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07Mar2016 Market Update: Market Bulls Happy And Not Worried About Continuing Global Financial Issues, Remaining Crude Glut And A Technically Overbought Market

Written by Gary

US equities rose reluctantly from a fractionally down opening to a respectable green level except $NDX which remains in the red. WTI crude climbed into the high 37's as producers sought a new anchor price for oil after a selloff that has lasted nearly two years, although some analysts warned the global glut is still a large issue. Gold fell to the low 1260's and the US dollar sunk to the high 96's.

Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Brazil leading the region. The Bovespa is up 0.66% while Mexico's IPC is up 0.38% and U.S.'s S&P 500 is up 0.28%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 72%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 73%
Investors Intelligence sets the breath Above 50 bullish 52.4% 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.

104.19 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 38.94% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 57.11% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71.40% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 19.16 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 76.55 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors


What Is Moving the Markets

Here are the headlines moving the markets.

U.S. slaps export curbs on China's ZTE over alleged Iran scheme

WASHINGTON (Reuters) - The United States is imposing export restrictions on China's ZTE Corp and three other entities over allegations that the telecoms equipment maker developed a scheme to re-export items to Iran in violation of sanctions, the U.S. Commerce Department announced on Monday.

Fiat Chrysler shutdown of midsize car plant extended to nine weeks

DETROIT (Reuters) - Fiat Chrysler Automobiles said on Monday it will extend the shutdown of its midsize Chrysler 200 sedan plant by three weeks, keeping it idled for a total of nine weeks.

VW delayed announcing cheating in hope of striking deal, its lawyers say

BERLIN/HAMBURG (Reuters) - Volkswagen's delay in announcing it had cheated U.S. diesel emission tests was a legitimate move aimed at striking a deal with regulators to limit the cost of the scandal, the carmaker's lawyers said in a report to a German court.

Wells Fargo, Rhode Island agency charged with fraud for 38 Studios bonds: SEC

(Reuters) - The U.S. Securities and Exchange Commission on Monday charged a Wells Fargo & Co unit and Rhode Island Economic Development Corp with civil fraud stemming from a bond offering for 38 Studios, a now-bankrupt video game company.

News Corp CEO to meet EU antitrust chief, Google in focus

News Corp's chief executive will meet the EU antitrust chief this week, the company said on Monday, with the focus expected to be on the EU's investigation into whether Internet search engine Google abused its dominance.

Valeant sets earnings date, shares jump on hope for positive news

(Reuters) - Valeant Pharmaceuticals International Inc , the subject of intense scrutiny over its business practices and pricing policies, said it would release preliminary quarterly results and guidance on March 15, raising hopes the company will serve up some positive news after months of uncertainty.

Verizon Wireless to pay $1.35 million fine to settle U.S. privacy probe

WASHINGTON (Reuters) - Verizon Communications Inc will pay a $1.35 million fine and agreed to a three-year consent decree after the Federal Communications Commission said on Monday it found the company's wireless unit violated the privacy of its users.

Oil hits 2016 high above $40; glut warnings resurface

NEW YORK (Reuters) - Brent crude rose on Monday, hitting a 2016 peak above $40 a barrel as producers sought a new anchor price for oil after a selloff that has lasted nearly two years, although some analysts warned the global glut is still big.

Chinese Hackers Break Into NY Fed, Steal $100 Million From Bangladesh Central Bank

Reports indicate that some of the stolen funds were traced to the Philippines, but given what we know about the "Cyber Axis of Evil," we can only suspect it was Iranians, Chinese, or the criminal/military mastermind Kim Jong-Un who was behind the scam, but whatever the case, someone, somewhere, hacked into Bangladesh's central bank on February 5.

According to Reuters, "some of the funds" have been recovered, but the bank didn't initially say how much or how much was initially stolen. We suppose that theoretically it could have been a rather large sum, as the country has around $26 billion in FX reserves on hand:

But just moments ago we learned from the AFP that the amount lost was around $100 million. "Some of the money was then illegally transferred online to the Philippines and Sri Lanka, a central bank official told AFP on condition of anonymity."

"The bank reported that the USD 100 million was leaked into the Philippine banking system, sold to a black market foreign exchange broker and then transferred to at least three local casinos," AFP continues, adding that "the amount was later sold back to the money broker and moved out to overseas accounts within days."

And here's the punchline: According to AFP, Chinese hackers have been blamed and the money was stolen from accounts held at the New York Fed...

China Is About To Unleash A Monster Housing Bubble, In Six Easy Steps

One week ago we showed the disturbing degree to which the latest (and greatest) housing bubble among China's Tier 1 has gripped the broader public, when we reported that local speculators are waiting in line for days to flip homes.

Visually, it looks as follows - the bubble is entirely in the Tier 1 cities; for now everyone has given up on the other regions which are suffering greatly as a result of the bursting of the commodity bubble and have seen an exodus of recently unemployed workers:

The demand for housing in Shanghai and Shenzen has gotten so "bubbly" that even the government-run news agency Xinhua on Wednesday warned of increasing leverage risks and called for further tightening measures to rein in the market. Which is ironic, because just days later the People's Congress announced it would support the Chinese housing market, sending conflicting messages of whether it does or does not want another housing bubble.

And while we know that retail speculators are simply feeder-fish piggybacking on the latest housing craze, it is the people with far more capital - and leverage - who are ultimately pulling the strings, as an article in the local media explains in detail.

In an article written on Caijing, we get to the bottom of the rapid rise in housing prices in Shenzhen and other Tier I cities. As it notes, the property boom is ominous, and ultimately hints of even more capital outflow and currency devaluation to come. ...

It's Official: This Is The Biggest Short Squeeze Ever (And May Get Even Bigger)

US equity markets are soaring once again and two things are driving it: CTA-driven short-covering in commodities and the algo-driven squeeze of the most-shorted stocks. Having risen 13 of the last 16 days, "Most Shorted" stocks are now unchanged since The Fed rate-hike, soaring 25% in that time - the biggest squeeze in history. And Credit Suisse warns, it could get worse as the dash for trash goes on, and on, and on....

Behold: the biggest short-squeeze on record:

And here's why:

But that punchline for those who are caught on the wrong side of this epic squeeze and dry heaving violently is that as JPM warned over the weekend,"The Most Painful Part Of The Short Squeeze May Be Yet To Come, JPM Warns", and just moments ago Credit Suisses joined the call saying CTAs could create a similar dynamic to stocks in the Oil market.

Commentary from Martin Glanville, our London-based Head of Futures, as it relates to CTAs and Oil positioning. He pointed to the squeeze in Iron Ore and thinks the CTAs could create a similar dynamic in the Oil market.

As much complexity exists in CTA models, there's als ...

Dow Edges Higher After Three-Week Rally

The Dow industrials crept higher Monday amid a three-week rally spurred by new signs of health in the economy.

Justice Department, SEC Investigating Visium

Visium Asset Management LP, a $8 billion hedge-fund firm run by Jacob Gottlieb, is being investigated by the Justice Department and the Securities and Exchange Commission over trading and valuation issues, according to people close to the matter.

Why the Fed Isn't Out of Ammo

The Federal Reserve actually has plenty of ammunition left. But it doesn't work in its conventional weapons.

February 2016 Conference Board Employment Index Decreased Slightly. Lower Employment Growth Expected.

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months declined suggesting "that the rapid job growth in recent months is likely to slow down". Consider that this projected growth is six months from now.

Market Snapshot: U.S. stocks rise as rally in energy stocks lifts indexes

Sharp gains in energy and materials stocks lift the main U.S. indexes, which are now on track to extend their winning streak to five straight sessions.

Capitol Report: Federal Reserve's U.S. employment yardstick sours in February

Just a few days after the government reported a big 242,000 increase in new jobs in February, the Federal Reserve's in-house tool to track the performance of the U.S. labor market fell to the lowest level since the end of the Great Recession.

Commodities Corner: Here's what sent the price of iron ore soaring 20% in one day

Platts' Joseph Innace says China's GDP growth target has been set at a 'manageable and realistic range' of 6.5% to 7% boosting expectations for a recovery in the steel industry.

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