Today

Earnings Calendar provided by

leading Stock Positions

Leading Stock Quotes powered by

Current Commodity Prices

Commodities are powered by

Current Currency Crosses

The Forex Quotes are powered by

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

Click here for Historical Releases Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Live Market


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Comments on Feyerabend’s ‘Against Method’, Part III
Taking a Wrench to Healthcare
News Blog
Baby Remarkably Survives Being Born With Heart Beating Outside Her Chest
October 2016 Conference Board Consumer Confidence Declines
Richmond Fed Manufacturing Survey Remains In Contraction In October 2016.
October 2016 Chemical Activity Barometer Continues to Signal Improving Economic Growth
Case-Shiller Home Price Index August 2016 Year-over-Year Rate of Growth Marginally Improves
Russia Falls Into Old Habits
Infographic Of The Day: Commodity Update, Is The Summer Slump Over
Early Headlines: Asia Stocks Mixed, Oil Mixed, Voting Fraud, Pres. Forecast Little Changed, CETA Not Dead, Generous Iraqis, Terrorists In Pakistan, Duterte Wants Divorce From US And More
October 24, 2016 Weather and Climate Report - La Nina / El Nino?
Most Read Articles Last Week Ending 22 October
Londoners Most Uneasy About Chatting To Strangers
Average Gasoline Prices for Week Ending 24 October 2016 Now Higher Than One Year Ago
Earnings And Economic Reports: Week Starting 24 October 2016
Investing Blog
Slow Motion Torture
The Week Ahead: How Long For This Trading Range?
Opinion Blog
What Triggers Collapse?
The Beer Goggles Stock Market
Precious Metals Blog
Preparing For Post-Election Social Unrest
Live Markets
25Oct2016 Market Close: US Stock Market Indexes Closed Down Fractionally, Investors Remain Concerned With Friday's Fed Rate Change, Crude And US Dollar Down, Gold Up
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved