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26Sep2016 Market Update: US Stock Indexes Lower, May Reach One Percentage Lower Before Close, Indicators Bearish

Written by Gary

Wall Street is generally lower after a failed attempt to climb into the positive side of things. After reaching the unchanged line the major indexes slid to new session lows and are threatening to fall further (SPY - 0.8%). Indicators are fractionally bearish, WTI crude prices touching the 46 handle, gold higher (1344) and the US dollar melting lower.


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) 61%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 44%
Investors Intelligence sets the breath Above 50 bullish

64%

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.

+13.96

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. 67%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 15.82
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 78.83
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,564

What Is Moving the Markets

Here are the headlines moving the markets.

Oil up 4 percent as OPEC meets, volatility hits post-Doha high

NEW YORK/LONDON (Reuters) - Oil jumped nearly 4 percent on Monday as the world's largest producers gathered in Algeria to discuss ways to support prices, with nervous trade driving volatility to its highest since a similar meeting to freeze output in April in Doha which failed.

Pfizer, banks lead Wall Street lower; presidential debate eyed

(Reuters) - Losses on Wall Street deepened in volatile trading on Monday, as Pfizer led a decline in healthcare stocks and Deutsche Bank pulled financials down, with investors awaiting the first U.S. presidential debate between Hillary Clinton and Donald Trump.

Iran downplays chances of oil deal, UAE keen on freeze

ALGIERS (Reuters) - Iran downplayed on Monday the chances of OPEC and non-OPEC oil producers clinching an output-restraint deal in Algeria this week even though several other members of the group said they still hoped for steps to tackle a price-eroding glut of crude.

U.S. new home sales fall in August but trend still positive

WASHINGTON (Reuters) - New U.S. single-family home sales posted their biggest decline in nearly a year in August after soaring to nine-year highs the month before, with analysts saying the trend in sales remains positive.

Deutsche Bank says no need for Berlin's help in $14 billion U.S. dispute

FRANKFURT/BERLIN (Reuters) - Deutsche Bank said on Monday it had no need for German government help with a $14 billion U.S. demand to settle claims it missold mortgage-backed securities, as its shares hit a record low.

Fed will seek more capital from largest U.S. banks: Tarullo

WASHINGTON (Reuters) - The Federal Reserve will seek significantly more capital from the largest U.S. banks and give some relief to smaller banks as it considers reforms to its annual 'stress test,' Fed Governor Daniel Tarullo said on Monday.

Support for Wells Fargo CEO Stumpf 'now wavering': CLSA

(Reuters) - CLSA analyst Mike Mayo said his support for Wells Fargo & Co Chief Executive John Stumpf was "wavering" following problematic sales tactics that has brought him under fire from U.S. lawmakers.

Senator Warner seeks SEC probe of Yahoo disclosure on hacking

WASHINGTON (Reuters) - Democratic Senator Mark Warner on Monday asked the U.S. Securities and Exchange Commission to investigate whether Yahoo and its senior executives fulfilled obligations to inform investors and the public about a hacking attack affecting 500 million user accounts.

Exclusive: Viacom readies $1 billion bond offering - sources

NEW YORK (IFR) - Viacom Inc is preparing to go to market this week with a bond offering that is expected to total $1 billion, part of the struggling media company's plan to boost liquidity, three sources told Reuters.

US Bank Stocks Slide After New Fed Tests Suggest Need For "Significant Increase In Capital"

Two weeks after European and Japanese banks threatened mutiny against new banking capital requirements set forth by the Basel Committee, Bloomberg reports that Wall Street would have to come up with billions of dollars in additional capital in a proposed revamp of the Fed's stress tests. US bank stocks are sliding on the news, falling back to the reality of lower and flatter yield curves as well as systemic threats from Deutsche Bank.

The European banking system is in trouble. Despite stocks relatively sober reaction, Sub CDS are exploding higher...

William Coen, secretary general of the Basel Committee, told reporters on Sept. 13 that the regulator's goal is not to drive capital requirements higher as it finishes up Basel III.

"If we wanted to increase capital, that would be far easier than what we're doing at present," Coen said.

"We're doing this work to reduce risk-weighted asset variability. And why are we doing that? To restore confidence in the risk-weighted capital ratios and to fully restore credibility to the capital adequacy framework."

And now the US banking system is seeing threats mount systemically and The Fed warns its new stress tests "would generally result in a significant increase in capital requirements"...(as Bloomberg reports)

...

BofA Fined $12.5 Million For Creating At Least 15 Mini "Flash Crashes"

One of our recurring activities over the past few years was, in collaboration with Nanex, to point out the countless mini-flash crashes that take place almost on a daily basis across the equity market. Although not as dramatic as the far more popular major flash crashes of May 2010 or August 2015, these recurring events merely served to underscore just how broken and fragment the market plagued by HFTs has become.

And while the HFT lobby was quick to point out that mini flash crashes do not really take place and it is all just a fabrication by the "anti-HFT crusaders", moments ago the SEC validated our previous observations, when it announced that Merrill Lynch has agreed to pay a $12.5 million penalty for unleashing at least 15 mini flash crashes between 2012 and 2014, as a result of maintaining "ineffective trading controls that failed to prevent erroneous orders from being sent to the markets."

An SEC investigation found that Merrill Lynch caused market disruptions on at least 15 occasions from late 2012 to mid-2014 and violated the Market Access Rule because its internal controls in place to prevent erroneous trading orders were set at levels so high that it rendered them ineffective. For example, Merrill Lynch applied a limit of 5 million shares per order for one stock that only traded around 79,000 shares per day. Other trading strategies had limits set as high as 25 million shares, which Merrill Lynch reduced to 50,000 shares after the SEC's investigation began.

According to the SEC's order instituting a settled administrative proceeding, the erroneous orders that pass ...

Saudi Arabia Bails Out Banking System After Interbank Rates Hit 2009 Highs

Amid what some might call self-inflicted economic collapse, Saudi Arablia has announced a $5.3 billion bailout of its banking system as interbank borrowing rates near the highest since Lehman. In what the supposedly central bank calls "supportive monetary policy...on behalf of government entities," is easing liquidity constraints with 28-day repo agreements and is the second liquidty injection this year.

While Saudi default risk has fallen - as the entire world has been liquified in recent months - it remains worse than Mexico, Russia, and South Africa.

As Bloomberg reports, The Saudi Arabian Monetary Agency, as the central bank is known, is giving banks about 20 billion riyals ($5.3 billion) of time deposits "on behalf of government entities." It's also introducing seven-day and 28-day repurchase agreements, as part of its "supportive monetary policy." It didn't provide further details.

The announcement, which comes as the kingdom prepares for its first international bond sale, is the latest step by the central bank to ease a cash crunch in the banking system. The Saudi Interbank Offered Rate, a key benchmark for pricing loans, has surged to the highest in seven years after the plunge in oil prices forced the government to withdraw money from the country's banki ...

Why The Deep State Is Dumping Hillary

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

The governed are ready for a period of retrenchment, consolidation and diplomatic solutions to unwinnable conflicts, as imperfect as the peace might be to hawks.

Are you open to a somewhat unconventional perspective on this election? If so, read on. If you're absolutely confident you know all there is know about this election (good vs evil, Democrat vs. Republican, etc.), well then let's compare notes in five years and see which context provided more insight into the future.

In the context presented here, the personalities of the two candidates matter less than their perceived role in the changing of the Imperial Order. Let's start with a quick overview of the relationships between each political party and the Deep State--the unelected power centers of the central government that continue on regardless of which person or party is in elected office.

Liberal Democrats have always been uneasy bedfellows with the Deep State. Republican President Eisenhower had the political and military gravitas to put limits on the Military-Industrial wing of the Deep State, so much so that Democratic candidate John F. Kennedy claimed the U.S. had fallen behind the U.S.S.R. militarily in the 1960 presidential election (the infamous "missile gap").

Eisenhower was a cautious Cold War leader, wary of hot wars, wars of conquest, and the inevitable burden of conquest, nation-building. The military was best left sheathed in his view, and careful diplomacy was sufficient to pursue America's interests.

Kennedy entered office as a foreign policy hawk who was going to out-hawk the cautious Republicans. A brush with C.I.A. cowboys (the failed Bay of Pigs invasion of Cu ...

More Than Money at Stake in Tesla's SolarCity Deal

Weighing Tesla's merger offer for SolarCity means separating what can and can't be measured.

Japanese Banks: New Policy, Same Old Pain

With profitability withering away, Japanese banks may need a lot more help than the central bank is willing to give.

Another $10 Billion Hong Kong Stock Market Mystery

Property developer Fullshare is the latest hard-to-explain Hong Kong highflier.

Capitol Report: On eve of debate, Trump pulls ahead in a national poll, lags in another

On the eve of their head-to-head debate, Donald Trump has pulled ahead of Hillary Clinton in one national poll.

Obama power-plant emissions rule faces key test in court

The Obama administration's power-plant emissions rule faces a courtroom showdown this week, and the outcome could have big repercussions for Washington's ability to meet its promises under a landmark climate-change accord.

Economic Report: New-home sales were second-highest since recession after falling in August

Sales of new homes ran at a 609,000 annual pace in August, better than expected, as outsize demand continues and prices ease enough for more people to buy.

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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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