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19Aug2016 Market Update: Major US Indexes Moderately Lower, Crude Steady, US Dollar Melts Up, Some Volatility As A Select Group Of Investors Place Bets At The Wall Street Casino

Written by Gary

US markets are down and volatile (DOW - 56 points), pulled down by energy stocks as oil prices remained high, while the Nasdaq was little changed as Applied Materials boost technology stocks. Investors remain worried about whether the Federal Reserve will raise interest rates as early as September. Crude remains at higher levels as profit taking prevents moving higher.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Mexico off the most. The IPC is down 0.31% while U.S.'s S&P 500 is off 0.26% and Brazil's Bovespa is lower by 0.23%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 72%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 78%
Investors Intelligence sets the breath Above 50 bullish 67%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -4.97
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
87%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 71%
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 15.36
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 81.45
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,863

What Is Moving the Markets

Here are the headlines moving the markets.

Oil drags on Dow, S&P; Nasdaq boosted by Applied Materials

(Reuters) - The Dow Jones and S&P 500 were lower on Friday afternoon, pulled down by energy stocks as oil prices dropped, while the Nasdaq was little changed as Applied Materials boost technology stocks.

Viacom and controlling shareholder Sumner Redstone agree on settlement: sources

NEW YORK (Reuters) - - Viacom Inc and controlling shareholder Sumner Redstone have come to an agreement on terms of a settlement that would result in the departure of Chief Executive Philippe Dauman, two sources familiar with the situation told Reuters on Thursday.

Pokemon Go spurs lifestyle changes, business boom as it rolls out in Asia

JAKARTA (Reuters) - Asian fans of smartphone game Pokemon Go are hunting out the best telecom providers and network gear to overcome the hurdle posed by patchy network signals in their race to capture virtual cartoon characters.

Goldman seeks to force ex-employee in Fed leak case to arbitrate

NEW YORK (Reuters) - Goldman Sachs Group Inc filed a lawsuit on Thursday seeking to force a former managing director to arbitrate his claim for legal fees stemming from probes into his alleged use of confidential Federal Reserve documents.

Monte dei Paschi CEO says he acted correctly after news of probe

MILAN (Reuters) - The chief executive of Monte dei Paschi di Siena said on Friday he acted correctly and was confident the situation would rapidly be clarified, following news of a probe for alleged false accounting and market manipulation.

Fed guessing game moves up a gear as Yellen takes stage

MADRID (Reuters) - Will they or won't they? The debate over whether the U.S. Federal Reserve is readying an interest rate hike will get its umpteenth airing over the coming week, with all eyes on Chair Janet Yellen to provide some clarity.

Fed's Williams says September rate hike makes sense

ANCHORAGE (Reuters) - San Francisco Federal Reserve Bank President John Williams on Thursday joined a growing chorus of his colleagues signaling support for a U.S. interest rate hike in coming months, saying that waiting too long could be costly for the economy.

U.S. judge rejects Uber's driver expenses settlement

SAN FRANCISCO (Reuters) - A U.S. judge on Thursday rejected an attempt by Uber Technologies Inc to settle a class action lawsuit with drivers who claimed they were employees and entitled to expenses.

Eddie Bauer says malware used to access payment card data

(Reuters) - Retailer Eddie Bauer LLC said on Thursday customers' payment card information used at its stores may have been accessed by unauthorized parties.

Don't Count Yer Clintons Yet - It Ain't Over Till It's Over

Submitted by Patrick Buchanan via Buchanan.org,

"I did it my way," crooned Sinatra.

Donald Trump is echoing Ol' Blue Eyes with the latest additions to his staff. Should he lose, he prefers to go down to defeat as Donald Trump, and not as some synthetic creation of campaign consultants.

"I am who I am," Trump told a Wisconsin TV station, "It's me. I don't want to change. ... I don't want to pivot. ... If you start pivoting, you are not being honest with people."

The remarks recall the San Francisco Cow Palace where an astonished Republican, on hearing the candidate speak out in favor of "extremism in the defense of liberty," blurted out, "My God, he's going to run as Barry Goldwater!"

And so he did. And Goldwater is remembered and revered by many who have long forgotten all the trimmers of both parties who tailored their convictions to suit the times, and lost.

Trump believes populism and nationalism are the future of America, and wants to keep saying so. Nor is this stance inconsistent with recapturing the ground lost in the weeks since he was running even with Hillary Clinton.

The twin imperatives for the Trump campaign are simple ones.

They must recreate in the public mind that Hillary Clinton who 56 percent of the nation thought should have been indicted for lying in the server scandal, and who two-thirds of the nation said was dishonest or untrustworthy.

Second, Trump must convince the country, as he had almost done by Cleveland, that he is an acceptable, indeed, a preferable alternative.

Putin Flies Into Crimea As Ukraine "Prepares For An Invasion"

At the same time that Russia is condicting its latest massive military drill on the border with Ukraine, and one day after the latest stark warning by Ukraine' president Poroshenko that the simmering conflict with Russia may be set to explode again when he said on national TV that "the probability of escalation and conflict remains very significant" adding that "we don't rule out full-scale Russian invasion", Russian president Putin made a not so subtle point that Crimea will not be relinquished when he flew into contested territory on Friday, one day after staging war games there, and said he hoped Ukraine would see "common sense" when it came to resolving a diplomatic crisis over the peninsula.

Officially, Putin arrived on a working visit in Crimea, where he held a briefing with members of the Russian Security Council and visited the Tavrida international youth forum, a RIA Novosti correspondent reported Friday. The schedule of Putin's visit to Crimea, at least his fifth in the past two years, also involves meetings with local officials, according to local media reports that broke news of the visit this week.


Putin chairs a meeting with permanent members of the Russian Security Council
at the Belbek airport near the Black sea port of Sevastopol, Crimea.

Crimea, which has been the topic of contention since early 2014, became a part of Russia after almost 97 percent of those who voted in a loc ...

What The Fed Hasn't Fixed (And Actually Made Worse)

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

The Fed has not only failed to fix what's broken in the U.S. economy--it has actively made those problems worse.

The Federal Reserve claims its monetary interventions saved America from economic ruin in 2009, and have bolstered growth ever since. Don't hurt yourself patting your own backs, Fed governors past and present: it's bad enough that the Fed can't fix the economy's real problems--its policies actively make them worse.

After seven long years of politicos and the financial media glorifying the Federal Reserve's policies as god-like in their power and efficacy, let's take a quick look at the results of these vaunted policies: ZIRP (zero interest rates), (QE) quantitative easing, both of which are ways of shoving nearly-free money ( a.k.a. liquidity) into the banking sector, where all this free money is supposed to filter into the global economy, working miracles of prosperity.

The stated goal of the Fed's zero-interest rate policy (ZIRP) and quantitative easing (QE) was to make borrowing easier for both corporations and consumers, the idea being that companies would borrow to invest in new productive capacity and consumers would buy the new goods and services being produced with the Fed's cheap credit.

The secondary publicly stated goal was to spark a rally in stocks, bonds and real estate that would spark a wealth effect: as households saw their net worth rise, they would feel wealthier and thus more likely to borrow money to buy more goods and services.

Let's start by stipulating that the Fed's policies are unprecedented. Keeping interest rates near-zero for over seven years and pumping up its balance sheet f ...

These Are The Top 50 Hedge Fund Long And Short Positions

Nobody has "suffered" more under central planning than billionaire hedge fund managers, and as 2016 went on, the suffering continued.

It is no secret to regular readers that over the past decade, hedge funds have not only underperformed the market, but have failed to generate "alpha" since 2011.

As we have shown year after year, the centrally-planned "New Paranormal" has been a total disaster for traditional alpha generation, since with all traditional fundamental relationships flipped upside down thanks to the Fed, the only way to generate outsized returns for one's investors (and one's offshore bank account) is to be massively levered beta, or merely wrong.

Unfortunately for the 2 and 20 crowd, in the second quarter this distressing trend continued, with Goldman's latest Hedge Fund Trend Monitor reporting that in 2016, the hedge fund industry generated a 3% return, underperforming the broader market's 9% YTD return. Worse, the average equity long/short fund and Goldman's own VIP basket have each returned just 2% YTD, both lagging the S&P 500 substantially.

As Goldman's Ben Snider points out, "even with the recent rally in the most popular long positions, the average hedge fund has returned just 3% YTD, lagging the S&P 500 for the eighth year in a row. Many active managers continue to struggle in 2016, with the average large-cap core mutual fund also lagging the S&P 500. Among hedge fund styles, although most have posted similar returns, event-driven funds have fared best (+5%) while equity long/short funds trail (+2%)."

The Profit and Peril of Cancer Drugs

Cancer drugs have rightly generated significant investor excitement, but picking winners will be challenging.

Oil Market Boost May Come from Venezuela, Not Algeria

The oil market has rallied in part due to optimism about an output freeze that could be agreed on next month in Algeria, but Venezuela's descent into chaos may be the most bullish development for prices.

Chinese Bank Shows How To Move Risks Around

As Chinese banks' funding and profitability increasingly comes from less secure places, investors should tread carefully.

Capitol Report: The central bank that cried wolf? Talk of higher U.S. interest rates is often just that

Just words? The Federal Reserve has been on the cusp of rate hikes several times since 2013 — recall the famous taper tantrum — and it seemed on the verge of acting just last spring before backing off.

Beer Goggles: Why yeast is craft beer's 'God particle'

Oregon's David Logsdon spent years discovering, and refining, beer brewer's magic ingredient, writes Jason Notte.

Market Snapshot: Stocks stumble lower as Fed rate-hike debate rages

U.S. stocks on Friday were trading off their lowest levels of the session, but were still in the red as investors worried about whether the Federal Reserve will raise interest rates as early as September.

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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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