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20Sep2016 Market Update: US Stock Indexes Off Morning Highs, May See Another Negative Close, Gold And Crude Prices Volatile, US Dollar Remains Strong, Indicators Fractionally Bearish

Written by Gary

Wall Street opened higher as predicted, but rising crude prices put a quick halt to further market advances as the major indexes are slowly retreating toward the unchanged line (SPY + 0.1%). As the afternoon session begins, WTI crude is declining rapidly to where it was yesterday and gold is relatively steady although volatile.


Here is the current market situation from CNN Money

North and South American markets are higher today with shares in Mexico leading the region. The IPC is up 0.83% while Brazil's Bovespa is up 0.57% and U.S.'s S&P 500 is up 0.06%.

The first column is what was reported this morning. The second column is what analysts had forecast and the third column is the previous report. Full calendar HERE.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 64%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 46%
Investors Intelligence sets the breath Above 50 bullish 63%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -19.39
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
80%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 66%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 70%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value

16.72

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 78.42
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,580

What Is Moving the Markets

Here are the headlines moving the markets.

Wells Fargo CEO apologizes for 'unethical' bogus accounts

(Reuters) - The chief executive officer of Wells Fargo & Co on Tuesday apologized for the bank's years-long practice of opening as many as 2 million bogus customer accounts that generated fees for the lender.

Wall Street rises on gains in healthcare stocks

(Reuters) - Wall Street was higher on Tuesday, helped by gains in healthcare stocks, even as investors awaited monetary policy decisions from the U.S. Federal Reserve and the Bank of Japan.

Atlanta Fed downgrades U.S. third-quarter GDP view to 2.9 percent

NEW YORK (Reuters) - The U.S. economy is on track to grow at a 2.9 percent annualized rate in the third quarter, the Atlanta Federal Reserve's GDP Now forecast model showed on Tuesday following the latest data on consumer prices and housing starts.

Fed again poised to cut longer-run interest rate forecast

SAN FRANCISCO/NEW YORK (Reuters) - U.S. Federal Reserve policymakers are set this week to again cut their forecasts for how high interest rates will need to go in an economy where output, productivity and inflation are growing at a slower pace than in past decades.

U.S. housing starts tumble, flooding in the South blamed

WASHINGTON (Reuters) - U.S. housing starts fell more than expected in August likely as bad weather disrupted building activity in the South, but a solid increase in permits for single-family dwellings suggested demand for housing remained intact.

China's OK clears last hurdle for Marriott's deal to buy Starwood

(Reuters) - Chinese antitrust regulators approved Marriott International Inc's deal to buy Starwood Hotels & Resorts Worldwide Inc , clearing the way for the combined company to become the world's largest hotel chain.

Google gets more time to counter EU antitrust charge on Android

BRUSSELS (Reuters) - Alphabet's Google has been given an extra three weeks to respond to EU antitrust charges that it abused its dominant Android mobile operating system to squeeze out rivals, the European Commission said on Tuesday.

Buffett investing deputy Combs joins JPMorgan board

(Reuters) - Todd Combs, one of Warren Buffett's stockpicking deputies at Berkshire Hathaway Inc , has joined the board of JPMorgan Chase & Co , expanding the conglomerate's already deep ties to the financial services industry.

Allergan pays top dollar for 'stepping stones' from neurology to dermatology

(Reuters) - Allergan Plc CEO Brent Saunders calls them "stepping stones" - small, bolt-on acquisitions, as opposed to the mega-deals common in the drug industry. And they're expected to boost dealmaking in sectors ranging from neurology to skin care.

"Why Hillary Lost" - HuffPo Publishes Stunning "Premature Obit" For Hillary Campaign

If Hillary ends up losing in November, The Huffington Post admits that "journalists" in the mainstream media will not be able to bear the thought that it was in any way her fault. The years of endless scandals from Whitewater, through Travelgate, "sniper fire" in Bosnia, Benghazi, deleted emails, pay-for-play at the Clinton Foundation, etc. couldn't possibly be to blame. And certainly, Hillary's "medical episode couldn't be the reason that voters turned on her, right? Lets just ignore this pesky little tracking poll from the LA Times.

Hillary

So, for the fearful mainstream media that is losing sleep over how they're going to explain a Hillary loss, despite their best efforts to protect her, the Huffington Post offers up the following 9 scapegoats:

HuffPo List

We would have thought the Russians would have made the top of the list. Better luck next time. And poor James Comey, after doing everything possible to run interference, like granting immunity to tech guys and dumping FBI reports on the media late on a Friday before Labor Day (nothing to see here), he still gets blamed. Poor guy can't catch a break.

Deutsche Bank's Trading At a Quarter of Book Value and Here's Why

Deutsche Bank is trading at 1/4 its book value. Book value is the measure that the street uses to value banks. Unfortunately, boo value is meaningless for banks today, who's books are no longer marked to market, distorted by negative interest rates and transformed by Harry Potter style accounting. It appears as if the market is not going for it. We, at Veritaseum, never did! Here's an example of why oen should heavily discount DB's book value number. Mortgages are one of the, if not the, biggest loan buckets on DB's balance sheet. Five percent of those mortgages are underwater (guaranteed losses). Seventeen percent are over 70% loan-to-value ration. Well, you may be saying to yourself "That's not bank run material".

The German housing market is on an absolute tear. One could be tempted to say its a bubble, but the German economy is the strongest in all of Europe, right? It's the engine that powers the EU, right? Well, German home prices have handily outgrown, and continue to do so, German wage growth - by a very wide margin. So, if real wages aren't powering these fantastic price gains, then what is???

"Gold Versus ...." - Pre-Fed Positioning

Via Notes From The Rabbit Hole blog,

We are well along in the precious metals correction and have downside targets for gold, silver and the miners. In order for that to be a 'buy', the sector and macro fundamentals will need to be in order. Some of those are represented by the gold ratio charts vs. various assets and markets. Below are two important ones.

Gold vs. Stock Markets has been correcting the big macro change to the upside since leading the entire global market relief phase (potentially out of the grips of global deflation) earlier in the year. A hold of these moving averages, generally speaking, keeps a key gold sector fundamental in play as the implication is that conventional casino patrons are choosing gold over their traditional go-to assets, stocks. A breakdown from the moving averages and it's back to Pallookaville for the gold "community".

Despite gold having topped out (in nominal terms) months ago, the gold vs. stock markets indicators are intact.

gold vs. stock markets

Gold vs. Commodities remains very interesting. The economy is okay (the way Goldilocks likes her porridge, not too hot or cold) and that can keep the currently flat commodity sector stable at least. But with gold's breakdown vs. the two commodity-ish precious metals, silver and palladium, an early indication of a coming inflationary phase is still in play. If the economy holds up, other more positively correlated commodities like industrial metals and oil could get bid vs. gold, signaling a Greenspan era style 'inflation t ...

Multinational Tax Avoidance Crackdown Goes Far Beyond Apple

Unlike the European Commission's battle with Apple, the OECD's clampdown on tax dodging could change the face of corporate taxation.

Diplomacy Is Key if U.K. Finance Is to Travel Without a Passport

There are ways around Brexit for financial firms, but politics needs to help.

GoPro's Drone Will Fly, but Its Cameras Need to Soar

GoPro's new Hero5 cameras need to spark a substantial upgrade cycle—and soon.

August 2016 Residential Building Permit Growth Rate Disappoints

Written by Steven Hansen

The building permits issued are contracting year-over-year, but there are still more building permits being issued than construction completions.

Economic Report: Housing starts skid 5.8% in August

Builders broke ground on fewer homes and applied for fewer permits than expected in August, but with some signs growth may play catch-up later.

Deep Dive: How to buy low and sell really high in the stock market

The Jensen Quality Growth Fund's secret: It rarely sells its holdings, writes Phil van Doorn.

BookWatch: One financial lesson you can learn from Alexander Hamilton

Alexander Hamilton, like so many of us, really only planned for one financial future: the one where he lived a long life and commanded a high income.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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Current Commodity Prices


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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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