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07Oct2016 Market Update: Wall Street Slips Lower Along With Crude Prices, Indicators Moderately Bearish, Investors Watching For Volatility

Written by Gary

US major indexes are trading near the session lows (SPY -0.6%). The blue-chip Dow is down -0.6%, the S&P 500 has fallen -0.7%, while the tech-heavy Nasdaq 100 has retreated 0.6%. WTI crude has slipped down -1.5% from this morning and gold has returned to the 1253 area after very wide swings.

Here is the current market situation from CNN Money

North and South American markets are mixed. The Bovespa is higher by 2.54%, while the IPC is leading the S&P 500 lower. They are down 0.89% and 0.60% respectively.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 64%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 51%
Investors Intelligence sets the breath Above 50 bullish 62% 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.

-23.54 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)

75% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 65% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 67% 10 Year Treasury Note Yield Index ($TNX) ten year note index value

17.46 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 79.57 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,588

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. job growth slows, clouds case for Fed rate hike

WASHINGTON (Reuters) - U.S. employment growth unexpectedly slowed for the third straight month in September and the jobless rate rose, which could make the Federal Reserve more cautious about raising interest rates.

Fed's Fischer says jobs number close to Goldilocks ideal

WASHINGTON (Reuters) - Friday's jobs number was close to an ideal "Goldilocks" reading that showed the economy motoring ahead but not too fast to pose risks, Federal Reserve vice chair Stanley Fischer said on Friday.

Wall Street lower after jobs data keeps rate hike on track

(Reuters) - U.S. stocks fell on Friday after weaker-than-expected September jobs report had little effect on the prospects of an interest rate hike by the year end.

VW recalls 281,500 Volkswagen, Audi vehicles in U.S. due to fuel leaks

DETROIT (Reuters) - Volkswagen AG is recalling about 281,500 Volkswagen and Audi brand vehicles in the United States in three separate recalls, each due to fuel leaks but with different causes, according to a regulatory filing on Friday.

Delta CEO says summer traffic was its best summer ever

NEW YORK (Reuters) - Delta Air Lines this year carried the most passengers in a summer ever, despite a computer outage in August, Chief Executive Officer Ed Bastian said on Friday.

Netflix CEO says China entry 'doesn't look good'

(Reuters) - Video streaming service Netflix Inc's Chief Executive Reed Hastings said the likelihood of the company entering the Chinese market "doesn't look good".

U.S. court reinstates Apple win over Samsung in patent case

NEW YORK (Reuters) - A federal appeals court on Friday reinstated a $120 million jury award for Apple Inc against Samsung , in another stunning twist in the fierce patent war between the world's top smartphone manufacturers.

'Flash crash' hits sterling; U.S. jobs data weaken dollar

NEW YORK (Reuters) - Sterling tripped lower on Friday on what traders called a "flash crash" that knocked the currency to a 31-year low, while the dollar slipped on news of unexpectedly weak U.S. job growth in September.

Deutsche Bank gets support from top investor, CEO in talks with banks

DOHA/FRANKFURT (Reuters) - Deutsche Bank has secured support from its largest shareholder and more German lawmakers as it grapples with a confidence crisis following U.S. authorities' demands for up to $14 billion to settle allegations it mis-sold mortgage-backed securities.

New Mega Oil Discovery In Alaska Could Reverse 3 Decades Of Decline

Submitted by Nick Cunningham via,

A small company just announced that it has made a "world-class" oil discovery in Alaska, which could be the largest find in the state in years.

Caelus Energy LLC, a small company backed by private equity, says that it has discovered oil on Alaska's northern coast. The field could hold as much as 6 billion barrels of oil, with about 1.8 to 2.4 billion barrels considered to be recoverable. If that is the case, the discovery would instantly raise Alaska's statewide recoverable oil reserve base by about 80 percent.

But producing the oil will not be easy. Drilling must take place in the winter. To drill the field, the tentative plan would be to build manmade islands to drill through. Oil produced in the shallow water of Smith Bay will need to be moved somehow. Caelus will have to build an $800 million pipeline that travels 125 miles, connecting to an existing pipeline system in Prudhoe Bay.

"It's a really exciting discovery for us, and we think it's really exciting for the state of Alaska," Caelus CEO Jim Musselman said in a phone interview with Bloomberg. "They need a shot in the arm now."

"It is not going to be easy, but we've had projects like this around the world," Musselman told The Wall Street Journal. He formerly led Kosmos Energy when ...

As Central Bankers Spin

As Central Bankers Spin Posted with permission and written by Tim Taschler, Sprott Global

I know that I resemble the old guy in this cartoon, standing by helplessly as I watch central bankers experiment with the global economy. Bubbles are blown, again, in several asset classes. Negative interest rates have become an acceptable concept, as if they are just words and have no real economic meaning. Stock markets trade based on the next set of words from a central banker, regardless of how wrong these people have been, for almost a decade, on their 'predictions' and dot plots of the future. There is a Stephen King novel in the making here, something about the horrors of the people that created a gigantic problem also being the people in charge of fixing the problem they created, as ...

Rumor Of Qatar Investment In Deutsche Bank Denied; Speculation Of A $1.2 Billion Margin Call Remains

Update: and rejected


And scene.

* * *

Last Friday a fake Deutsche Bank headline saved the market. Can they do it again? It appears that just like a certain Saudi prince took a bath in Citi sevearl years ago, a greater fool has been found again, according to Spiegel:


Remember when Korea's SWF was going to take a stake in Lehman?

For now it's working...

Although it may not last long. First, the story is 4 hours old..

Qatari investors who own the largest stake in Deutsche Bank do not plan to sell their shares and could consider buying more if the embattled German bank decides to raise capital, sources familiar with Qata ...

Oil Slides Below $50 After Gartman Turns Bullish

Having declared back in January that "we won't see crude above $44 again in my lifetime"...

... only to watch crude surge above $44 and far higher just three months later - while mysteriously staying alive - "commodity guru" Dennis Gartman failed to learn his lesson, and appearing on CNBC one month ago he again made one of his bombastic forecasts, saying "investors shouldn't expect the commodity to break through $55 for a few years."

While that may or may not happen, an amusing twist, literally, took place for the momentum-chasing retirement account manager overnight, who observing the surge in crude in the past few days, found himself unable to resist and made the following recommendation:

WTI CRUDE OIL: The Trend Line's Been Broken and The Term Structure's Bullish: Supply has never been a problem; there is plenty of... indeed an increasing supply of... crude; the problem is with demand. But the contangos are narrowing and the trend line's been broken and any correction over the next week or two back to this trend line is to be bought.

What happened next? This:


Brexit Turns Ugly for Pound, Gilts

The pound is tumbling and U.K. government bond yields are rising. Political risk is arriving in style.

The Job Market: Any Which Way But Tight

The way the job market continues to draw in new workers suggests the Federal Reserve has little to worry about on the inflation front.

Stacking More Chips on KLA-Tencor

Despite losing its merger partner Lam Research, KLA-Tencor's prospects look good.

Market Extra: Mysterious pound plunge pressures Bank of England to tighten policy

The mystery flash crash in the pound Friday morning completely rattled investors and the shock slump is now also seen as changing Bank of England policy.

'Hamilton' duels with my Vitamix blender to settle the stuff vs. experience debate

Faced with a choice between purchasing an object or an experience, most people will choose the material item in the belief that it will last longer. They're likely wrong.

Economic Report: 'Goldilocks is real': September payrolls reactions

Economists' comments on September's nonfarm payrolls report, which showed 156,000 jobs created in the month and the unemployment rate rising to 5% from 4.9%.

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