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10Jun2016 Market Update: US Averages Down, WTI Crude Slips Further, US Dollar Melts Up, Investors Seeking Safe Havens

Written by Gary

Wall Street remains depressed (SPY -0.9%) and trading in a narrow sideways zone. The University of Michigan came in higher than expected at 94.3 but lower from May's reading of 94.7. USD Baker Hughes U.S. Rig Count came in at 414 up from 408. The price of WTI crude burped, but has continued to decline as the US dollar continues to melt up. Global growth continue to worry investors and short-term indicators are bearish.


Here is the current market situation from CNN Money

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 78%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 67%
Investors Intelligence sets the breath Above 50 bullish 63.2%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. 25.81
StockChart.com NYSE % of stocks above 200 DMA Index ($OEXA200R) $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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
76.00%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 67.52%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71.80%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value

16.51

StockChart.com 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 78.61
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors

10,454

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. down sharply on oil drop, global growth worries

(Reuters) - Global growth worries and a sharp drop in oil prices sent jitters through Wall Street, leading the three major U.S. indexes lower for the second straight day on Friday.

Gundlach: Investors avoiding risk due to falling global GDP expectations

NEW YORK (Reuters) - Jeffrey Gundlach, chief executive officer at DoubleLine Capital, said Friday that investors are dropping risk assets from their portfolios because of falling global Gross Domestic Product expectations, fueled by China's slowing growth, and the U.S. presidential race.

Viacom warns bylaw change may hurt stock: SEC filing

NEW YORK (Reuters) - Viacom Inc warned on Friday that its shares could fall as a result of a bylaw change by controlling shareholder Sumner Redstone to restrict Viacom's planned sale of a stake in its Paramount film unit.

Tesla says there is no safety defect in its Model S or X

(Reuters) - Tesla Motors Inc said on Friday there was no safety defect in its Model S or Model X, and that the U.S. National Highway Traffic Safety Administration (NHTSA) had not opened any investigation or any "preliminary evaluation" on the matter.

Lockheed may shift F-35 fighter work away from Canada

BERLIN (Reuters) - Top U.S. weapons maker Lockheed Martin Corp is studying whether to shift work on its multibillion-dollar F-35 fighter jet away from Canadian firms amid uncertainty over Ottawa's plans to buy the jet.

Toyota tells U.S. dealers to disclose future Takata recalls

WASHINGTON (Reuters) - Toyota Motor Corp said on Friday it had told its U.S. dealers to disclose, at the time of sale, the identity of vehicles with defective Takata air bag inflators that will be subject to recalls by 2018.

Caution pervades at four of world's top central banks

LONDON (Reuters) - It is a sign of the caution that permeates the global economic outlook when four of the world's top central banks, all due to meet within days of each other, are almost unanimously expected to make no change to their extraordinary stimulus programs.

Terra Firma boss Hands drops $2 billion EMI case against Citi

LONDON (Reuters) - Briton Guy Hands has withdrawn his case against Citigroup over the 2007 buyout of music label EMI, his private equity firm Terra Firma said on Friday, ending almost seven years of on-off litigation over the disastrous deal.

No thanks: Citigroup sues AT&T for trademark infringement

NEW YORK (Reuters) - Citigroup Inc sued AT&T Inc on Friday, saying the phone company's use of "thanks" and "AT&T thanks" in a new customer loyalty program infringed its trademark rights to the phrase "thankyou."

Oil Gives Up Post-Payrolls Gains As Rig Count Rises For 2nd Straight Week

Following last week'sunexpected rise in US oil rigs - and the biggest increase in US Crude production since the first week of January - the lagged price of oil suggested that rig counts would continue to rise this week, and it did - up 3 to 328. Oil prices had dropped from over $51.50 to almost $49 - erasing the post-payrolls gains- ahead of the rig count data and were relatively unimpressed by the print.

Production rose last week for the first time in 18 weeks and by the most since Jan 1st:

As rig counts increased by the most since December and for the 2nd week in a row... leaving oil unchanged since payrolls...

Charts: Bloomberg

Gawker Files For Bankruptcy

Moments ago the financially challenged tabloid nemesis of Peter Thiel, Nick Denton's Gawker Media, filed for bankrutpcy - an outcome predicted by many as inevitable - listing assets between $50 and $100 million, and liabilities between $100 and $500 million.

No matter on which side of the Thiel-Denton debate one sides, we doubt many tears will be shed as yet another chapter in "new media" comes to a close.

The WSJ adds that the company will be put for sale in bankruptcy auction, which will begin with an opening bid of $100 million from the digital media company and publisher Ziff Davis LLC, according to a person familiar with the matter. The sale was triggered after the judge overseeing the invasion-of-privacy case brought by Hulk Hogan "whose real name is Terry Bollea "declined to issue a stay pending Gawker's appeal. That required the company to put up a $50 million bond.

Why is the company filing now? Simple: to make Hulk Hogan's aka Terry Bollea's $130 million claim part of the prepetition, unsecured liabiltiies.

"Whatcha gonna do when Chapter 11 runs wild on you"

Proceeds from a sale will go into a fund to finance further litigation costs and cover whatever damages may ultimately be leveled following the appeals process, which could take years to resolve. Gawker has said that it expects to ultimately prevail.

Whatever money is left ...

Apple: Looking Through the iPhone Gloom

A maturing iPhone business means Apple's business gets unavoidably complex as it spreads its efforts.

The Yield Curve's Message for the Fed

The narrowing gap between short- and long-term rates may not be the signal it once was, but the Federal Reserve should still pay heed.

China's Banks: How Fixing Problems Can Make Them Worse

Choking off one part of China's banking system could leave a larger part of it struggling for air.

27 May 2016: ECRI's WLI Growth Index Improves - At 3 Year High

ECRI's WLI Growth Index which forecasts economic growth six months forward expanded marginally and remains in positive territory for the eleventh week - after spending the previous 34 consecutive weeks in negative territory.

Market Extra: Be afraid: Permabear Marc Faber is sounding downright bullish

Has Wall Street's biggest permabear lost his teeth? Marc Faber doesn't sound so downbeat on equities right now.

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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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