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04Feb2016 Market Update: Mr. Market Having Trouble Figuring Where He Should Be As WTI Crude Falls Almost Two Dollars

Written by Gary

US markets have prompted a new reality show, 'As The Markets Swings'. Today's averages opened lower, jumped into the green, slumped back into the red and now at the noon hour back into the green. WTI crude hit the mid 32's and quickly 'crashed' to the high 31's with the markets following closely. Even the traders are scratching their heads today.


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 3.04% while Mexico's IPC is up 1.57% and U.S.'s S&P 500 is up 0.13%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 46%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 26%
Investors Intelligence sets the breath Above 50 bullish 26.8%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +33.20
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 21.67%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 33.05%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 39.80%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 18.76
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 72.48
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,518

What Is Moving the Markets

Here are the headlines moving the markets.

Continental says five million vehicles worldwide may have faulty air bags

WASHINGTON/DETROIT (Reuters) - Continental Automotive Systems said Thursday it supplied potentially defective air bag control units to 5 million vehicles used by Honda, Fiat Chrysler, Mercedes-Benz, and three other manufacturers built over a five-year period worldwide, widening an air bag safety crisis.Continental Automotive, a unit of Germany-based Continental AG , told the U.S. National Highway Traffic Safety Administration that electronic systems built from 2006 through 2010 an

Rising U.S. layoffs hint at ebbing labor market momentum

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits rose more than expected last week, suggesting some loss of momentum in the labor market amid a sharp economic slowdown and stock market selloff.Â

Shkreli laughs off questions from lawmakers, calls them 'imbeciles'

WASHINGTON/NEW YORK (Reuters) - Former drug executive Martin Shkreli laughed off questions about drug prices and tweeted that lawmakers were imbeciles on Thursday, when he appeared at a U.S. congressional hearing against his will.

Viacom names CEO Dauman as chair; Shari Redstone opposed

NEW YORK (Reuters) - Viacom Inc's board of directors named CEO Philippe Dauman as executive chairman on Thursday, replacing founder Sumner Redstone, overriding calls for an independent board chief from Redstone's daughter Shari, who voted against Dauman.

Fed's 'accommodation' outrun by tightening credit

WASHINGTON (Reuters) - Even as the Federal Reserve began raising interest rates in December its message was clear: it wanted to keep monetary conditions loose and felt the United States still needed accommodation to keep a modest recovery underway.

Succession issue looms large at world's top glasses maker

MILAN (Reuters) - For a man who created the world's leading eyewear company after growing up in a Milanese orphanage and learning metalwork in a tool shop, the issue of who to hand it on to should be relatively easy.

Wall St. fluctuates as equities track oil prices

(Reuters) - U.S. stock indexes fluctuated on Thursday as equities tracked oil prices.

Credit Suisse's Thiam under pressure after first loss since 2008

ZURICH (Reuters) - Credit Suisse reported its first full-year loss since 2008 after booking a big impairment charge at its investment banking business, sending its share price tumbling and piling pressure on new Chief Executive Tidjane Thiam.

Shell ready for more cost cuts as earnings fall 87 percent on weak oil prices

LONDON (Reuters) - Royal Dutch Shell, Europe's largest oil company, reported its lowest annual income in over a decade on Thursday and said it would take further steps to cut costs to cope with weak oil prices if needed.

When Mother Market Force Takes Over Central Banking! Watch Rates Rise Even Though the Fed Doesn't


  • CNN reports the US running out of space to store oil.



    At the same time, OPEC actually ramps up oil production...


    oil pricesOPEC oil supply

    Many "smart guys" allege that the drop in oil is bad for the ecomomy. I call BS. Oil prices are an input costs. Input costs are what strip revenues down to profits and potentially losses. The lower the input cost, the higher profit. What has occured was a decades long credit bubble that fueld a profligate binging on debt.

    10 year treasury historical rates

    It is hard to get off of that drug called free money, particuarly as your dope pusher (those that push rates outside of market force bounds) continues to give you more of that smack. The problem is, eventually, it will catch up to you. The Central Banks have signaled higher rates, and have raised rates 25 bp (roughly 2% of retracement - whoo ...

Is The Fed "Seriously Considering" Negative Interest Rates?

The Fed may "seriously consider" negative rates after moving rates back to zero, reintroducing forward guidance and making "stronger pleas" to Congress for fiscal policy action as there are complications for money markets, according to BofAML strategist Mark Cabana.

This would not be a total surprise as Mises Institute's Joseph Salerno warns recent Fed commentary suggests they want to test-drive negative interest rates...

In 2016, the Fed's annual stress test on banks will include a scenario in which the interest rate on the three-month U.S. Treasury bill becomes negative in the second quarter of 2016 and then declines to -0.5%, remaining at that level until the first quarter of 2019. According to the Fed, "The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities." In other words, including this scenario in its stress test is not supposed to signal that the Fed is contemplating adopting a deliberate policy of negative interest rates. It is simply testing the resilience of big banks in the face of a severe recession that precipitates a "flight to safety" which spontaneously drives rates on short-term Treasury securities into negative territory. Or so they would have us believe.

Recent remarks by those associated with the Fed, however, seem to suggest otherwise. For example, former Fed ...

The Full Summary Of U.S. Banks' Energy And Commodity Exposure

As this website exclusively reported three weeks ago, under explicit guidance by the Dallas Fed and associated regulatory pressure, US lenders have been instructed to not only not accelerate energy company counterparty defaults but to suspend energy loan book MTM entirely in distressed cases to avoid contagion concerns.

Questionable marks notwithstanding, in their fourth quarter earnings reports and conference calls banks had no choice but to reveal what their existing "publicly appropriate" exposure to oil and gas companies looks like.

As Janney analyst Jody Lurie wites, "banks devoted more attention to provisions, which caused some margin deterioration. Below, we included a chart laying out each firm's energy and commodities related exposure."

So for all those looking for a comprehensive summary of publicly available data of the bank sector's exposure to oil and gas firms, here is Janney's comprehensive summary of US bank energy and commodity exposure, with the caveat that should depressed oil prices persist, all of these indicators will undoubtedly be revised drastically worse as model marks have no choice but to catch up to market reality, despite any pressure the Dallas or any other Fed may wish to exert on the US banking system.

The Opaque Process Of Collapse

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The ultimate cost of protecting the privileges of the few at the expense of the many is the dissolution of the social order that enabled the rule of the privileged few.

When I write about the demise of unsustainable systems, readers often ask me to describe the collapse I see as inevitable. This is a tough assignment, as there are as many kinds of collapse as there are systems: fragile ones can collapse suddenly, and resilient ones can decay for years or even decades before finally imploding or withering away.

Another way of describing collapse is: complex systems become much less complex.

Certain features of modern life could collapse without affecting everyday life much--for example, the derivatives markets could stop working and the impact would be enormous on those playing financial games and those who entrusted money to the gamblers, but the consequences would be extremely concentrated in the gambler/speculator class. Despite the usual cries that financial losses in the gambler/speculator class will destroy civilization, the disruptions and losses would be widely dispersed for the economy as a whole.

Other collapses--in food or energy distribution, digital communications, etc.--would have immediate and severe impacts on daily life.

My three primary models of decay and collapse are:

1. Historian David Hackett Fischer's masterwork The Great Wave: Price Revolutions and the Rhythm of History (given to me by longtime co ...

Dollar Slips Further Ahead of Friday Jobs Data

The dollar retreated further Thursday, as investors cut their positions in the currency ahead of key U.S. economic data at the end of the week.

U.S. Stocks Mixed Ahead of Friday Jobs Report

U.S. stocks paused Thursday, as weak data from the Labor Department put an increased focus on Friday's jobs report, some traders said.

Credit Suisse Shares Plunge on Huge Loss

Shares in Credit Suisse dropped 11% after the bank reported a hefty fourth-quarter loss as it makes a transition away from investment banking toward wealth management. It also said it would cut 4,000 jobs.

December 2015 Manufacturing Again Declines

Written by Steven Hansen

US Census says manufacturing new orders declined. Our analysis says sales did decline. Unadjusted unfilled orders' growth remains in CONTRACTION year-over-year - but this is due to deflation in this sector..

5 most profitable housing markets in America

Sellers in these five counties have made a 49% or better return on their real-estate investment.

Europe Markets: European stocks turn lower; German shares stung by leap in euro

Most European stocks turn lower, with strength in the euro weighing on German shares.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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Current Commodity Prices


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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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