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08Mar2016 Market Update: WTI Crude Fails At Resistance, Now Testing Support, Failing That, Look For Bears To Emerge Victorious And Sending Averages Down

Written by Gary

US markets open lower and after the 'morning dip' (because of crude falling) have remained where they first traded, but showing signs of becoming weaker WTI crude fell from testing its resistance ($38 +) this morning to testing is support in the mid 36's and 'weak' indicators show it may not hold. All things considered, if the various supports hold today, we could see a temporary resurgence in this weak bull rally.

Here is the current market situation from CNN Money

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 71%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 71%
Investors Intelligence sets the breath Above 50 bullish 54.0% 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.

103.98 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.

40.69% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 57.64% S&P 500 Bullish Percent Index ($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 ($TNX) ten year note index value 18.20 Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 76.22 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,915

What Is Moving the Markets

Here are the headlines moving the markets.

VW faces Allianz suit over share drop; jobs under threat after scandal

WOLFSBURG, Germany (Reuters) - German insurer Allianz plans to sue Volkswagen over the sharp drop in its shares as a result of the carmaker's diesel emissions scandal, a source familiar with the situation told Reuters.

Home Depot settles consumer lawsuit over big 2014 data breach

(Reuters) - Home Depot Inc agreed to pay at least $19.5 million to compensate U.S. consumers harmed by a 2014 data breach affecting more than 50 million cardholders.

United Continental investors nominate 6 for board; proxy fight looms

(Reuters) - Two investment funds with significant stakes in United Continental Holdings Inc nominated a slate of six directors for the airline's board, increasing the chances of a proxy fight as the company digs in to defend against the attack.

Oil slumps on new worries about supply, Goldman caution

NEW YORK (Reuters) - Oil prices fell about 3 percent on Tuesday, retreating after six days of gains for benchmark Brent crude, as Goldman Sachs suggested the rally was unsustainable and analysts expected data likely to show another record high in U.S. stockpiles.

Wall Street dips as oil falls, China data disappoints

(Reuters) - Wall Street was lower on Tuesday as oil prices slipped and weak Chinese data rekindled fears of a global economic slowdown led by the world's second-biggest economy.

Exclusive: iHeartMedia hires Moelis to tackle debt burden - sources

(Reuters) - iHeartMedia Inc has hired Moelis & Co as a financial adviser, the most significant step yet by the largest owner of U.S. radio stations to deal with its $21 billion debt pile, according to people familiar with the matter.

Shake Shack shares slide as growth slows

(Reuters) - Shake Shack Inc's shares fell as much as 11 percent in early trading on Tuesday, a day after the hamburger chain reported the slowest sales growth at established restaurants in a year.

Citi Slumps After CFO Forecasts Huge Revenue Drop

Just two days ago, everything was awesome - oil was up, stocks were up, financials were 'winning' - and then question started about why credit risk hadn't rallied like stocks.

But today we get our slap back to reality as Citi CFO unleashes the following: CITIGROUP SEES INVESTMENT BANKING REVENUE DOWN 25%, FIXED INCOME, EQUITY TRADING REV DOWN 15% YOY. The stock is rapidly giving up its "everything's fine" gains as Citi "hopes" for more rate hikes... but does not expect them.

Citigroup's CFO Gerspach is speaking at the RBC Conference in NYC... (live feed here)

"In fixed income, we see spread products continuing to have pressure," Gerspach said. "That's been a story for the last 18 months."




Japanese Government Bond Yields Collapse To Record Lows

Amid a strong 30 year auction overnight, long-dated Japanese Government Bond yields utterly collapsed. 30Y yields dropped 21bps - the biggest absolute drop in over 3 years and biggest percentage drop ever - to a record low 47bps. Since Kuroda unleashed NIRP, the entire JGB has been crushed and last night's rush for long duration debt (well at least there is some yield there?) has flattened the curve to record lows. For context, Japan's 30Y yield is now below US 2Y yield...

Nothing to see here...

As Reuters reports,

Japanese government bond yields tumbled to fresh record lows on Tuesday after a firm 30-year auction fuelled a rally for debt instruments that still offer positive yields, which have become scarce under the Bank of Japan's negative interest rate policy.

Weaker Tokyo stocks also increased the allure of the bond market, with the Nikkei falling to a one-week low.

The benchmark 10-year yield fell to a new record low of minus 0.100 percent.

The 30-year yield plummeted 21 basis points, the biggest one-day fall in three years, to a life-time trough of 0.470 percent.

The rally by super long JGBs was triggered by strong results in a 30-year auction, underlining solid investor demand for the maturities that offer positive yields but also entailing greater duration risk.

"There were some concerns that the 30-year auction may not garner sufficient demand and t ...

The Price Isn't Right - How Central Banks Are Fixing To Ambush The Casino

Submitted by David Stockman via Contra Corner blog,

The casino is incorrigible. After a monumental short squeeze that has lifted the averages right into the jaws of danger, Goldman Sachs has the temerity to print the following:

"Our model suggests SPX calls are more attractive than at any time over the past 20 years".

There must have been a mullets' breeding frenzy awhile back because it's hard to fathom how Goldman has any real customers left. Then again, its current preposterous call is just indicative of the horrible threat heading menacingly toward what remains of main street's 401k investments.

To wit, the Fed and other central banks have thoroughly falsified financial market prices and destroyed all of the ordinary mechanisms of financial discipline. Foremost among these are short sellers and a meaningfully positive cost of carry trades.

Markets are therefore unhinged from any connection to fundamental economic and financial reality, meaning that they are capable of an extended period of spasmodic deadcat bounces that will have only one end result.

Namely, the naïve and desperate among main street investors who still, unaccountably, frequent the casino will presently be taken out back and shot yet another time. The market technicians are pleased to call this "distribution". Would that someone on Wall Street man-up and amend the phrase to read " distribution.......of losses to the mullets" and be done with the charade.

The S&P 500 is heading through 1300 from abov ...

U.S. Stocks Drop After Recent Rally

U.S. stocks fell Tuesday following five straight sessions of gains, their longest winning streak since October.

Junk-Bond Rebound Signals Easing Fear

The riskiest part of the U.S. corporate-bond market is staging a comeback, marking an upswing in investor confidence following a turbulent start to the year.

Yields on Japanese Government Bonds Hit All-Time Lows

The yield on Japan's benchmark 10-year government bond hit a new low in negative territory and longer-term bond yields also fell to record lows.

Employers Brace For March Madness

from Challenger Gray and Christmas

March Madness is just around the corner and employers across the nation are bracing for the inevitable drain on workplace productivity.

Low oil price claims another victim " Goodrich Petroleum to miss bond interest payment

Company says it will use 30-day grace period before being officially in default.

Market Extra: Oil stocks tumble as short squeeze fades

Oil stocks trade broadly and sharply lower, as the recent short squeeze in the sector fades along with a big pullback in crude-oil prices.

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