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25Oct2016 Market Update: Consumer Confidence Falls Below 100, WTI Crude Falls To 49, US Dollar Falls From 99 And Gold Rises To 1274

Written by Gary

Disappointing corporate results from several heavyweights dragged Wall Street down (SPY -0.3%) as investors looked for clues regarding the timing of the next interest rate hike ahead of a Fed meeting next week. Home prices in 20 major U.S. metro areas rose 0.4%, Crude prices fall along with the US dollar.


Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.82% while Mexico's IPC is off 0.50% and U.S.'s S&P 500 is lower by 0.32%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 72%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 47%
Investors Intelligence sets the breath Above 50 bullish 59%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +4.64
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
72%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 61%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 60%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 17.56
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 79.34
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,550

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. falls as earnings from some big names disappoint

(Reuters) - Disappointing corporate results from several heavyweights dragged Wall Street as investors looked for clues regarding the timing of the next interest rate hike ahead of a Fed meeting next week.

U.S. judge approves $14.7 billion settlement over VW diesel vehicles

WASHINGTON (Reuters) - A U.S. federal judge on Tuesday approved Volkswagen AG's record-setting $14.7 billion settlement with regulators and owners of 475,000 polluting diesel vehicles, and the German automaker said it would begin buying back the vehicles in mid-November.

General Motors beats earnings expectations, investor fears linger

DETROIT (Reuters) - General Motors Co shares fell over 3 percent on Tuesday despite better-than-expected third-quarter results amid fears that a slowdown in U.S. vehicle sales and currency turmoil in Europe will undercut future profits.

EU proposes common tax rules to close avoidance loopholes

LONDON (Reuters) - Multinational companies would have to calculate their tax liabilities according to one set of rules across the European Union under proposals on Tuesday aimed at stopping them shifting profits to avoid taxes.

Wallonia premier says region not opposed to EU-Canada free trade deal

PARIS (Reuters) - Wallonia premier Paul Magnette said the Belgian region was not opposed to a planned EU-Canada free trade deal in itself but that an arbitration scheme needed to be dropped and public services protected.

Airport staff involved in Total CEO plane crash had been drinking: regulator

MOSCOW (Reuters) - Two Moscow airport workers involved in a plane crash in which Christophe de Margerie, the CEO of Total, was killed had been drinking alcohol, Russia's aviation regulator said on Tuesday, saying the accident could have been avoided altogether.

U.S. locks in duties on certain Indian steel pipes

WASHINGTON (Reuters) - The U.S. International Trade Commission on Tuesday voted to lock in duties on imports of welded stainless pressure pipe from India as it affirmed the goods were harming the U.S. industry.

Swiss give U.S. $51 million in frozen assets in PDVSA investigation

ZURICH (Reuters) - Switzerland has given around $51 million in formerly frozen assets to the United States in connection with a U.S. investigation into alleged corruption at oil company Petroleos de Venezuela S.A. (PDVSA), authorities said on Tuesday.

Lockheed Martin's quarterly profit handily beats estimates

(Reuters) - Lockheed Martin Corp , Pentagon's No. 1 weapons supplier, reported a quarterly profit that handily beat analysts' expectations, as sales of its Sikorsky helicopters pushed total revenue up 14.8 percent.

Austria Sells 2 Billion In 70 Year Bonds, Pushes Global Duration Risk To Record High

The latest evidence of the unprecedented scramble for yield and duration came yesterday when it was revealed that Austria would join the rest of the Eurozone in selling ultra-long dated debt in the form of 70 Year bonds. It didn't take long to find willing buyers, and moments ago Bloomberg reported that this latest offering priced without a hitch when Austria sold 2 billion euros of bonds due in November 2086.

The 70-year bond was priced to yield 53 bps more than that on the February 2047 security. At the same time, the Treasury in Vienna also sold 3 billion euros of notes maturing in July 2023.

Austria's 30-year bund yields fell two basis points, or 0.02 percentage point, to 0.99%, but hardly a notable selloff. The 1.5% security due in February 2047 rose 0.592 to 113.419. The yield on bonds maturing in January 2062, the nation's longest-dated outstanding debt, dropped two basis points to 1.17%.

The sale follows this year's century bond offerings from Belgium and Ireland, as well as 50-year deals from France, Italy and Spain, as Europe's nations take advantage of the ECB's negative interest rate policy which has pushed interest rates to record low yields. The 100-year bond sales by Belgium and Ireland were private placements for 100 million euros each.

Quoted by Bloomberg, Martin van Vliet, a senior interest-rate strategist at ING Bank NV in Amsterdam said that "many issuers have been extending the average maturity of their funding. It makes sense for them to try and lock in low funding costs for a long time. On the demand side, there are still many buyers out there like pension funds and insurance companies that want to buy these bonds for hedging purpose ...

Never Invest In These HORRIBLE Things. Ever!

By Chris at www.CapitalistExploits.at

A reader asked me some time back what I thought about a particular ETF. I told him I often hate ETFs and promised to provide a more detailed explanation as to why some day. Today is that day.

ETFs which simply hold equities or bonds are mostly fine.

ETFs with derivatives as their underlying collateral decay by design. Bad!

And ETFs with futures as an underlying that are leveraged will all go to zero. It's a mathematic certainty, as reliable as knowing James Bond will always make it out alive even if along the way the villains throw a few monkey wrenches in the way.

If you are looking to invest for the long term, levered ETFs will be as successful for you as you would be trying to cut off your thumbs with a wooden spoon.

In fact, if your time horizon is long enough shorting leveraged ETFs is quite possibly the most certain investment you can probably make in this lifetime. Like Bond you'll absolutely make it out alive and win. The script is already written in the math.

That's the short version. If you don't care about why stop reading now but etch the above into your mind and you'll save yourself a lot of money and pain.

For everyone else here's why.

Contango and Roll Decay

Contango is just a fancy name for when the spot price is lower than the future price.

Contango is also a very "normal" market, one which central bankers are incidentally doing their damndest to turn on its head but that's a discussion for another day after a stiff drink.

In last week's edition of the

The US Military Lied To Thousands Of Soldiers (And Now Veterans Are Paying for It)

Submitted by Alice Salles via TheAntiMedia.org,

Shortly after the U.S. invasion of Iraq, the Pentagon hired Bell Pottinger, a London-based PR agency. The PR firm was tasked with promoting what the Pentagon called "democratic elections" in Iraq, ultimately earning over a hundred million dollars yearly. Part of the firm's job included producing "fake al Qaeda propaganda films," the Bureau of Investigative Journalism recently reported.

Despite the PR operation's hefty price tag, the Pentagon seemed to have no issue allocating taxpayer resources to have these videos produced. But over ten years after the Iraq invasion, the Pentagon is now concerned about its past appropriations — at least part of them, anyway.

Ten years after promising $15,000 bonuses to soldiers willing to re-enlist in 2006 and 2007, the Pentagon is now forcing California veterans to pay the bonuses back.

In California, the Los Angeles Times reports, "officials signed up soldiers in assembly-line fashion" in 2006 and 2007, outlining the "generous terms available for six-year reenlistments" to those willing to sacrifice their safety, leaving their homes, once again, to fight abroad in exchange for a large bonus. Now, the Pentagon wants their money back.

To Get Soldiers to Re-enlist, the National Guard Lied

In 2008, the movie "Stop-Loss" highlighted a reality few members of the pu ...

Long-Awaited European Stock Rally May Be Here

European stocks haven't lived up to expectations this year. That might make them more attractive.

Market Misses Upside on Merck

Strong third-quarter results and better sales for cancer and hepatitis C drugs suggest Merck's rise could continue.

Nintendo's Tough Switch Ahead

Nintendo will need more support from other game makers to make its new Switch console a success.

The Technical Indicator: S&P 500's bull 'trend' intact ahead of the best six months seasonally

The major U.S. stock benchmarks' technical backdrop has strengthened, on the margin, with the worst six months seasonally — May through October — set to conclude next week. Perhaps most notably, the Nasdaq Composite has rallied within striking distance of record territory, while the S&P 500 has concurrently ventured atop near-term resistance.

Market Snapshot: Stock market slips after earnings, drop in consumer confidence

U.S. stocks drift lower Tuesday as investors grapple with a wave of lackluster corporate earnings and downbeat consumer confidence data.

Capitol Report: Paul Ryan says Obamacare 'blowing up' like a Samsung Galaxy Note 7

Critics of President Barack Obama's signature health-care law are pouncing on news of a spike in premiums with just two weeks remaining before Election Day, doubling down on pledges to repeal the law and replace it.

Earnings Summary for Today

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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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