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06Jun2016 Market Update: Averages Remain Higher After Yellen's Speech, Crude Dropping, US Dollar Very Volatile, June Rate Hike Off The Table

Written by Gary

Wall Street remain modestly higher after Janet Yellen speech, but the Fed won't be swayed by one report she said. Fed Chairwoman Janet Yellen said today, the economy will continue to improve and gradual rate hikes will probably be appropriate, but gave no time frame for hikes.

Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.25%, while the Bovespa is leading the IPC lower. They are down 0.90% and 0.07% respectively.

Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 61.0%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 82%
Investors Intelligence sets the breath Above 50 bullish 75% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. 30.26 NYSE % of stocks above 200 DMA Index ($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%. Following a major market correction, the conditions for safe re-entry are when:
a) Daily $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
71.81% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 65.47% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 70.80% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 17.26 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 79.11 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10488

What Is Moving the Markets

Here are the headlines moving the markets.

Yellen faces fine balance on Fed rate hike after job growth tumbles

PHILADELPHIA (Reuters) - Federal Reserve Chair Janet Yellen will likely keep the door open to an interest rate hike within the next few months when she speaks on Monday, while striking a balanced tone about recently disappointing jobs growth and mixed signals in the U.S. economy.

Supreme Court rejects Google appeal in class action dispute

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday rejected Google Inc's bid to throw out a class action lawsuit involving claims that the company deceived California advertisers about the placement of Internet ads through its Adwords service.

Energy, financials lead Wall St gains before Yellen speech

(Reuters) - Wall Street was higher on Monday morning, led by a rally in energy stocks and a rebound in financial shares following a pounding on Friday after a dismal jobs report all but ruled out chances of an interest rate hike in June.

Viacom CEO lawyers urge speedy trial, citing Redstone's health

NEW YORK (Reuters) - Viacom's Chief Executive Philippe Dauman, who is suing over his removal from Sumner Redstone's trust, on Monday said in a court filing that a judge should expedite the matter because the 93-year-old media mogul is in ill health and may soon not be able to provide needed evidence.

U.S. top court rejects Ecuador challenge to Chevron arbitration award

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday rejected Ecuador's challenge to a $96 million international arbitration award in favor of energy company Chevron Corp in a dispute over the development of oil fields in the South American country.

Exclusive: As Iran's oil exports surge, international tankers help ship its fuel

SINGAPORE (Reuters) - More than 25 European and Asian-owned supertankers are shipping Iranian oil, data seen by Reuters shows, allowing Tehran to ramp up exports much faster than analysts had expected following the lifting of sanctions in January.

Pfizer's opioid painkiller can be manipulated for abuse: FDA

(Reuters) - A long-acting opioid painkiller being developed by Pfizer Inc has the potential to deter abuse but can be manipulated, a preliminary review by the U.S. Food and Drug Administration showed.

BlackRock's $2.5 billion sale: a sign of life for Singapore's office market

SINGAPORE (Reuters) - BlackRock Inc said it would sell a 43-storey Singapore office tower for $2.5 billion - one of at least three office building deals in the last two months for a market gripped by worries about oversupply and rising vacancies.

Fresenius, Smiths in two-way race for Pfizer infusion pumps: sources

FRANKFURT (Reuters) - German healthcare supplier Fresenius and British engineering company Smiths Group have emerged as the final bidders for Pfizer's infusion pumps business in a possible deal worth close to $1.5 billion, people familiar with the matter said.

Janet Yellen Explains How The Fed Will Keep What's Left Of Its Credibility In June - Live Feed

Will she or won't she? With an increasing number of market participants entirely confused by the Fed's utterly failed communications policy - as it constantly changes its focus from one meeting to another - Janet Yellen's speech today on the economic outlook and monetary policy at the World Affairs Council of Philadelphia seems critical just one week out from a supposedly "live" June meeting (who market-implied rate-hike odds are now just 4%).

Credibility crushed...

Headlines from prepared remarks:

Everything is still awesome...












JPM Still Hates The Market Rally: Here Are Its Reasons

In the past month, not a day has passed without some major sellside firm (yes, that also now includes traditional bull Goldman Sachs) releasing its bearish take on deteriorating fundamentals, and urging clients to not only not buy the rally but sell into it (and as both retail and "smart money" flows indicate, this advice ha been heeded). Today it's JPM's turn. In the latest note is out of JPM's Mislav Matejka, the equity strategist presents five reasons why "upside for stocks is limited" due to numerous reasons but mostly because "global activity momentum is failing to pick up."

Here are his five reasons not to chase the rally in the short-term:

Equities have seen very large outflows for a number of weeks now, vs bonds which have enjoyed significant inflows.

This could be interpreted as a positive, as one could say that equities appear underowned, vs bonds which might be overowned. US EPS revisions have managed to stay in positive territory for the last 3 weeks. Given these and the fact that stocks have been consolidating the Feb/March gains for two months now, the question is should one look for another leg higher, such as the 10-15% tradeable rally we called for on 15th Feb? Our view is that risk-reward is not attractive for equities, as:

  1. Activity remains sluggish. The latest business expectations reading within US services PMI is the lowest on record. The latest output reading within US manufacturing PMI is the weakest since Sep '09. The ...

Dish: Ergen's Vision Is Worth More Than the Market Thinks

Recent moves by Dish Network enhance the value of its wireless spectrum for a potential buyer.

Mobile Price Wars: No Sign of Peace in Europe

Given government opposition to mergers and acquisitions, the gap between European and U.S. mobile pricing seems likely to remain wide.

Consumer-Credit Growth Isn't All Good News

Consumer credit continues to expand at a healthy pace and defaults remain low. It is too easy for banks to become complacent.

The Fed: Yellen says U.S. remains on track for more interest-rate hikes

Fed Chairwoman Janet Yellen on Monday said the economy will continue to improve and gradual rate hikes will probably be appropriate.

BookWatch: 5 factors that could turn America into another collapsed empire

Nations are just as likely to unravel after periods of prosperity as after periods of depression, warns Todd G. Buchholz, a former White House director of economic policy under President George H.W. Bush.

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