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26May2016 Market Update: WTI Crude Slips, DOW Down 41 Points, SP500 Can Not Break Through The 2100 Level, Bad News For Bulls

Written by Gary

Wall Street is slightly lower today as we go into the afternoon session. Material stocks fell and after oil struggled to stay above the psychologically important $50-per-barrel mark. Oil prices tested the $50-per-barrel mark early this morning as production outages brought a faster-than-expected recovery to an oversupplied market many thought will stay depressed through the year.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.32% while the Bovespa gains 0.28%. The S&P 500 is off 0.02%.

U.S. STOCK INDEXES

The June S&P 500 closed higher on Wednesday as it extended the rally off last Thursday's low. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Today's close above the reaction high crossing at 2079.80 confirms that a short-term low has been posted.

Closes below Tuesday's low crossing at 2041.30 would confirm that a short-term top has been posted. First resistance is the reaction high crossing at 2094.00. Second resistance is April's high crossing at 2105.00. First support is last Thursday's low crossing at 2027.00. Second support is the 38% retracement level of the February-April-rally crossing at 1958.07.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. business spending mired in weakness, but economy picking up

WASHINGTON (Reuters) - U.S. business spending intentions weakened in April for a third straight month amid soft demand for machinery, but a surge in contracts to purchase previously owned homes to a 10-year high supported views economic growth was gaining speed.

Wall Street lower as material stocks weigh

(Reuters) - Wall Street was slightly lower on Thursday as material stocks fell and after oil struggled to stay above the psychologically important $50-per-barrel mark.

Fed's Powell says interest rates could rise 'fairly soon'

WASHINGTON (Reuters) - A U.S. rate hike may come "fairly soon" if data confirm the economy is continuing to grow and labor markets are still tightening, Federal Reserve Governor Jerome Powell said on Thursday in remarks that may help tee up higher rates as soon as mid-June.

U.S. Virgin Islands sues Takata, Honda over airbags

(Reuters) - The U.S. Virgin Islands sued Takata Corp and Honda Motor Co late on Wednesday over the sale of millions of recalled airbags linked to deadly ruptures.

Cartel or talking shop? OPEC awaits Saudi ruling

DUBAI/LONDON (Reuters) - For those seeking guidance on Saudi Arabia's thinking regarding the future of OPEC, the last few weeks' agenda of the new Saudi energy minister, Khalid al-Falih, might offer a few clues.

Oil tests out $50 a barrel as supply concerns resurface

NEW YORK (Reuters) - Oil prices tested the $50-per-barrel mark on Thursday as production outages brought a faster-than-expected recovery to an oversupplied market many thought will stay depressed through the year.

U.S. pending home sales jump to highest level since early 2006

WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes surged far more than expected in April to the highest level in more than a decade, another sign the economy has gained steam during the second quarter.

Workers protest at McDonald's shareholder meeting for second day

OAK BROOK, Ill. (Reuters) - Hundreds of protesters rallied outside McDonald's Corp headquarters as shareholders on Thursday approved executive compensation and voted down a slate of shareholder resolutions, including those involving political contributions and antibiotic use in meat production.

Don't lie, don't cheat, don't start rumors, says new FX code

LONDON (Reuters) - The first global code of conduct for currency trading has banned dealers from lying and starting false rumors as part of new guidelines aimed at rebuilding trust in a foreign exchange market plagued by scandals and accusations of manipulation.

Hard Times And False Narratives

Submitted by Jim Quinn via The Burning Platform blog,

The mainstream media mouthpieces for the establishment peddle false narratives, disingenuous storylines, and outright propaganda to keep the ignorant masses confused, oblivious to reality, misinformed, and passively submissive to the opinions of highly paid "experts" and captured fiscal authorities. The existing social order likes things just as they are.

They reap ill-gotten riches, wield unchecked power, and control the minds of the masses. They are the invisible government consciously manipulating the minds, habits and opinions of the multitudes in order to dominate society, control the levers of government, and accumulate obscene levels of wealth through manipulation of the currency and domination of the banking and corporate interests.

One of the false narratives being flogged by the establishment propaganda peddlers is the mass retirement of Baby Boomers causing the plunge in the employment to population rate from 64.4% in 2000 to 59.7% today. They need to peddle this drivel, because the difference between these two rates amounts to 12 million missing jobs. The employment to population ratio is currently at 1984 levels. Any critical thinking person with basic math skills realizes the government reported unemployment rate of 5% is an Orwellian farce.

Over 40% of working age Americans aren't working, amounting to 102 million people, and the establishment touts the ludicrous lie of a 5% unemployment rate. With only 123 million Americans employed full-time and virtually all the job "growth" since 2009 in non-producing low paying service jobs in the retail, restaurant, hospitality and healthcare industries, wages and household income remain stagnant. The 12 million shortfall in jobs isn't due ...

Losing Ground In Flyover America

Submitted by David Stockman via Contra Corner blog,

The cowardly dithering in the Eccles Building is sucking Wall Street punters into a vortex. And it promises to be the mother of all bubble implosions.

There is no other possible outcome for a stock market that is trading at 24X reported earnings in the teeth of the most enormous headwinds ever accumulated.

The intensifying global deflation/recession lapping upon these shores gets more ominous by the day. Yet that's only the half of it.

When you take an unvarnished look at the domestic economy, the real recessionary skunk in the woodpile becomes apparent. Yet the casino is falsely capitalizing earnings as if recessions have been outlawed and the nirvana of Keynesian full-employment has become a permanent condition, world without end.

Today's bubblevision meme that all is well because the Fed judges the economy to be strong enough to absorb 1% money market rates some time next year is just a manifestation of that permanent full employment delusion. After all, earnings always collapse during a recession—-so implicitly there is not one in sight as far as the eye can see.

Then again, why would anyone credit the Fed's insight into the future, or even its grasp of the present? In its April minutes, for example, it noted that the world financial dangers that caused it to pause in March have now eased.

No they haven't. As detailed below, the only thing that changed is that China went through another flash bubble in the commodity space that is already done and gone.

In fact, the Fed has never, ever anticipated a recession——even ...

"We Will Fight This All The Way To The Supreme Court" - 11 States Sue Obama Over Transgender Bathrooms

When last week, Oklahoma threatened to impeach Obama over the administration's recommendations on accommodating transgender students, saying the president overstepped his constitutional authority, few paid much attention. After all, it is safe to say there have been far more egregious violations of the constitution by this administration, for it to be too worried about allowing transsexuals to use any bathroom they choose.

However, now that ten other states joined Oklahoma overnight in suing Obama, it may be time to pay attention.

According to Reuters officials from 11 U.S. states sued the Obama administration on Wednesday to overturn a directive telling schools to let transgender students use bathrooms matching their gender identity, decrying the policy as "a massive social experiment."

The 11 states' lawsuit accused the administration of taking that argument too far and improperly, widening the scope of interpretation of civil rights law.

Ramping up the simmering battles over contentious cultural issues in America, the states, led by Texas and most with Republican governors, accused the federal government of rewriting laws by "administrative fiat." Texas was joined by Alabama, Georgia, Louisiana, Oklahoma, Tennessee, Utah, West Virginia and Wisconsin, plus Arizona's Department of Education and Maine's governor.

Texas Republican Gov. Greg Abbott said Wednesday that the state's attorney general, Ken Paxton, would challenge the controversial order, which tells school district to allow transgender students to use the restroom of their choice. No othe ...

The Oil Rally: What Comes After $50

Oil has broken above $50 a barrel for the first time in 2016. There may be more gains to come.

Hewlett Packard and Microsoft: Why Focus Is In, Scale Is Out

Downsizing at big tech companies is a cautionary tale that size doesn't always win.

Telstra's Autohome Revolt Could Delay Goodies for Shareholders

Telstra's plans to boost shareholder returns have been complicated by a lawsuit to stymie its stake sale in Autohome, a Chinese car-buying website.

Currencies: Dollar pares early drop as Fed's Powell says rate hike could come 'soon'

The U.S. dollar trimmed some of its early decline after a Federal Reserve official suggested that raising interest rates this summer would be œappropriate so long as economic data holds up.

The Fed: Fed's Powell: Interest-rate hike may come soon, but weak productivity will cap increases

Slower productivity growth may keep interest rates below where they stood before the Great Recession even after inflation returns to its target, a top Federal Reserve official says.

Europe Markets: European stocks close at best level in 5 weeks; Spanish banks slide

European stocks logged a modest gain Thursday as energy shares got a brief boost from Brent crude futures, which extended their gains to touch the $50-a-barrel level.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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