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29Feb2016 Market Update: SP 500 Moves Up To R1 Then Falls Toward The Unchanged Line As Crude Climbs To The High 33's

Written by Gary

After a shaky start the US markets edged up this morning on China's move to boost its slowing economy and higher oil prices, putting the S&P 500 on track to post its first monthly gains this year. The Spooz reaches R1 (1959) and falls off on low volume to melt just below the Pivot line.

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 3.16% while U.S.'s S&P 500 is up 0.16% and Mexico's IPC is up 0.16%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 62%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear


Investors Intelligence sets the breath Above 50 bullish

40.5% 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.

76.32 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 27.94% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 45.55% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 58.40% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 17.49 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 75.09 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,649

What Is Moving the Markets

Here are the headlines moving the markets.

GE to 'aggressively' cut costs in 2016: Immelt

(Reuters) - General Electric Co will continue to "aggressively" cut costs this year, Chief Executive Jeff Immelt said, reiterating the company's target for spending on restructuring in 2016.

U.S. pending home sales hit one-year low; manufacturing data weak

WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes fell to their lowest level in a year in January amid a persistent shortage of properties for sale, which could slow the housing market ahead of the spring selling season.

Unlocking iPhone would leave millions exposed, Apple to tell Congress

WASHINGTON (Reuters) - Unlocking an iPhone used by one of the San Bernardino shooters would leave hundreds of millions of Apple Inc device owners vulnerable to cybercriminals and other hackers, the company's top lawyer is expected to tell U.S. lawmakers on Tuesday.

Buffett says owning IBM shares could prove a mistake: CNBC

NEW YORK (Reuters) - Warren Buffett, chairman and chief executive of Berkshire Hathaway Inc , told CNBC on Monday the firm's ownership of IBM Â shares could prove a mistake and that he was buying more U.S. stocks overall since the end of last year.

Lumber Liquidators' sales fall more than feared, shares drop

(Reuters) - Lumber Liquidators Holdings Inc reported a bigger-than-expected drop in sales for the third straight quarter as it struggled with falling demand due to fears that some of its hardwood flooring laminates could cause cancer.

IBM to purchase cyber security firm Resilient Systems

(Reuters) - IBM Security plans to acquire private cyber security firm Resilient Systems, the computing giant said Monday, as part of a move to expand its role in the incident response market.

News Corp faces U.S. trial over monopoly of in-store ads

NEW YORK (Reuters) - News Corp went to trial on Monday in a class action lawsuit that accuses the company of monopolizing the market for in-store promotions at some 52,500 retail stores across the United States.

Previewing The Winners And Losers From Today's MSCI Rebalance

As MSCI reported on February 11, today is the day when the previously announced quarterly rebalancing will take place, one which Credit Suisse estimates will see approximately $7.8bn gross trading in DM and $1.2bn in Emerging Markets.

As a reminder, this is how MSCI previewed today's torrid end of today activity:

MSCI Global Standard Indexes: Thirteen securities will be added to and ten securities will be deleted from the MSCI ACWI Index. In the MSCI World Index, the three largest additions measured by full company market capitalization will be Jardine Matheson (Hong Kong), Worldpay Group (United Kingdom), and Waste Connections (USA). The two additions to the MSCI Emerging Markets Index will be Axis Bank (India) and Sibanye Gold (South Africa).

MSCI Global Small Cap Indexes: There will be eight additions to and 35 deletions from the MSCI ACWI Small Cap Index.

MSCI Global Investable Market Indexes: There will be three additions to and 27 deletions from the MSCI ACWI IMI.

MSCI Global All Cap Indexes: There will be two additions to and five deletions from the MSCI World All Cap Index.

MSCI Global Value and Growth Indexes: The three largest additions to the MSCI ACWI Value Index measured by full company market capitalization will be Jardine Matheson (Hong Kong), Axis Bank (India) and Mid-America Apartment (USA), while the three largest additions to the MSCI ACWI Growth Index measured by full company market capitalization will be Worldpay Group (United Kingdom), Waste Connections (USA) and Genmab (Denmark).

MSCI Frontier Markets Indexes: There will be one addition to and no deletions from the MSCI Frontier Markets Index.

Why This Was The Worst February For Hedge Funds Since 2007

It's been a rough stretch for the 2 and 20 crowd.

Everyone from Bill Ackman to David Einhorn to (gasp) the zen master himself, Ray Dalio has been seemingly unable to cope with markets that are increasingly volatile, correlated, and impossible to explain.

Indeed many of the industry's "rock stars" have massively underperformed of late. As it turns out, "hedge" funds aren't so good at "hedging" after all. Rather, they're simply adept at riding the CB put with massive leverage. But when everything fell apart in August, in a harrowing bout of flash crashing madness on Black Monday, no one was safe, not even risk parity. Subsequent idiosyncratic shocks (e.g. Valeant for Ackman) only added to the malaise and before you knew it, the rout was on.

The apparent lesson: just buy the SPY for 11 bps.

In any event, the trend continued in February, a month in which hedge funds saw their biggest underperformance relative to the market since 2007.

What happened to make February so bad you ask? Well, according to Credit Suisse, "short-covering in Materials, Industrials and Energy, hurt both their longs AND shorts."

Worse, they apparently missed the bounce. "Long/Short funds have not re-risked despite this rally, with gross exposure pinned at 2011 lows."

In other words: . . . .

Was Middle-Class Retirement Just A Credit Bubble Fantasy?

Submitted by John Rubino via,

One of the jarring — and until recently underreported — aspects of those seemingly-positive recent US jobs reports is the increasing skew towards older workers. Most new jobs have gone to people who in better times would be leaving to live off their savings. Now they're coming back, frequently taking jobs they wouldn't consider if money wasn't so tight.

And it's apparently a lot worse for older women:

How Older Women Are Reshaping U.S. Job Market

(Wall Street Journal) - More female workers delay retirement, a shift that's helping to transform America's economy.

Connie Blanchette, age 72, is a relative newcomer at the county social-services agency where she works part time, so her retirement plans differ from most longtime government workers. "I will work as long as I can," she said.

Ms. Blanchette, who lost her job, home and savings after the financial crisis, is among a wave of older American women who are working or seeking work longer than any previous generation as they look ahead to more years of life than men their age and with less accumulated wealth.

Since the start of the most recent recession in December 2007, the share of older working women has grown while the percentage of every other category of U.S. worker—by gender and age—has declined o ...

U.S. Stocks on Pace for Gains in February

U.S. stocks rose Monday, keeping them on pace to finish February higher after steep declines in January.

China Frees Banks to Boost Lending, in Shift on Yuan

China's central bank is increasingly finding itself in a bind, balancing its need to continue easing credit to support economic growth against its stated goal of keeping the Chinese currency stable.

Argentina, Holdout Creditors Agree to $4.65 Billion Settlement

Argentina and its œholdout hedge-fund creditors reached an agreement that could free the nation to return to the global financial markets for the first time in 15 years.

December 2015 Median Household Income Closing In On January 2000 Levels.

from Sentier Research

According to new data derived from the monthly Current Population Survey (CPS), median annual household income in December 2015 was $57,153, up $424 (or 0.7 percent) from the November 2015 median of $56,729. As noted in our previous report, we have recaptured all of the ground in the median lost since the beginning of the last recession in December 2007 ($56,698). The Sentier Household Income Index for November 2015 was 99.6 (January 2000 = 100). Thus, we are getting very close to the real level of median annual household income that existed in January 2000 ($57,371).

Allergan generic application is latest lob at Valeant in drug pricing wars

Allergan made a play for a nearly $1 billion a year Valeant drug this month.

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