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10Oct2016 Market Update: US Indexes Slipping Off Session Highs, US Dollar Showing Strength As Gold Rolls Over, Indicators Mildly Bullish, Investors Concerned About A Market Correction

Written by Gary

Wall Street has backed off the opening highs, the Spooze slipping to R1 (2165) and trading sideways on anemic volume. SPY is currently + 0.6%, WTI crude in the low 52 handle and the US dollar actively testing its resistance (97.00).

Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Mexico leading the region. The IPC is up 1.52% while U.S.'s S&P 500 is up 0.60% and Brazil's Bovespa is up 0.53%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 69%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 51%
Investors Intelligence sets the breath Above 50 bullish 61% 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.

-41.95 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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
73% NYSE Bullish Percent Index ($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

17.36 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 79.74 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,627

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. top court to hear Apple-Samsung feud over iPhone designs

NEW YORK (Reuters) - After five years of litigation, the U.S. Supreme Court will hear arguments on Tuesday in the bitter patent dispute between the world's two top smartphone manufacturers over the amount Samsung should pay Apple for copying the iPhone's distinctive look.

Twitter's shares slump on report that potential bidders lose interest

(Reuters) - Twitter Inc's shares slumped more than 13 percent in early trading on Monday after a weekend Bloomberg report that top potential bidders, including Inc , had lost interest in making a bid for the company.

Fiat Chrysler targets kids though social media to sell minivan

DETROIT (Reuters) - Fiat Chrysler Automobiles, which popularized the minivan three decades ago and remains its top seller, is seeking to stay on top with a social media campaign targeting its new Chrysler Pacifica model directly at the people squabbling in the backseats - American kids.

Deutsche Bank forced into rethink as strategy overhaul stutters: sources

FRANKFURT (Reuters) - Threatened with a multi-billion-dollar fine from U.S. regulators, Deutsche Bank's management is rethinking elements of its year-old strategic overhaul that has made faltering progress, people familiar with the matter said.

Religious investors lose faith in Wells Fargo after scandal

BOSTON(Reuters) - A group of nuns and other religiously-affiliated investors have lost faith in embattled Wells Fargo & Co and filed a shareholder resolution calling on the bank to report on the root causes of a fake accounts scandal that led to a $190 million settlement struck with regulators last month.

Syngenta: ChemChina's bridge financing 'committed and irrevocable'

ZURICH (Reuters) - Bridge financing is "committed and irrevocable" for ChemChina's $43 billion takeover of Syngenta , a spokeswoman for the Swiss chemicals maker said on Monday, following a report on Chinese news outlet Caixin that the acquisition had hit a snag.

Samsung halts Note 7 production after new fire scare: source

SEOUL (Reuters) - Samsung Electronics Co Ltd has suspended production of its flagship Galaxy Note 7 smartphones, a source said on Monday, after reports of fires in replacement devices added to the tech giant's worst ever recall crisis.

Bristol plunges, Merck jumps, on contrasting lung cancer data

(Reuters) - Bristol-Myers Squibb Co shares plunged almost 10 percent after researchers said lung cancer patients fared worse on its Opdivo immunotherapy than those on chemotherapy, while shares of Merck & Co jumped 2 percent on strong benefits shown by its rival drug in a similar late-stage study.

2 Simple Charts Show Which State Pensions Are Most Likely To Enforce Benefit Cuts

A new research note from Moody's found that State pension funds were underfunded by $1.3 trillion at the end of FY15 but was expected to grow to $1.8 trillion at the end of FY17 as pensions continue to struggle with low returns. We've discussed the unintended consequences of the Central Bank's low-rate polices on pension funds multiples times (see "Pension Duration Dilemma - Why Pension Funds Are Driving The Biggest Bond Bubble In History")...with the two most likely outcomes being benefits cuts for pensioners and/or crippling tax hikes for citizens.

Total US state aggregate adjusted net pension liabilities (ANPL) totaled $1.25 trillion, or 119% of revenue in fiscal 2015, Moody's Investors Service says in a new report. The results, based on compliance with new GASB 68 accounting rules, set a new ANPL baseline and are poised to rise for the next two fiscal years as market returns fall below annual targets.

"The median return for public pension plans in FY 2016 was 0.52% compared to an average assumed investment return of 7.5%," Moody's Vice President -- Senior Credit Officer Marcia Van Wagner says. "We project that aggregate state ANPL will grow to $1.75 trillion in FY 2017 audits."

The states with the highest pension burdens -- measured as the largest three-year average ANPL as a percent of state governmental revenue -- were consistent with previous years. Illinois topped the list with pension liabilities at 280% of total governmental revenue, followed by Connecticut (Aa3 negat ...

Carl Icahn Defends Trump, Slams Hypocrisy Of High-Level People "Outraged By Locker Room Talk"

Following an exodus of high-ranking republican Trump supporters over the past 48 hours who have either rescinded their support of the candidate or called for him to step down, Carl Icahn remains a steadfast supporter of Donald Trump, saying that he is amazed by the fake "outrage" by what "everyone knows is going on in every locker room in the country."

In an interview with CNBC, Icahn - who earlier today shut down the iconic casino bearing Trump's name in Atlantic City - said that "over my years I've listened to a lot of salacious talk in locker rooms, bachelor parties etc. by a lot of high-level people, some of whom are now supposedly so outraged," Trump told in a phone interview. "All I can do is refer to that great quote, 'Let he who has not sinned cast the first stone.'"

To be sure, Trump has already apologized for his comments, also using the "locker room" analogy to explain the scenario that led to the remarks.

Icahn continued, slamming the hypocrisy of all those who have express outrage over the past two days: "It's amazing that everyone is outraged by something that everyone knows is going on in every locker room in the country."

Most importantly, Icahn said Trump is the clear candidate for business. "I thought Donald made a number of great points in the debate last night," he said. "Today it is perceived that government is at war with business. This perception must be changed, and it is certainly not being changed by Hillary Clinton.

"It is imperative that many changes in Washington must be made," he said. "I am therefore still obviously still behind Donald Trump."

Which, of course, is the core issue: the last thing Washington, Wall Street, corporate America and the affiliated media, want and would allow is change, which is why Trump's road to the W ...

Carl Icahn Shuts Trump Taj Mahal After 26 Years Of Operation; 3,000 Union Workers Lose Their Jobs

In what may not have been the most opportune time for the presidential candidate, the Atlantic City casino bearing his name - if little else - the Trump Taj Mahal, which Donald Trump opened 26 years ago calling it "the eighth wonder of the world", officially closed today. To be sure, the now defunct structure had no trace of ownership to Trump, and instead was until yesterday owned by Trump's friend and fellow billionaire Carl Icahn, who closed the casino on Monday morning, making it the fifth casualty of Atlantic City's casino crisis. Nearly 3,000 workers lost their jobs, bringing the total jobs lost by Atlantic City casino closings to 11,000 since 2014.

The sprawling Boardwalk casino, with its soaring domes, minarets and towers built to mimic the famed Indian palace, shut down at 5:59 a.m., having failed to reach a deal with its union workers to restore health care and pension benefits that were taken away from them in bankruptcy court.

Picketers affixed an anti-Icahn poster that they had signed to the casino's main Boardwalk entrance door. It proclaimed "We held the line." "We held the line against a billionaire taking from us!" said Marc Scittina, a food service worker at the Taj Mahal's player's club since shortly after it opened in 1990. "This battle has been going on for two years."

Indeed they did, however as a result, they are now unemployed in one of the worst job markets in the US.

The union went on strike July 1, and Icahn decided to shut the place down a little over a month later, determining there was "no path to profitability."

* * *

The Taj Mahal becomes the fifth Atlantic City casino to go out of business since 2014, when four others shu ...

Gold Realizes the Sad Truth... the Fed Screwed Up

The Fed is Officially Screwed.

The Fed has maintained rates too low for too long. Historically any time this has happened we've had an inflationary disaster soon after.

The Fed claims to be data dependent, but if you're talking about inflation data this is a lie.

Core inflation hit the Fed's "target" of 2% back in October 2015. The Fed has hiked rates only once since then. And inflation is rising, NOT falling.

Sticky inflation has been above the Fed's target rate of 2% since mid-2014.

And yet, rates remain at 0.5% with only one rate hike in the last decade. Meanwhile commodities have bottomed from their 2014-2016 shellacking and are now moving sharply higher.

The CRB index is up 21%.

Oil just broke above $50 per barrel.

What happens to the inflation data once it starts picking up on these moves? What happens when the 2014 and 2015 prices are no longer the year over year comparisons and energy prices are up 10% year over year?

Gold is already picking up on it. Once this current correction ends, the precious metal will be clearing $1500 per ounce.

The World Looks Brighter for U.S. Companies

The global economy looks as if it is in for another year of weak growth, but the sales that U.S. companies draw from abroad could get a lot better.

Bond Markets: The Uneven Playing Field Facing Investors

Bond returns have faded from their peaks. Government borrowers have the upper hand.

How Banks Will Struggle With Finance's Long, Slow Decline

Fines and capital-rule changes should soon be wrapped up, but that is just half the battle.

September 2016 Conference Board Employment Index Marginally Improved But Growth Still Weak

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months improved and its authors say "despite the recent declines in corporate profits, employers are not showing any signs of reducing payrolls".

Donald Trump had the answer to that debate question about Obamacare... on his website

A textbook case of not reading the textbook.

Market Extra: Can the rally in Mexico's peso take pressure off the country's central bank?

The resurgent peso is helping Mexico's central bank breath a sigh of relief.

Meet the real face of the student debt crisis

It isn't someone in their 20s with six figures of debt. Of the more than 44 million Americans who share $1.3 trillion in outstanding student debt, nearly 38% have balances below $10,000.

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