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28Jul2016 Market Update: US Stock Market Down And Flat, WTI Crude Slipping Further, US Dollar Steady And Short-Term Indicators Neutral

Written by Gary

US Major indexes have moved off the morning session lows to sea-saw upwards saving some losses. The DOW remains down 45 points, the $NDX is up +0.09%. WTI crude is still trending down, testing the 41 handle and short-term indicators remain neutral for now. The large caps edged lower today following weak economic data and a set of disappointing earnings from companies, including Ford.


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 80%
Investors Intelligence sets the breath Above 50 bullish 65
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -9.03
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
82
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 70%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 75%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 15.01
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 81.24
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,714

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street falls on disappointing earnings, weak data

(Reuters) - The S&P 500 and the Dow edged lower on Thursday following weak economic data and a set of disappointing earnings from companies, including Ford.

U.S. jobless claims rise; labor market still strong

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits rose more than expected last week, but the underlying trend continued to point to sustained labor market strength. Initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 266,000 for the week ended July 23, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 fewer applications received than previously reported.

Facebook shares hit record high as it beats estimates again

(Reuters) - Facebook Inc is growing so fast analysts can't keep up.

Judge rejects Sumner Redstone bid to end Viacom CEO lawsuit

(Reuters) - A Massachusetts judge on Thursday rejected Sumner Redstone's bid to quickly end a case that will likely determine the future of the media mogul's $40 billion holdings, marking a victory for Viacom Inc Chief Executive Philippe Dauman.

Vivendi considers suing Mediaset for defamation: spokeswoman

PARIS (Reuters) - French media giant Vivendi is considering suing Mediaset for defamation after the Italian broadcaster denounced what it sees as an unacceptable u-turn on a deal regarding its pay-TV arm Premium.

Lackluster U.S., China sales drag on Ford Motor profit, shares tumble

DETROIT (Reuters) - Ford Motor Co reported weaker-than-expected profit in the second quarter and declared that the U.S. auto industry's long recovery was at an end, sending its stock and those of other auto companies tumbling.

Oracle to buy NetSuite for $9.3 billion to gain cloud computing clout

(Reuters) - Business software maker Oracle Corp said on Thursday it would buy NetSuite Inc for about $9.3 billion in cash, a deal designed to help Oracle gain market share in the fast-growing cloud computing business.

Despite dieselgate, VW becomes top-selling carmaker as Toyota slips

TOKYO/BERLIN (Reuters) - Toyota Motor Corp reported a drop in first-half vehicle sales on Thursday following a series of production stoppages, falling behind Volkswagen which became the world's top-selling carmaker in the first six months of 2016 despite its emissions scandal.

Dow Chemical says cost savings will likely exceed FY target

(Reuters) - Dow Chemical Co reported a better-than-expected quarterly profit as lower costs helped boost margins and the company indicated that it would exceed its cost-cutting target for the year.

Crude Crashes Into Bear Market To April Doha Lows

WTI Crude (Sept 16) futures are within a hair of trading with a $40 handle - something that has not happened since the lows after the failed Doha talks in April. From the June highs at almost $53, oil is down 22% - a bear market -as inventories, rig counts, and production all rise.

The rally is over...

And while production is up in the US (along with rig counts and inventories), JPMorgan notes the global picture is not helping...

Overnight in Asia, weekly inventory data was reported in Singapore, with a build in both light and middle distillates stocks to 15,326kbbls (13,860kbbls last week) and 13,194kbbls (12,192kbbls last week), respectively. Last week's data has been restated and now shows builds (+905kbbls in middle distillates and +327kbbls in light distillates) versus draws (-304kbbls in middle distillates and -610kbbls in light distillates) reported last week.

Middle distillate stocks are approaching the upper end of the 5-year range, while light distillate (i.e. gasoline) stocks are trending well above the 5-year highs after recent builds (see charts below). Also this morning, European (ARA) weekly inventory data reported a draw in both gasoline and gasoil inventories to 1,284ktonnes (1,354ktonnes last week) and 3,236ktonnes (3,381ktonnes last week), respectively. ARA gasoil stocks are at the high end of the five-year range (5-year average 2,523ktonnes), while gasoline stocks are still well above the 5- year seasonal range (5-year average 786ktonnes).

"We ...

Credit Suisse: We Have Never Had So Many Traders Saying "We Are Totally Lost"

In his latest Global Equity Strategy update piece, Credit Suisse strategist Andrew Garthwaite takes a random walk across Wall Street's trading desks, and confirms what many know: namely, that nobody actually knows anything.

Garthwaite writes that "his team has come across almost no one who seems to have outperformed or made decent returns this year." He cites data from Morningstar according to which in the year to July 1st, just 29 out of 242 funds in the Investment Association UK All Companies sector beat the performance of the FTSE All Share. Moreover, the Dow Jones Credit Suisse Long/Short equity index, which tracks hedge fund performance, fell by 5% year-to-date.

As a result, the reaction by active managers to outperform the broader market, or even their benchmark, in a time of surging redemptions, has led to what may be best described as performance paralysis, or better yet panic:

"we have never had so many client meetings starting with statements such as 'we are totally lost'."

What makes things worse, is that even as central banks push stocks to record highs and beyond, the "fundamental analyst" in every investor is screaming that prices are just too damn high. As Credit Suisse puts it, "clients are close to being as bearish on equities as we can remember. Clients do not find equity valuations attractive enough to compensate for the macro, political, earnings and business model risks."

And yet, the Fed keeps forcing every investor starved for yield, into risky assets, which are now trading at multiples exorbitant that even Goldman has repeatedly warned, most recently this weekend, will lead to a very unfortunate outcome.

Why are traders so gloomy?

"Clients do not find equity valuations attractive enough to c ...

Facebook's Huge Crowd-Pleaser

The social-networking giant defies law of large numbers, showing benefits of scale.

Credit Suisse: How it Made Money But Still Lost Ground

The Swiss bank turned in a second-quarter profit, but divisions including Asia stumbled.

SABMiller-AB InBev: Don't Bet on a Breakup

The beer has turned cloudy at the bottom of the bottle, but investors should drink to the SABMiller-AB InBev tie-up.

The Tell: The pound could bottom out at $1.20 if the BOE cuts rates next week

A widely expected expansion of monetary stimulus by the Bank of England at its meeting next week likely wouldn't stop the U.K. economy from sliding into a recession, one analyst says.

London Markets: FTSE 100 drops as Shell, Lloyds slump after earnings reports

U.K. blue-chip stocks slide, with Royal Dutch Shell and Lloyds Banking Group pushing lower while the prospect of a U.S. interest-rate hike re-emerged.

Tesla, Mobileye split likely caused by Tesla wanting to go its own way: Morgan Stanley

Tesla Motors Inc. and Mobileye N.V. "divorce" was not surprising, but Mobileye's investors should brace for a shrinking market share and thinner margins for the Israeli company, Morgan Stanley says.

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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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