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02Nov2016 Market Update: Wall Street Braces For More Downside, Crude Prices Slip, Gold Rises Testing 1308 Resistance

Written by Gary

US markets are down fractionally (SPY -0.6%) after Oil prices fell to the lowest levels of the session and the Fed is expected to hold on rates, which could give a strong signal for December. "The dam is breaking," Jeff Gundlach tells Reuters, he sees another 5-10% downside for the Spooz.


Here is the current market situation from CNN Money

North and South American markets are broadly lower today with shares in Brazil off the most. The Bovespa is down 2.46% while Mexico's IPC is off 1.47% and U.S.'s S&P 500 is lower by 0.56%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 70%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 17%
Investors Intelligence sets the breath Above 50 bullish 53%
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.

-57.52

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)

62%

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.

54%

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.

52%

StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 17.92
StockChart.com Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 77.11
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,345

Looking at the last three columns, the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. extends losses on election jitters, weak oil

(Reuters) - U.S. stocks extended losses in afternoon trading on Wednesday, with the S&P 500 headed for seventh day of losses as a tightening race for the White House rattled investors and a fall in oil prices also weighed.

Gawker settles with ex-pro wrestler Hulk Hogan for $31 million: court document

NEW YORK (Reuters) - Shuttered online news website Gawker Media LLC has reached a proposed $31 million cash settlement with Hulk Hogan, the former professional wrestler who obtained a $140 million judgment against the site over a leaked sex tape.

Chipmaker Broadcom to buy network gear maker Brocade for $5.5 billion

(Reuters) - Chipmaker Broadcom Ltd said on Wednesday it would buy network gear maker Brocade Communications Systems Inc for $5.5 billion to expand its fiber channel and data storage businesses, the latest in a flurry of chip sector deals.

U.S. sues DIRECTV for illegal information trading during Dodgers talks

WASHINGTON (Reuters) - The U.S. Justice Department filed a lawsuit on Wednesday against DIRECTV alleging the company acted as a ringleader to unlawfully swap information between it and three competitors regarding negotiations aimed at showing Dodgers baseball games in the Los Angeles area.

Fed resumes policy meeting, expected to hold rates steady

WASHINGTON (Reuters) - The U.S. Federal Reserve resumed its two-day policy meeting on Wednesday and was expected to keep interest rates unchanged while setting the stage for a hike in December.

Oil prices slide 3 percent on record U.S. crude stock build

NEW YORK (Reuters) - Oil prices tumbled 3 percent on Wednesday after a record weekly build in U.S. crude inventories stoked investor worries about a global supply glut, days after analysts estimated higher monthly OPEC crude output.

Tesla obliged to pay $1.7 billion to Panasonic for gigafactory cells

(Reuters) - Tesla Motors Inc had an obligation to pay a total of about $1.7 billion to Japan's Panasonic Corp as of Sept. 30 for electric vehicle battery cells made at Tesla's gigafactory in Nevada, the carmaker said in a regulatory filing.

Ford's U.S. vehicle sales dip 11.7 percent in October

(Reuters) - Ford Motor Co reported an 11.7 percent fall in October vehicle sales in the United States, led by a decline in sales of cars such as the Mustang and Ford Fusion sedan.

Italy watchdog to summon Monte dei Paschi, Passera over dropped rescue plan: source

MILAN (Reuters) - Italy's market watchdog Consob plans to summon top executives of Monte dei Paschi and veteran banker Corrado Passera to explain the circumstances that led to Passera's dropping his rescue plan for the bank, a source close to the matter said.

'Dead Cat Bounce' Dies - Dow Loses 18,000 (Again), S&P Drops Below 2,100

Well that escalated quickly... again...

Hope? Nope!

And bonds & bullion continue to strengthen...

With Only Six Days Remaining, Trump Surges in the Polls as Hillary Supporters Abandon Ship

Hold your real assets outside of the banking system in one of many private international facilities --> https://www.sprottmoney.com/intlstorage

With Only Six Days Remaining, Trump Surges in the Polls as Hillary Supporters Abandon Ship Written by Nathan McDonald

Peso Protection Panic - "Trump Hedge" Spikes To Highest In 5 Years

While equity 'protection' costs are rising (VIX over 20 yesterday), and bond risk has risen to 6-week highs, the most prescient 'hedge' for a Donald Trump presidency has soared to its highest since the European crisis in 2011.

USDMXN short-dated implied volality has exploded higher in the last few days...

Furthermore, as Bloomberg reports, the largest U.S.-based exchange-traded fund of Mexican equities saw its biggest withdrawals since the 2013 taper tantrum on Tuesday, as renewed FBI attention on Hillary Clinton's e-mails boosted the odds of a Donald Trump presidency.

The iShares MSCI Mexico Capped ETF has become a popular vehicle for traders looking to bet on the U.S. election, and saw $94 million in outflows.

"This particular ETF seems to be the most connected to the polls," said Eric Balchunas, who analyzes exchange-traded funds at Bloomberg Intelligence. "This has literally become a proxy for what you think will happen in the election."

< ...

The Curious Pre-Election Calm in Corporate Bonds

There is a fine line between keeping cool and being complacent. Credit markets appear to be skating on it.

Alibaba Is Pricey and Confusing​

Alibaba is difficult to value given its many moving parts.

In Tata's Boardroom Battle, TCS Has Most to Lose

For investors monitoring Tata's drama, the most important piece to watch is Tata Consultancy Services.

The Fed: Fed expected to tee up December interest-rate hike

The Federal Reserve is expected to stand pat at its November meeting but stress it is prepared to raise interest rates in December.

The Tesla-SolarCity deal is still dividing Wall Street

Tesla's latest charm offensive may have done little to sway Wall Street over the planned deal with SolarCity.

Market Snapshot: S&P 500 on track for seventh straight loss as Fed policy decision looms

U.S. stocks drifted lower Wednesday as the prospect of a tightening presidential race pushed investors away from perceived riskier investments such as global equities and toward the traditional havens of gold and the Japanese yen.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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