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10Mar2016 Market Update: Markets Plunge, DOW Off Triple Digits, NASDAQ Down 1.2%, US Dollar Fell To Low 96's And Gold Climbed To1273

Written by Gary

The ECB cut rates this morning sending the US futures soaring, then the European Central Bank chief Mario Draghi suggested there would be no further cuts. That commentary squashed his stimulus message and sent the markets plunging where the DOW is down triple digits. Crude plunged and is now easing back up to prior levels.

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) 72%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 69%
Investors Intelligence sets the breath Above 50 bullish 53.7% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. 70.18 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 38.27% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 57.67% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71.80% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 19.32 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 75.24 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,847

What Is Moving the Markets

Here are the headlines moving the markets.

ECB pulls out all stops with rate cuts, stimulus boost

FRANKFURT (Reuters) - European Central Bank chief Mario Draghi unleashed a bold easing package on Thursday, cutting rates and expanding asset buys, but undid the very stimulus he hoped to achieve by suggesting there would be no further cuts.

TransCanada in talks to buy Columbia Pipeline Group: source

(Reuters) - TransCanada Corp , the company behind the controversial Keystone XL oil pipeline project, is in talks to buy U.S. natural gas pipeline operator Columbia Pipeline Group Inc , a person familiar with the matter told Reuters.

U.S. jobless claims hit five-month low as labor market strengthens

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits fell more than expected last week, hitting its lowest level since October, pointing to sustained strength in the labor market that should further dispel fears of a recession.   Initial claims for state unemployment benefits declined 18,000 to a seasonally adjusted 259,000 for the week ended March 5, the lowest reading since mid-October, the Labor Department said on Thursday.

Apple sets March 21 event, Wall Street sees new, smaller iPhone

(Reuters) - Apple Inc sent an invite to reporters on Thursday for an event at its Cupertino, California headquarters on March 21, possibly signaling the unveiling of a new, smaller iPhone.

HSBC money laundering report's release delayed amid U.S. appeal

NEW YORK (Reuters) - A U.S. judge has agreed to delay the release of a report that says HSBC Holdings Plc "moved too slowly" to enhance its anti-money laundering compliance program following a $1.9 billion pact with the U.S. Justice Department.

Loss of U.S. boss seen hitting VW turnaround, but not talks with regulators

BERLIN (Reuters) - The departure of Volkswagen's U.S. boss is a blow to the carmaker's attempts to revive sales after its emissions test cheating scandal, but should not disrupt its efforts to strike a deal with U.S. regulators, analysts and sources told Reuters.

U.S., EU officials downplay risk of 'tax war'

DUBLIN (Reuters) - Senior U.S. and EU officials on Thursday played down the risk that probes into U.S. firms' tax dealings could lead to a trans-Atlantic tax war, saying both sides were engaging closely to avoid an escalation.

VW to cut 3,000 office jobs in Germany by end 2017: sources

BERLIN (Reuters) - Volkswagen plans to cut about 3,000 office jobs in Germany by the end of 2017 as the carmaker strives to offset the cost of its emissions test-rigging scandal, two sources at the company said on Thursday.

Fed to raise rates by mid-year, again before year-end: Reuters poll

(Reuters) - The U.S. Federal Reserve will hike rates again by end-June and once more before year-end, according to economists in a Reuters poll who are generally as convinced or even more about the trajectory of rates than a month ago.

The World Economy Wreckers Of Beijing

Submitted by David Stockman via Contra Corner blog,

The desperate suzerains of the Red Ponzi are incorrigible. There appears to be no insult to economic rationality that they will not attempt in order to perpetuate their power, privileges and rule.

So now comes the most preposterous gambit yet. Namely, a veritable tsunami of state handouts to foster, yes, capitalist entrepreneurs!

That's right. As described by Bloomberg, Premier Li Keqiang gave the word, and, presto, nearly $340 billion poured into an instantly confected army of purported venture capital funds run by local government officialdom all over the land.

China is getting into the venture capital business in a big way. A really, really big way.

The country's government-backed venture funds raised about 1.5 trillion yuan ($231 billion) in 2015, tripling the amount under management in a single year to 2.2 trillion yuan ($340 billion), according to data compiled by the consultancy Zero2IPO Group. That's the biggest pot of money for startups in the world and almost five times the sum raised by other venture firms last year globally, according to London-based consultancy Preqin Ltd.

Really? These are the same folks who built themselves a 1.2 billion ton steel industry in less than two decades, representing double what they can actually use and far more capacity ...

Today's Market's "Explained" In Just Two Headlines

Ten days ago, when we were struggling to find the answer for the biggest March 1 rally in history, especially after abysmal economic data, we resorted to the following two Reuters headlines which made it all clear, first this:

Following in under two hours by this.

Fast forward to today when in the aftermath of the ECB's announcement in which Draghi "pulled out all stops with rate cuts, stimulus boost", the market first soared then tumbled. Here is the "explanation" once again courtesy of Reuters:

First this:

And then, when the market U-turned, so did the "explanatory" narrative, as per this:

Why Saudi Arabia Has No Intention To End The Oil Glut

Submitted by Dwayne Purvis via,

In the geopolitical and oligopolistic global oil market, purely financial supply and demand has often been a secondary force, acting when it is allowed to act. It is the strategic behavior of the producing titans, not their talk or the slow-motion supply-demand balance, which has the real power to move markets. That is the case in the last two years and remains the case in 2016.

The behavior of Saudi Arabia since 2014 has demonstrated the intent to increase both capacity and supply, a pattern not yet mitigated despite a distracting news feed from OPEC and the kingdom.

(Click to enlarge)

Figure 1: Rig counts in US (oil-directed) and Saudi Arabia.

Figure 1 shows the rig counts in Saudi Arabia and the United States from 2009 to last week. (footnote: The U.S. count is oil-directed rigs while it is the total rig count in Saudi Arabia which produces mainly associated gas and exports none.) The data is shown on two different scales in such a way that the curves are equivalent during 2012 and 2013 as this was a relatively stable baseline with Saudi running 80 to 85 rigs, and 1300 to 1400 were drilling for oil in the US. What is most interesting are the actions since then.

As the shale oil revolution had sustained momentum at prices near $100 /bbl, Saudi Arabia began the second most rapid rig count expansion in its history starting in late 2013. During 2014, while the potential for oversupply was clearly known and even as prices turned sharply down in the latter half of the year, ...

"It's A Bloodbath" - Dow Dumps 300 Points, US Equities At One-Week Lows

"Everyone is offside," exclaimed one trader we talked to, noting the swings in EURUSD and stocks have tagged stops everywhere. Dow futures are now down 300 points from Draghi highs with S&P futures breaking below the crucial 1980 trendline support. As the trader concluded, "it's a bloodbath."

Not what everyone was expecting...

Ramp is over...

Ironically, while a 300 point swing in The Dow is worth noting, the sentiment shift of the last 3 weeks has once again enabled this "nothing can go wrong" attitude and panicced many weak hands today. It seems a rally built on the biggest short-squeeze in history may not be sustainable after all... just like in Nov 2008...

And with gold soaring and bonds and stocks tumbling, it suggests the age of central banker omnipotence is at an end...

ECB Announces Raft of New Measures

The European Central Bank announced a package of six measures to revive inflationary pressure in Europe, cutting all of its key interest rates and increasing its monthly bond purchases under its asset-buying program.

Stocks Give Up Gains, Euro Swings After ECB Cuts Rates

Stocks gave up gains and the euro swung sharply Thursday after the European Central Bank announced a series of fresh stimulus measures to boost sagging eurozone inflation.

Why the ECB's Big Guns Can't Win This War

The ECB surprised markets, but surprisingly, markets swooned. Questions about extraordinary monetary policy will persist.

The Tell: 6 key takeaways from European Central Bank's QE bazooka

The European Central Bank surprised investors Thursday. Here are the key takeaways from the bank's latest monetary policy moves.

Economic Report: Stocks, property values push up household net worth by $1.64 trillion in Q4

Household net worth rebounded by $1.64 trillion in the fourth quarter, thanks to an upturn in the stock market and gains in real estate.

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