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09Feb2016 Market Update: US Averages Recover Some Morning Losses, DOW Down 80 Points, WTI Crude Continues To Melt Down, More Afternoon Losses Possible

Written by Gary

US averages are trading sideways after recovering from the morning opening lows. Currently, the averages are trading in a choppy environment swapping fractional losses and gains as financial and energy sectors offset gains in material and tech stocks. Crude prices continue to slip into the high 26's and the US dollar is in the high 95's.


Here is the current market situation from CNN Money

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 43%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 18%
Investors Intelligence sets the breath Above 50 bullish

25.2%

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.

-13.80

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.

18.65%

StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 28.01%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 30.00%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value

17.26

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 68.31
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,157

What Is Moving the Markets

Here are the headlines moving the markets.

Goldman CEO eyes more cost cuts amid global growth concerns

(Reuters) - Goldman Sachs Group Inc's chief executive officer signaled the U.S. bank could cut costs yet again as market turmoil, declining oil prices and concerns about Germany's Deutsche Bank AG have cratered the sector's shares this year.

Viacom CEO rails against 'naysayers' as sales miss estimates, shares tumble

(Reuters) - Viacom Inc CEO Philippe Dauman railed at critics of his leadership after a fifth straight quarter missing Wall Street's sales estimates on Tuesday, unnerving investors and sending the media company's shares down more than 15 percent to a four-year low.

Cost cuts, cheaper commodities help Coca-Cola top profit estimates

(Reuters) - Coca-Cola Co reported a better-than-expected profit in the last three months of 2015, helped by aggressive cost-cutting and lower commodity costs.

Wall St. flat as tech rebound offsets energy, financials

(Reuters) - Wall Street bounced between gains and losses in choppy trading on Tuesday, as a decline in energy and financial sectors offset gains in materials and technology stocks.

UBS freezes salaries in investment bank: sources

NEW YORK/LONDON (Reuters) - Swiss bank UBS is imposing a pay freeze across its investment banking arm as banks across Europe take an increasingly hard line on costs to improve profitability, two sources familiar with the matter told Reuters.

U.S. wholesale inventories, sales fall in December

WASHINGTON - U.S. wholesale inventories slipped in December for a third straight month as businesses continued to reduce unsold merchandise, suggesting the advance fourth-quarter economic growth estimate could be revised slightly lower.

Facebook's India stumble could embolden other regulators

SINGAPORE/MUMBAI (Reuters) - India's decision to effectively ban Facebook's pared-back free Internet service is a major blow to the social network's plans, and may prompt other regulators to demand equal online access for their users.

Global stocks hit the rocks after Asian markets slump

LONDON (Reuters) - A drop in bank shares kept European shares under pressure on Tuesday, after losses in Asian markets sent investors scurrying for safe havens.

WTI Crude Crumbles To $28 Handle, 3-Week Lows

WTI crude has collapsed 5.5% from overnight highs and broken back below $29 for the first time since Jan 21st (when "the bottom" was put in)...


Former Fed President Demands Negative Rates To Combat "Terrible" Fiscal Policy

Narayana Kocherlakota is a funny guy.

Before abdicating his post at the Minneapolis Fed to former Goldmanite/TARP architect Neel Kashkari, Kocherlakota was the voice of Keynesian œreason for the FOMC.

Although his pronouncements never measured up to the power of the Bullard, Kocherlakota did call on a number of occasions for MOAR dovishness, noting that if the US economy were to decelerate (which it has), more asset purchases may be warranted.

He's also suggested on a number of occasions that if the government wants to help the Fed out, it will issue more monetizable debt, thus giving Janet Yellen more paper to buy in a world where central bankers are increasingly bumping up against the limits of Keynesian insanity.

In October, following the Fed's "clean relent", Kocherlakota suggested that the time has come for NIRP in the US. As a reminder, here are the bullets:


  • KOCHERLAKOTA SAYS FED SHOULD CONSIDER NEGATIVE RATES

    KOCHERLAKOTA: TAPERING ASSET PURCHASES LED TO SLOWER JOB GAINS

    KOCHERLAKOTA SAYS JOBS SLOWDOWN 'NOT SURPRISING' GIVEN POLICY



Bob, I got a bad feeling on this one.

"Bob, I got a bad feeling on this one.
All right?
I mean I got a bad feeling!
I don't think I'm gonna make it outta here!
D'ya understand
what I'm sayin' to you?"

The global markets are clearly in turmoil...again. I thought I would start a quasi-open thread here on ZH, where we can ask questions and share concerns or strategies with one another.

So, like my asteroid article from last year, let's have a little more fun, and use this as a test of our financial-armageddon preparedness.

First, a definition or two...

The normalcy bias, or normality bias, is a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster and its possible effects. This may result in situations where people fail to adequately prepare and, on a larger scale, the failure of governments to include the populace in its disaster preparations.

The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred, it never will occur. It can result in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.

The opposite of normalcy bias would be overreaction, or "worst-case thinking" bias,in which small deviations from norma ...

It's Not Just China And Oil Anymore: Here Are The Two New Concerns Weighing On Risk

While the following summary of key recent headlines suggests a broad array of issues leading to the worst start of the year since 2008...

... in broad terms, the biggest worries challenging that bull case in January were twofold: China and commodities, mostly oil. However, over the past week, two new big concerns appear to have emerged. Here, ironically, is Deutsche Bank explaining what these are (for those confused, "tightening in financial conditions in European financial credit" is a euphemism for plunging DB stock among others):

The year continues to be bruising for risk assets and recent attempts at stabilisation have been unsuccessful. After a mild rebound, equities and US credit spreads are again close to their year's worst levels.

In addition to the initial concerns about China and energy, two new issues further weigh on risk sentiment: the slowdown in US growth momentum and the tightening of financial conditions especially in European financial credit.

Macro data in the US have been weaker than expected and have raised questions about the sustainability of the recovery. Consumer spending and the services sector, which had been the drivers of growth, have decelerated. Fundamentals there still look sound, but weakness may persist and we have revised our below consensus growth forecasts further down. The Fed turned more dovish in response to the slower momentum and market volatility, and we no longer expect a rate rise in March. Indeed, at this stage it is difficult to see the Fed hiking mor ...

Japan Markets Shaken as Investors Seek Shelter

Japanese stocks tumbled and the benchmark government bond yield fell into negative territory for the first time, as a global flight to safety threatened to unravel the delicate market balance that Prime Minister Shinzo Abe and the Bank of Japan have tried to build.

Lloyd Blankfein: Big Banks in Sound Health, Despite Turmoil

Goldman Sachs' Lloyd Blankfein defended the financial health of the biggest banks, arguing that investors haven't accounted for the steps taken to fortify balance sheets in the years since the financial crisis.

December 2015 JOLTS Job Openings Year-over-Year Growth Rate Again Marginally Improved

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 marginally improved from last month. The growth rate trends marginally improved in the 3 month averages, but the 2015 year-to-date averages continue to decline.

Deep Dive: 20 dividend stocks that Wall Street loves the most

All have dividend yields above 3.5%, and most are expected to post big increases, says Phil van Doorn.

Deep Dive: 23 'loser' stocks that are being thrown out with the bathwater

Companies whose shares are some of this year's worst performers actually have robust businesses, says Phil van Doorn.

Project Syndicate: Will oil be so cheap that it won't pay to pump it out of the ground?

The cost of developing oil could outweigh the price received for it, which would œfinancially strand petroleum reserves, writes Paul Spedding.

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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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