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15Jul2016 Market Update: Wall Street Cools After New Historic Highs, Short-Term Indicators Bearish, Longer Term Models Show Bears In Control For Next Two Weeks

Written by Gary

US major indexes seem to have bottomed out for this Friday session after the Dow and the SP 500 opened, hitting new highs after strong U.S. retail sales data and a rise in biotech stocks, offset disappointing results from big banks. Stocks have reversed course and are trading lower this afternoon as investors interest in equities cool after five straight days of gains.


Here is the current market situation from CNN Money

North and South American markets are mixed. The IPC is higher by 0.11%, while the S&P 500 is leading the Bovespa lower. They are down 0.20% and 0.16% respectively.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 75%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear

89%

Investors Intelligence sets the breath Above 50 bullish 63%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +40.33
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
77%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 68%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 72%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 15.96
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 81.00
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,750

What Is Moving the Markets

Here are the headlines moving the markets.

S&P, Dow mark new highs on strong retail sales data

(Reuters) - The Dow and the S&P 500 inched up on Friday, hitting new highs after strong U.S. retail sales data and a rise in biotech stocks, offset disappointing results from big banks.

U.S. retail sales, industrial output data buoy economic outlook

WASHINGTON (Reuters) - U.S. retail sales rose more than expected in June as Americans bought motor vehicles and a variety of other goods, reinforcing views that economic growth picked up in the second quarter.

Herbalife settles pyramid scheme case with regulator, in blow to Pershing's Ackman

WASHINGTON/NEW YORK (Reuters) - Herbalife Ltd agreed to a $200 million settlement with U.S. regulators on Friday, under which the dietary supplements maker will change the way it does business and avoid being labeled a pyramid scheme, a blow to hedge fund manager Bill Ackman who for years has been betting against the company.

Paramount stake sale could hamper deal for Viacom: National Amusements

(Reuters) - Sumner Redstone's privately held movie theater company said on Friday it opposes the sale of a minority stake in Viacom Inc's Paramount Pictures, because such a transaction could hurt the chances of a deal involving all of Viacom.

Citigroup's profit falls less than expected; trading helps

(Reuters) - Citigroup Inc beat Wall Street expectations on Friday with a smaller-than-expected drop in second-quarter profit as a rebound in trading activity partly offset the effects of persistently low U.S. interest rates.

Takata settles Florida air bag injury lawsuit

WASHINGTON (Reuters) - Lawyers for a Florida woman who was left a quadriplegic after a Takata air bag inflator deployed in a 2014 crash said Friday they had settled a lawsuit against the Japanese company.

Wells Fargo profit drops as loan provisions rise

(Reuters) - Wells Fargo & Co reported a 3.5 percent fall in quarterly profit on Friday as it set aside more money to cover potential losses on new loans it made.

Jetmakers shrug off demand risks after mixed Farnborough

FARNBOROUGH, England (Reuters) - When a freak English summer storm flooded exhibition halls at this week's Farnborough Airshow, the stiff-lipped announcer told sodden aerospace executives: "Please do not panic: we will not evacuate at this stage."

Brazil's foreign minister warns against overappreciation of real

BRASILIA (Reuters) - Brazilian Foreign Minister Jose Serra warned against the excessive appreciation of the country's currency as it could hurt exporters, revealing concerns in the interim government that a stronger real could further sink an economy mired in recession.

General Market Commentary 7-15-2016 (Video)

By EconMatters

We discuss the financial markets from Gold and Copper to Stocks and Currencies in this video. It was a very bad week for bond holders globally, but especially here in the United States.

EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle

This Is What "Something Big" Looks Like In This Market

It was just over a week ago when we first brought attention to something nobody else was focusing on (yet): Bernanke's visit to Japan, where he was set to "secretly" - because it quickly became very "public" - meet with Kuroda and Abe in what was set to be the first official pitch for Japan to adopt "helicopter money."

The article, prudently, was called "Something Big Is Coming: Bernanke To "Secretly" Meet With Kuroda; "Helicopter Money" On The Agenda" and we concluded as follows:

So is it time? Is Bernanke about to unleash the next, and final, monetary policy evolutionary step, one which launches "helicopter money" in Japan, and if successful, brings it across the Pacific to the US?

We don't know, but if anyone is still holding on to USDJPY shorts, now may be a good time to quietly close them out, because if we are right, and a "helicopter money" is about to be served for the first time in modern history, things are about to get very volatile, very fast.

Now that one week has passed, we can look back to see if "something big" indeed came.

It did.

As the chart below shows, those who covered their USDJPY shorts lucked out; better yet anyone who went long the USDJPY, just experienced the move of a lifetime because the Yen just had its biggest weekly drop in the 21st century, going all the way back to 1999.

And since the Yen remains the carry ...

The Writing Is On The Wall (Again)

Authored by Bonner & Partners' Bill Bonner, (annotated by Acting-Man's Pater Tenebrarum),

Time to Sell... Maybe

Yesterday, the S&P 500 hit a new all-time high. And the Dow just hit a new record close as well. If you haven't sold yet, dear reader, this may be one of the best times ever to do so.

tattered flag bb.

It's still flying... sorta. Meet Bill Bonner's tattered crash flag

We welcome new readers with a simple insight: Markets are contrary, pernicious, and downright untrustworthy. Just when the mob begins to bawl most loudly for stocks... the market sets its trap.

Longtime Diary sufferers will be quick to straighten out the record. We've warned that stocks have reached a peak several times over the last four years. Each time, we thought we saw the writing on the wall... and each time, we were mistaken. We raised our Crash Alert flag.

But the poor ol' Black and Blue just fluttered in the wind, as stock prices rose ever higher. Eventually, it became so tattered, we took pity on it, folded it up, and put it away.

In the interest of full disclosure, as well as reputation hygiene, we saw a bear market coming in 1999 and 2007, too. We were right then. But lately, we've either been dead wrong... or dead early.

China Economy Tilts Further in Wrong Direction

The pressure for Beijing to do more to prop up growth only seems to increase.

How to Understand the Biggest Concern Facing the U.K. Post Brexit

A weaker pound will unwind some of the U.K.'s current account deficit, though the benefits may be limited.

Viacom's Infighting Opened Door to Chinese Bid

Viacom's move to strike a deal with Wanda for Paramount may be a way for its embattled CEO to get the upper hand.

Market Snapshot: Stocks pressured after reaching record territory; poised for weekly gains

Stocks reverse course and trade lower Friday as investors' interest in equities cool after five straight days of gains which had pushed the Dow industrials and S&P 500 to record levels.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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