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20Nov2015 Market Update: Morning Market Highs Now Trending Down On Anemic Volume, Crude Up, US Dollar Up

Written by Gary

US markets in the green, DOW up over 100 points on falling volume. Crude and the US dollar trending up on what appears to be a slow, but moderate volatile session. Short-term indicators are mildly bullish, but not enough to jump in for a buying spree.

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.48% while Mexico's IPC is up 0.62% and U.S.'s S&P 500 is up 0.48%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 61%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 54%
Investors Intelligence sets the breath Above 50 bullish 46.7% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -8.04 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 34.45% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 52.68% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 66.80% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.47 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 81.03 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,455

What Is Moving the Markets

Here are the headlines moving the markets.

Fed will want more uncertainty on rates after hike: Bullard

FORT SMITH, Ark. (Reuters) - The U.S. Federal Reserve will want more uncertainty surrounding possible interest rate moves on a meeting-by-meeting basis after an initial rate hike, St. Louis Fed President James Bullard said on Friday.

Tesla recalling 90,000 Model S sedans to check seat belts

(Reuters) - Tesla Motors Inc said Friday it is recalling all 90,000 Model S sedans produced to check for a possible defect in the front seat belt assemblies.

Dudley says Fed should 'soon' be ready to raise rates

HEMPSTEAD, N.Y. (Reuters) - The Federal Reserve should "soon" be ready to raise interest rates as U.S. central bankers grow confident that low inflation will rebound and that employment remains stable, William Dudley, the influential head of the New York Fed, said on Friday.

Sprint to raise $1.1 billion from financing deal led by SoftBank

(Reuters) - Sprint Corp said it would raise about $1.1 billion in cash through a sale and lease-back deal with a company whose backers include Japan's SoftBank Group Corp , the U.S. telecom company's majority owner.

Snapchat's lackluster ad business threatens $16 billion valuation

SAN FRANCISCO (Reuters) - Snapchat, maker of a free mobile app that lets users send videos and messages that disappear in seconds, is struggling to gain traction with advertisers, fuelling investor concern that its $16 billion valuation isn't justified by a business that hasn't yet shown it has a steady source of income.

Brent rises, U.S. crude struggles to hold $40 before contract expiry

NEW YORK (Reuters) - Brent oil futures rose about 1 percent on Friday while U.S. crude fell almost 1 percent, struggling to stay above $40 a barrel, as worries about large stockpiles pressured its spot contract ahead of expiry.

Fiat Chrysler U.S. unit redeems notes, replaces credit line

MILAN (Reuters) - The U.S. unit of Fiat Chrysler Automobiles will redeem secured senior notes maturing in 2021 for $3.08 billion and terminate an undrawn $1.3 billion revolving credit facility as the carmaker seeks to gain full access to the subsidiary's cash.

Aetna, Anthem say individual Obamacare business performing as expected

(Reuters) - U.S. health insurers Aetna Inc and Anthem Inc on Friday sought to reassure investors that their Obamacare businesses had not worsened after UnitedHealth Group Inc warned of mounting losses in that sector.

Abercrombie & Fitch sales decline slows as turnaround takes hold

(Reuters) - Abercrombie & Fitch Co's quarterly same-store sales fell less than expected and its profit more than doubled as the teen apparel retailer boosted gross margin by offering fewer promotions and controlling costs.

Tesla Tumbles After Recalling 90,000 "Best Car Ever" Model S Sedans


As Bloomberg reports,

Tesla Motors Inc. said it’s conducting a voluntary recall of 90,000 Model S cars because of a single report of a front seat belt not being properly connected.

“Tesla recently found a Model S in Europe with a front seat belt that was not properly connected to the outboard lap pretensioner,†the company said in an e-mail to customers Friday. “This vehicle was not involved in a crash and there were no injuries. However, in the event of a crash, a seat belt in this condition would not provide full protection. First and foremost, we care about your safety.â€

Tesla was alerted to the seat belt issue by a female customer in Europe two weeks ago and moved to inspect 3,000 vehicles and its assembly process. The Palo Alto, California-based company said it has found no other issues, but wants owners to bring their cars in to make sure the seat belts are properly connected. They are being advised to book an appointment for the inspections.

“In early November, a customer sitting in the front passenger seat turned to speak with occupants in the rear and the seat belt became disconnected,†a Tesla representative said. “The seat belt is anchored to the outboard lap pretensioner through two anchor plates that are bolted together. The bolt that was supposed to tie the two anchors together wasn’t properly assembled.â€

* * *

And the result...

Mine Production Stagnates As Silver Coin Demand Hits Record High

Mine Production Stagnates As Silver Coin Demand Hits Record High

Thomson Reuters has released their interim Silver Market Review including provisional supply and demand forecasts for 2015.

Highlights from that report include:

- Total silver supply is forecast to fall to 1,014.4 Moz* in 2015, down 3%

- Silver bullion coin sales at record high, up 95% year-on-year

- Coin demand should account for 12% of physical demand this year

- Silver market is expected to be in an annual physical deficit of 42.7 Moz* in 2015

- Silver prices this year are 18.3% lower than in the same period in 2014

*Millions of Oz

A one thousand oz silver bar

According to a recent review by silver analyst Steve St. Angelo, "The world has experienced consecutive silver deficits for the past 12 years". Recently published data shows "three of the top five silver producing countries are showing large declines in production compared to the same period last year". He also highlights the most important statement in the Interim Silver Market Review: "While such deficits do not necessarily influence prices in the near term, multiple years of annual deficits can begin to apply upward pressure to prices in subsequent periods".

Other observations from the review include a predicted increased demand from industrial silver consumers - the photovoltaics indust ...

Albert Edwards Explains What The Next Stage In Global Currency War Look Like

Albert Edwards is not a fan of QE, but even he makes one exception. As he notes in his latest note "Going all in", Japan has no option "as it is
fiscally bust."

Edwards notes that QE works by driving up financial asset prices; but that, "in practice, seems to have had a limited effect in boosting the real economy ?aside from increasing inequality. Furthermore, the one (price) thing that QE does change and that does make an economic difference is that it enables a lower exchange rate ? but only to beggar thy neighbour."

Said another way, the reason why development nations find themselves mired in deflation is that despite all their "unconventional policies", they are unable to offset all the deflation exported to them by all the other central banks who are doing the same. As a result, at the end of the day, he who debases first, debases best.

This is evident in Japanese corporate profits, which since 2013 have boomed like never before and, as Edwards says, "Abe hopes and prays this will spill over and spark a positive wage/price spiral. Yet, in the absence of further Japanese QE, the yen has been paddling sideways against the dollar in a ¥125-118 range since last November ? and the yoy decline will soon drop away to zero. In fact, that is already the case on the BoE trade-weighted yen measure ? see chart below."

What caused this?

In my view, the year-on-year fall in the yen has been the main driver for yoy growth in profits, as well as the yoy rise in underlying consumer prices and wages, a ...

"Desperate" Novice Trader May Be Suicidal If He Didn't Cover: KBIO Short Squeeze Goes "Full Volkswagen"

Our post yesterday about the "devastated" novice E-trader Joe Campbell, who went to bed on Wednesday night with a $18K short position in the biotech pennystock KaleBios, only to wake up with a $106K margin call when overnight insolvent KaleBios announced it would get a last minute rescue by the infamous Martin Shkreli, promptly went viral.

And, as was to be expected, many were curious just how Joe - who swore he would never again short low float stocks again - had done in his GoFundMe campaign. The answer - not bad: in the span of 24 hours, with the aid of massive media coverage, he had managed to raise over $5,3100, or more than he had hoped.

At least one part of Joe's plan worked out. However, the real question is whether he was also successful with the other, far more difficult part of this plight, namely paying off the E-trade margin call. Because, while yesterday the stock of KBIO drifted lower all day to close just above $10, overnight KBIO went 2 for 2, wh ...

U.S. Stocks Climb, Capping Strong Week

U.S. stocks rose Friday as major indexes looked set to close out a week of gains. Markets have broadly rallied this week after recovering from a brief initial shock sparked by the Paris terror attacks.

Oil Prices Fall in Volatile Trade

Oil prices slipped in volatile trading, as ample global supplies of crude continued to pressure the oil market. investors were awaiting the latest oil rig count from the U.S. later Friday.

Argentina Tempts Big Money Managers Again

After years of neglecting Argentina, some of Europe’s biggest money managers are returning to the country ahead of a presidential election that some hope will usher in a more stable era for investors.

13 November 2015: ECRI's WLI Growth Index Again Improved But Remains In Contraction

ECRI's WLI Growth Index which forecasts economic growth six months forward - improved but remains in negative territory. This index had spent 28 weeks in negative territory, then 15 weeks in positive territory - and now is in its 14th week in negative territory. ECR also released their lagging and coincident indices this week and discussed below.

Currencies: Euro weakens after dovish Draghi comments

The euro falls against major currencies Friday after European Central Bank President Mario Draghi suggested further stimulus measures may be deployed to fight low inflation in the eurozone economy.

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