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10Feb2016 Market Update: US Markets Quietly Trading Fractionally Above The Unchanged Line, Investors Not Totally Convinced That The Feds Have Control

Written by Gary

US markets are treading water after Federal Reserve Chair Janet Yellen said conditions in the United States would allow for "gradual" rate hikes, and technology stocks rebounded at that news. For the rest of the averages they are fractionally higher and trading more or less sideways.

Here is the current market situation from CNN Money

North and South American markets are mixed today. The S&P 500 is up 1.03% while the IPC gains 0.68%. The Bovespa is off 0.57%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 44%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 17%
Investors Intelligence sets the breath Above 50 bullish 24.7% 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.

-28.36 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 18.39% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 27.91% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 30.60% 10 Year Treasury Note Yield Index ($TNX) ten year note index value

17.36 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 69.30 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,248

What Is Moving the Markets

Here are the headlines moving the markets.

Daimler, VW recall 1.5 million vehicles in U.S. over airbag worries

WASHINGTON/FRANKFURT (Reuters) - German carmakers Volkswagen and Daimler are recalling 1.5 million vehicles in the United States due to potentially faulty airbags made by Japanese company Takata Corp, the focus of a long-running global safety crisis.

Yellen: Fed not likely to reverse course on rates despite risks

WASHINGTON (Reuters) - Tightening financial conditions and uncertainty over China pose risks to the U.S. recovery, but chances are slim the Federal Reserve would need to reverse the rate tightening cycle it began in December, Fed Chair Janet Yellen told U.S. lawmakers on Wednesday.

Disappointing show by HBO, Turner drags down Time Warner

(Reuters) - Time Warner Inc reported a steeper-than-expected drop in quarterly revenue as subscription revenue for its cable channel HBO and Turner television network disappointed Wall Street, sending the company's shares down as much as 8 percent.

Carlyle unveils $200 million share buyback, earnings miss forecast

NEW YORK (Reuters) - Private equity firm Carlyle Group LP unveiled a $200 million share buyback plan on Wednesday as it posted weaker-than-expected fourth-quarter earnings amid turbulent financial markets.

Wall St. up as Yellen revives rate hike hopes

(Reuters) - U.S. stocks gained on Wednesday after Federal Reserve Chair Janet Yellen said conditions in the United States would allow for "gradual" rate hikes, and as technology stocks rebounded.

Viacom investor SpringOwl urges independent directors to quit

(Reuters) - Viacom Inc investor SpringOwl Asset Management urged the media company's six independent directors to step down immediately, days after the board appointed Chief Executive Philippe Dauman to the additional post of executive chairman.

U.S. judge rejects motion to review GM ignition switch deal

(Reuters) - A U.S. judge on Wednesday rejected a request to reconsider his approval of a settlement fund to resolve more than a thousand lawsuits over deaths and injuries blamed on an ignition switch defect that prompted General Motors Co to recall 2.6 million vehicles.

In an uncertain world, Bank of England 'agents' keep Carney informed

REIGATE, England (Reuters) - Unsure how a misfiring global economy is affecting matters at home, Bank of England chief Mark Carney has turned to an age-old gauge of Britain's economy: the word on the street from a trusted band of regional agents.

Nomura CEO aims to finally crack U.S. with shift to M&A advisory

TOKYO (Reuters) - Nomura Holdings Inc plans a shift in focus in the United States toward client-oriented services from market-based trading, the chief executive said, in its latest attempt to establish a profitable business in a major overseas economy.

The Fed's Zombie Economy: ROI Crashes 80% In 40 Years

Submitted by Daniel Drew via,

Breaking the zero bound has become a rite of passage in the post-2008 world. As Mark Jeftovic noted, "Once a financial market hits the zero bound in interest rates, it's like crossing the event horizon of a black hole - there is no going back." Indeed, the number of government bonds trading at negative yields increases every day.

Negative Bond Yields

In the new bizarro world where you pay banks for the privilege of giving them your money, one has to wonder what will be the next thing to break the zero bound. When one of the largest corporations in America has over $100 billion in revenue but can't even make $1 billion in profits, it's easy to imagine a few possibilities.

American corporations have been playing a musical chairs game where the loser gets taken out back and shot. During the last 40 years, the life expectancy of firms in the Fortune 500 has declined from 75 years to less than 15 years. In what Forbes called "the most important business study ever," Deloitte released The ...

"It's Worse Than 2008": CEO Of World's Largest Shipping Company Delivers Dire Assessment Of Global Economy

Earlier today, we highlighted the rather abysmal results reported by Maersk, the world's largest shipping company.

To the extent the conglomerate is a bellwether for global growth and trade, things are looking pretty grim. Maersk Line - the company's golden goose and the world's largest container operator - racked up $182 million in red ink last quarter and the outlook for 2016 isn't pretty either. The company now sees demand for seaborne container transportation rising a meager 1-3% for the year.

œThe demand for transportation of goods was significantly lower than expected, especially in the emerging markets as well as the Group's key Europe trades, where the impact was further accelerated by de-stocking of the high inventory levels, the company said, in its annual report.

Just how bad have things gotten amid the global deflationary supply glut you ask?

Worse than 2008 according to CEO Nils Andersen who last November warned that œthe world's economy is growing at a slower pace than the International Monetary Fund and other large forecasters are predicting. Here's what Andersen told FT:

œIt is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn't look like going up soon. Freight rates are lower. The external conditions are much worse but we are better prepared.

As FT goes on to note, œcapacity in the container shipping industry increased 8 per cen ...

How Systems Break: First They Slow Down

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Alternatively, we can cling to a state of denial, and the dominant system will be replaced by archetypal systems that are not necessarily positive.

Understanding our current socio-economy as a system of sub-systems enables us to project how and when unsustainable sub-systems will finally unravel.

The reality that cannot be spoken within the conventional media is that all the primary financial systems we believe are permanent and indestructible are actually on borrowed time.

One way to assess this decline of resilience is to look at how long it takes systems to recover when they are stressed, and to what degree they bounce back to previous levels.

A compelling article on this topic was recently published by The Atlantic: Nature's Warning Signal: Complex systems like ecological food webs, the brain, and the climate all give off a characteristic signal when disaster is around the corner.

"The signal, a phenomenon called "critical slowing down," is a lengthening of the time that a system takes to recover from small disturbances, such as a disease that reduces the minnow population, in the vicinity of a critical transition. It occurs because a system's internal stabilizing forces—whatever they might be—become weaker near the point at which they suddenly propel the system toward a different state."

Recent email exchanges with correspondent Bart D. (Australia) clued me into the Darwinian structure of this critical slowing down and loss of snapback (what we might characterize as a loss of resi ...

USDJPY Plunges To 113 Handle - Gives Up QQE2 Gains

Central Banks are losing control everywhere...

Or put another way...

almost there

" zerohedge (@zerohedge) February 10, 2016

Stocks Bounce Back After Market Selloff; Asia Stumbles

U.S. stocks rebounded Wednesday after three sessions of declines, led by gains in some of this year's worst performers.

Oil Retreats Despite Surprise Drop in Inventories

Oil prices pulled back Wednesday even as weekly data from the U.S. Energy Department showed a surprise decrease in crude-oil stockpiles.

Deutsche Bank Shares Soar

Shares in Deutsche Bank rose 14% following news that the German lender is considering buying back some of its debt.

Foreign Economic Developments, In Particular, Pose Risks To U.S. Economic Growth

from the Federal Reserve

The following is testimony by Chair Yellen on the semiannual Monetary Policy Report to the Congress to the Committee on Financial Services, U.S. House of Representatives, Washington, D.C. One interesting statement:

Financial conditions in the United States have recently become less supportive of growth, with declines in broad measures of equity prices, higher borrowing rates for riskier borrowers, and a further appreciation of the dollar.

The Fed: Yellen says Fed isn't sure whether it's legal to adopt negative rates

Fed Chairwoman Janet Yellen said there are legal issues that have to be cleared up before the Fed could adopt negative interest rates.

The Tell: Move over, China " India will drive future oil-demand growth

Worried about China's future oil demand? Fear not, India will pick up the slack and overtake China as the main engine for global energy demand growth by 2040, according to the International Energy Agency.

Capitol Report: Peso trouble for Mexico spells more trouble for Texas

The latest trouble in the oil patch has already gashed the Texas economy. Now a big drop in the buying power of the Mexican peso could deepen the wound.

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