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13Sep2016 Market Update: Wall Street Casino Living Up To Its Reputation, Losses High, Volume Moderate, Indicators Bearish, But Recovery Is 50 Percent Possible

Written by Gary

Wall Street has moved off the session lows, but remains in deep losses (SPY -1.3%). The DOW is down over 233 points, $NDX down 45 points, crude prices slipping, US dollar climbing (95.54) and gold is volatile. Best to stay out of this casino for a while.


Here is the current market situation from CNN Money

North and South American markets are sharply lower today with shares in Brazil off the most. The Bovespa is down 2.98% while Mexico's IPC is off 1.48% and U.S.'s S&P 500 is lower by 1.16%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 67%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 36%
Investors Intelligence sets the breath Above 50 bullish 67%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -22
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
84%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 95%
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

17.22

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

78.51

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

10,526

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street slides over 1 percent, led by financials, energy stocks

(Reuters) - U.S. stocks fell more than 1 percent on Tuesday, with energy stocks hit by lower oil prices and financials dropping on diminished prospects of a near-term rate hike.

U.S. sees stronger median household income, less poverty

WASHINGTON (Reuters) - The median U.S. household income rose last year, its first significant annual increase since 2007, and helped push down the number of people living in poverty to 53.1 million, federal government data released on Tuesday showed.

Atlanta Fed's Lockhart to leave office in February 2017

WASHINGTON (Reuters) - Atlanta Federal Reserve Bank president Dennis Lockhart will step down on Feb. 28 next year, the Atlanta Fed said on Tuesday, with a nationwide search planned for his replacement.

Exclusive: Monsanto board close to giving nod to Bayer deal on Tuesday - sources

FRANKFURT/NEW YORK (Reuters) - Monsanto's board is set to meet on Tuesday to decide whether to approve a sale to Germany's Bayer for more than $65 billion after concluding more than four months of negotiations, people familiar with the matter said.

Fed looks unlikely to hike next week after Brainard warning

CHICAGO (Reuters) - The Federal Reserve should avoid removing support for the U.S. economy too quickly, Fed Governor Lael Brainard said on Monday in comments that solidified the view the central bank would leave interest rates unchanged next week.

Investors sue Porsche SE over Volkswagen scandal

FRANKFURT (Reuters) - Porsche SE , the main shareholder of Volkswagen (VW) , is facing lawsuits from investors claiming the firm did not disclose the financial risks of VW's emissions scandal uncovered a year ago.

Sprint, T-Mobile iPhone pre-orders boost Apple shares

(Reuters) - U.S. wireless carriers Sprint Corp and T-Mobile US Inc said on Tuesday they received strong pre-orders for Apple Inc's iPhone 7, sending shares of the world's most valuable listed company up 3 percent.

Exclusive: Goldman team uses retail deposits for Wall Street-style profits

NEW YORK (Reuters) - As Goldman Sachs Group Inc has built its U.S. consumer bank, it has established a team to put its deposits to work on Wall Street, a telling development about Goldman's ambitions for the retail bank.

Short-seller Chanos calls Tesla-SolarCity merger 'crazy': CNBC conference

NEW YORK (Reuters) - The prominent short-seller Jim Chanos, founder of Kynikos Associates, called the proposed merger of Tesla Motors Inc and SolarCity Corp "crazy," noting that the combined company would need constant access to capital markets.

Last Chance For The "Deplorables"

Submitted by Patrick Buchanan via Buchanan.org,

Speaking to 1,000 of the overprivileged at an LGBT fundraiser, where the chairs ponied up $250,000 each and Barbra Streisand sang, Hillary Clinton gave New York's social liberals what they came to hear.

"You could put half of Trump's supporters into what I call the basket of deplorables. Right?" smirked Clinton to cheers and laughter. "The racist, sexist, homophobic, xenophobic, Islamophobic, you name it." They are "irredeemable," but they are "not America."

This was no verbal slip. Clinton had invited the press in to cover the LGBT gala at Cipriani Wall Street where the cheap seats went for $1,200. And she had tried out her new lines earlier on Israeli TV:

"You can take Trump supporters and put them in two baskets." First there are "the deplorables, the racists, and the haters, and the people who ... think somehow he's going to restore an America that no longer exists. So, just eliminate them from your thinking..."

And who might be in the other basket backing Donald Trump?

They are people, said Clinton, "who feel that the government has let them down, the economy has let them down, nobody cares about them. ... These are people we have to understand and empathize with."

In short, Trump's support consists of one-half xenophobes, bigots and racists, and one-half losers we should pity.

And she is running on the slogan "Stronger Together" . . .

JPM Explains Why everything Is Dumping: "The Market Has A BOJ Problem", VaR Shock Returns

Last Thursday, in "Brace For "VaR Shock" - How The Bank Of Japan May Be About To Unleash A Global Selloff" we explained that the catalyst for the next market crash may be an unexpected one: the Bank of Japan and its clueless, "Peter Panish" head Haruhiko Kuroda. We urge readers to reread the article, because moments ago JPM's trading desk admitted that the reason for Friday's selloff was not fears about the Fed, and not the Lael Brainard "hawkish turn" risk, as the "dovish Brainard" Monday gains have been wiped out today, but, drumroll, the Bank of Japan.

This is what JPM's Adam Crisafulli sent out moments ago:

"the SPX is giving back the entire Mon rally due to ongoing yield anxiety ahead of the 9/21 BOJ meeting. The market never had a Fed problem but it does face a BOJ one and unfortunately clarity on Japanese monetary policy won't come for another week (the comprehensive assessment is 9/21, the same day as the FOMC decision)."

Just as importantly, because it is carbon-copy of what we said last week, Crisafulli writes that "JGBs are driving sovereign yields at the moment and until the next stage of BOJ policy is known anxiety levels will remain elevated (even though sovereign 10yr yields are pretty flat so far Tues)."

There is little else:

"other than this issue there isn't much else to talk about and that is another headwind (the death of news is helping yield-driven fears to propagate uncontested). In addition to the focus on yields and multiples, the contours of the US presidential race shifted mat ...

Bridgewater's Ray Dalio: "Only So Much You Can Squeeze Out Of A Debt Cycle... We Are There!"

Confirming his previous op-ed, the founder of the world's largest hedge fund warned that the current environment is analogous to the 1935 to 1945 period in America...

We have "reached the limits" of [central banks] "ability to stimulate" the economy " and raise global asset prices."

Three simple minutes of painful reality from the world's biggest hedge fund manager... "it's probably nothing"

As Dalio states,

"there's only so much you can squeeze out of a debt cycle... we are there... you can't lower interest rates materially, and you are also at the limit on QE (because spreads are limited)."

"Globally, those forces that were behind us are no longer there... we are at the end of a debt cycle... and everybody will have a lower growth rate than we are used to."

As Dalio previously concluded in his Op-Ed: he admits that QE has reached its limits...

The Only Conspiracy Theory About Hillary Clinton's Health Is That There's Nothing Wrong With It

By Sean Davis via The Federalist

The only completely ludicrous conspiracy theory about Hillary Clinton's health is that there's nothing wrong with it.

Hillary Clinton's campaign has a problem. A truth problem, to be specific. No, not the problem of being completely incapable of ever telling the truth, although that is a problem. The truth problem I'm talking about is the Clinton campaign's inability to tell believable lies.
"But why not just ask the Clinton campaign to tell the truth?" you might ask. "Wouldn't that be easier?"
Maybe. But these are the Clintons. If you're a Clinton, you lie. It's what you do. Expecting them to not lie is a fool's errand. But given the amount of time the Clintons have spent in politics lying to the public-somewhere in the neighborhood of three decades-they really ought to be better at it by now.

For those who've been living under a rock, people have been asking questions about the aging Democratic nominee's health ever since a potentially life-threatening blood clot near her brain was discovered after the former Secretary of State suffered a serious concussion that sidelined her for several weeks. According to the Federal Bureau of Investigation, Clinton blamed that concu ...

Why Bolt's Range Is a Buzz Kill for Tesla Bulls

The Chevrolet Bolt's competitive range gives Tesla reason to sweat in the electric-car race.

Why Growth-Starved Investors Will Jump Into Nets

Financial technology isn't always exciting, but stocks with future promise are few and far between.

The Wall Street Journal: Wells Fargo CEO says bad employees were behind scandal over unsolicited accounts

CEO John Stumpf says: ' There was no incentive to do bad things.'

Capitol Report: Would Fed make titanic mistake by raising rates? Here's an argument that says yes

There's nothing "normal" about the U.S. economy and efforts by the Federal Reserve to revert to normal interest-rate policy could do more harm than good, says a Wall Street economist who's consistently predicted the slow recovery.

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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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