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12Nov2015 Market Update: Oil Falls 2.6% Below Critical Support, SP500 Can't Penetrate 2055 Support, Investors On Tight Rope On What Happens Next

Written by Gary

The SP500 fell below its pivot point (2070) and continued to descend just below a major support (2055) and the rise back up above it. WTI oil fell 2.6% to 41.65, a wake-up call for the black gold bulls, and since risen to a weak resistance were it is now trading, but not expected to cross.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in U.S. off the most. The S&P 500 is down 0.73% while Mexico's IPC is off 0.22% and Brazil's Bovespa is lower by 0.18%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 68%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 56%
Investors Intelligence sets the breath Above 50 bullish 49.8%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -31.39
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 34.21%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 54.14%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 68.60%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.05
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 80.20
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,292

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. labor market data supportive of rate hike

WASHINGTON (Reuters) - New U.S. applications for unemployment benefits last week held steady at levels consistent with a strengthening labor market and job openings rose in September, encouraging signs for the Federal Reserve as it contemplates raising interest rate next month.

Roche to take $1.6 billion charge to close sites in Europe, U.S.

ZURICH (Reuters) - Roche is to stop manufacturing at four sites in Europe and the United States in a move that could mean up to 1,200 job losses as it addresses "current underutilization" resulting from a changing portfolio of medications.

Wall St. falls as commodities weigh

(Reuters) - U.S. stocks were lower on Thursday as a fall in commodity prices weighed on energy and materials stocks and investors studied comments by several Federal Reserve policymakers for clues on a widely-expected interest rate hike next month.

Viacom revenue down, but U.S. ad sales declines ease

(Reuters) - Viacom Inc , the owner of MTV, Comedy Central and Nickelodeon, reported weaker-than-expected quarterly revenue on Thursday, although declines in ad sales for its U.S. cable TV business were not as steep as analysts had anticipated.

Fed should wait with liftoff to see firm inflation signs: IMF note

WASHINGTON (Reuters) - The U.S. Federal Reserve should wait to see firm signs of rising inflation as well as a stronger labor market before hiking benchmark interest rates, an International Monetary Fund paper said on Thursday.

Federal Reserve Admits It Has NO IDEA What It’s Doing

AP reports today:

Federal Reserve Chair Janet Yellen is stressing the need to review the unconventional monetary policies that central banks around the world deployed in response to the 2008 global financial crisis.

She said Thursday that the post-crisis period offers policymakers an opportunity to assess the effectiveness of the tools and better understand the impact of new regulation.

"Policymakers have to carefully weigh the advantages and disadvantages of alternative monetary implementation frameworks in the presence of new policy tools," Yellen said in remarks at a two-day research conference sponsored by the Fed.

Translation: We have no idea what's going on, or whether or policies are helping or making things worse.

Also today, St. Louis Fed Chairman James Bullard said (via Zero Hedge):

The Fed "may need to alter some fundamental assumptions about how Fed policy works if U.S. stays in persistent state of low nominal rates, low inflation."

But the most important thing Bullard said in his speech titled "Permazero" is that the the US may be entering a permanent period of lower inflation and ...

China Panics: Sends Fiscal Spending Through The Roof As Credit Creation Tumbles

Earlier this week, MNI suggested that according to discussions with bank personnel in China, data on lending for October was likely to come in exceptionally weak. That would mark a reversal from September when the credit impulse looked particularly strong and the numbers topped estimates handily.

“One source familiar with the data said new loans by the Big Four state-owned commercial banks in October plunged to a level that hasn't been seen for many years,†MNI reported.

Given that, and given what we know about rising NPLs and a lack of demand for credit as the country copes with a troubling excess capacity problem, none of the above should come as a surprise.

Well, the numbers are out and sure enough, they disappointed to the downside. RMB new loans came at just CNY514bn in October - consensus was far higher at CNY800bn. That was down 6.3% Y/Y. Total social financing fell 29% Y/Y to CNY447 billion, down sharply from September’s CNY1.3 trillion print. Here’s Barclays with the breakdown:

And here's TSF:

As noted above, this is likely attributable to three factors.

First, banks' NPLs are far higher than the o ...

Did Russia Just "Gently" Threaten The USA?

Authored by The Saker,

Interesting stuff today. A major Russian TV channel just aired a report about Putin meeting with his top military commanders. I don't have the time to translate what Putin said word for word, but basically he said that the USA had refused every single Russian offer to negotiate about the US anti-missile system in Europe and that while the US had initially promised that the real target of this system was Iran, now that the Iranian nuclear issue had been solved, the US was still deploying the system. Putin added that the US was clearly attempting to change the world's military balance. And then the Russian footage showed this:

Status6

According to the Kremlin, it was a mistakenly leaked secret document. And just to make sure that everybody got it, RT wrote a full article in English about this in an article entitled "'Assured unacceptable damage': Russian TV accidentally leaks secret 'nuclear torpedo' design". According to RT

The presentation slide titled "Ocean Multipurpose System: Status-6" showed some drawings of a new nuclear submarine weapons system. It is apparently designed to bypass NATO radars and any existing missile defense systems, while also causing heavy damage to &ldquo ...

Just Stop Talking! - All 5 Fed Speakers Send Stocks Lower

When FedSpeak Fails...

The only one who can save stocks now is Stan Fischer at 1800ET...

Global Stocks Slip as Investors Study Central Bank Clues

Global stock markets slipped as investors considered clues on the next moves by major central banks.

Glencore Stock Plunges as Copper Prices Decline

Glencore shares plunged as much as 12.6% as copper prices fell to six-year lows. The company’s share price has shed more than 68% this year as investors worry about its high levels of debt.

September 2015 JOLTS Job Openings Improve Predicting Improving Jobs Numbers

Written by Steven Hansen

The BLS Job Openings and Labor Turnover Survey (JOLTS) can be used as a predictor of future jobs growth, and the predictive elements show that the year-over-year growth rate of unadjusted private non-farm job openings improved significantly from last months poor numbers. The growth trends upward in the 3 month averages, downward in the 2015 averages, and upward in the year-over-year averages.

The Wall Street Journal: Merkel complained in 2010 about California emissions rules

German Chancellor Angela Merkel said in 2010 that California’s strict emissions rules were hurting German auto makers.

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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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