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10Dec2015 Market Update: Stocks Climb Solidly Into The Green, US Dollar Melting Up, WTI Oil Consolidating For A Move Lower

Written by Gary

U.S. stocks climbed into the green at the opening bell, pushing the market higher as investors shrugged off a persistent slide in oil markets that sent the price of crude to multiyear lows. The U.S. dollar is slowly melting up as gold remains relatively stable. Morning volume was high and is now tapering off, but be aware of high volatility and sudden reversals.


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.36%, while the Bovespa is leading the IPC lower. They are down 1.23% and 0.06% respectively.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 52%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 35%
Investors Intelligence sets the breath Above 50 bullish 42.8%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -57.78
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 29.47%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 48.67%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 59.60%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.29
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 79.85
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,174

What Is Moving the Markets

Here are the headlines moving the markets.

VW says only small group to blame for emissions scandal

WOLFSBURG, Germany (Reuters) - Volkswagen said on Thursday only a small group of employees was responsible for cheating U.S. diesel emissions tests and there was no indication board members were involved in the biggest business crisis in the carmaker's history.

Twitter targets ads at logged-out users

(Reuters) - Twitter Inc said it was testing a feature to show advertising to people who checked Twitter without logging in, to cash in on an additional half a billion people each month.

Special Report: Buybacks enrich the bosses even when business sags

NEW YORK(Reuters) - When health insurer Humana Inc reported worse-than-expected quarterly earnings in late 2014 " including a 21 percent drop in net income " it softened the blow by immediately telling investors it would make a $500 million share repurchase.

U.S. jobless claims at five-month high; import prices fall

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits rose to a five-month high last week, but this likely does not signal a deterioration in the labor market as the underlying trend remained consistent with tightening conditions.

Business software maker Atlassian's shares soar in market debut

(Reuters) - Shares of Australian business software maker Atlassian Corp Plc soared as much as 33.3 percent in their market debut on Thursday, valuing the company at about $5.85 billion in one of the most highly valued initial public offerings of the year.

U.S. fines Fiat Chrysler $70 million over safety reporting lapses

WASHINGTON (Reuters) - The U.S. Department of Transportation said on Thursday it fined Fiat Chrysler Automobiles NV $70 million for failing to report vehicle crash deaths and injuries since 2003.

AIG CFO to exit in top-level management shake-up

(Reuters) - Four top-level executives at American International Group Plc , including its finance head, will leave the insurer as part of a management shake-up aimed at simplifying operations and cutting costs.

Wall Street up as investors seek bargains

(Reuters) - Wall Street was higher on Thursday, after three straight days of losses, as investors scoured for bargains ahead of a widely expected U.S. interest rate hike next week.

Chipotle CEO apologizes over illnesses, vows to be 'safest place to eat'

WASHINGTON (Reuters) - Chipotle founder and co-Chief Executive Officer Steve Ells on Thursday apologized to patrons who fell ill after eating at the company's restaurants, and pledged that sweeping new food safety practices will prevent such outbreaks in the future.

The Next Leg Of The Junk Bond Crisis: Third Avenue's Liquidating "Focused Credit Fund" Gates Redemptions

Moments ago, we learned courtesy of the head of Mutual Fund Research at Morningstar, Russ Kinnel, that the next leg of the junk bond crisis has officially arrived, after Third Avenue announced it has blocked investor redemptions from its high yield-heavy Focused Credit Fund, which according to the company has entered a "Plan of Liquidation" effective December 9.

Third Avenue says outflows would have forced them to accept "prices that would unfairly
disadvantage the remaining shareholders."

" Russ Kinnel (@RussKinnel) December 10, 2015

And from Bloomberg:

The redemption block takes place after the fund lost some 27% in 2015, with assets plunging by a whopping 66%. The gates are kicking in to facilitate an "orderly liquidation" as otherwise outflows would have forced the fund to "accept prices that would unfairly disadvantage the remaining shareholders."

As a result, all shareholders will be equally disadvantaged.

Here is the official statement:

Effective December 9, 2015, the following information supplements the Funds' Statement of Additional Information dated March 1, 2015: At the recommendation of Third Avenue Management LLC, the investment adviser to the Third Avenue Focused Credit Fund (the œFund ), the Fund's Board of Trustees approved a Plan of Liquidation for the Fund effective December 9, 2015. The Prospectus is revised to delete in their entirety all references to the Fund.

A histo ...

Is The Fed Being Forced To Hike Rates To Defend The Dollar?

Submitted by Christian Gustafson via Deflation Land blog,

At the moment, the strength of the $USD correlates very strongly to equities. When King Dollar is torpedoed like it was yesterday, stocks plummet.

So does this mean that a rate hike next week will be tremendously bullish for stocks? The argument runs like so:

  1. Fed tightening will shoot the $USD through the roof

    Beaten-down currencies like the JPY will crumble again with respect to the Dollar

    The Yen carry trade and everyone riding on it will launch equities to new highs


When the market falls off its highs in January, the Fed can then rally equities by ... adding another 25 bps. And so on, until the correlation shifts again between USDJPY and equities. This of course begs the question -- is the Dollar actually on the brink of collapsing today, with the Fed now forced to defend it with a series of rate hikes? The conventional wisdom of "one and done" or "no hikes at all, ever", may be completely wrong. 2016 may be about the Fed scrambling to regain control of the monster they have created, where the market bounces at each FOMC (against the overall decline) because they continue to tighten. Between hikes the market sells off again with increased severity as the market ...

U.S. Stocks Rebound as Oil Pares Losses

U.S. stocks rebounded Thursday as oil prices pared losses and energy-company shares gained.

OPEC's Oil Output Hits Three-Year High

The Organization of the Petroleum Exporting Countries pumped more oil in November than any month in three years, in another sign that the group has no plans to slow down its furious output levels.

Glencore Shares Surge on Trading-Arm Outlook

Glencore's stock surged in London trading after the battered Swiss commodities giant announced better-than-expected predictions for its trading division.

GoPro drone and Apple Watch news launches stock rebound

GoPro Inc. announced the name of its new drone set to launch in the first half of 2016 " Karma.

America's middle class has lost nearly 30% of wealth

There are now more middle-income families " with less of the country's wealth.

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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