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03Nov2016 Market Update: Wall Street Showing More Signs Of Investor Unrest Of The Upcoming Fed Rate Decision And Presidential Election Results

Written by Gary

US Indexes fractionally down (SPY -0.3%) entering the afternoon session as crude prices take a plunge (WTI -1.85%) and gold rises again. $VIX rises to 21 and indicators have become sour with warning flags growing more ominous every hour.


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) 67%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear

16%

Investors Intelligence sets the breath Above 50 bullish 52%
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.

-75.05

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.

53%

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 51%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 18.10
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 77.03
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,338

What Is Moving the Markets

Here are the headlines moving the markets.

S&P on track to snap seven-day losing streak; Facebook drags

(Reuters) - U.S. stocks steadied in late morning trading on Thursday, with the S&P 500 on track to break its longest losing streak in five years, although a fall in Facebook's shares capped gains.

U.S. services sector slows; jobless claims rise

WASHINGTON (Reuters) - U.S. services industry activity cooled in October amid a slowdown in new orders and hiring, suggesting a moderation in economic growth early in the fourth quarter.

Google formally rejects EU antitrust charges

BRUSSELS (Reuters) - Google on Thursday formally rejected European Union antitrust charges of unfairly promoting its shopping service and blocking rivals in online search advertising, paving the way for EU regulators to rule next year on these issues and potentially impose hefty fines.

VW makes 'substantial progress' toward 3.0 liter diesel agreement: judge

(Reuters) - U.S. District Judge Charles Breyer said on Thursday that Volkswagen AG has made substantial progress in talks with the U.S. Justice Department and other government agencies toward resolving the fate of about 80,000 polluting diesel 3.0 liter vehicles.

Wells Fargo CEO sees 'relatively quick' review of sales practices

(Reuters) - Wells Fargo & Co's CEO Tim Sloan said on Thursday a comprehensive review of the bank's sales practices would be done 'relatively quickly' and unveiled a series of immediate changes at the bank's retail unit under new division boss Mary Mack.

Goldman, JPMorgan, Morgan Stanley defeat appeal over Facebook IPO

NEW YORK (Reuters) - Goldman Sachs Group Inc , JPMorgan Chase & Co and Morgan Stanley need not forfeit their estimated $100 million of profit from trading Facebook Inc stock soon after underwriting its May 2012 initial public offering, a federal appeals court said on Thursday.

German finance minister plans to clamp down on offshore firms with new draft law

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble wants to force Germans to disclose their dealings with offshore firms in tax havens and make banks liable for lost tax income if they conceal their clients' business with such firms, a draft law shows.

JPMorgan plants digital payment flag at Wal-Mart

NEW YORK (Reuters) - JPMorgan Chase & Co is putting its "Chase Pay" digital wallet on Wal-Mart's website and in the retailer's Walmart Pay app, hoping to give customers more ways to make purchases without cash, a bank executive said on Thursday.

BoE ditches rate cut signal after Brexit hit to sterling

LONDON (Reuters) - The Bank of England scrapped its plan to cut interest rates and said borrowing costs could now move in either direction as the slide in sterling following the Brexit vote prompted it to ramp up its forecasts for growth and inflation in 2017.

The FBI's White Collar Crime Unit Is Probing The Clinton Foundation

Now that thanks to first the WSJ, and then Fox News, the public is aware that a probe into the Clinton Foundation is not only a hot topic for both the FBI and the DOJ (and has managed to split the law enforcement organizations, but is also actively ongoing despite the DOJ's attempts to squash it.

In the latest update from Fox's Bret Baier, we learn that the Clinton Foundation investigation has now taken a "very high priority," perhaps courtesy of new documents revealed by Wikileaks which expressed not only a collusive element between Teneo, the Clinton Foundation and the "charitable foundation's" donors, which included the use of funds for personal gain, but also revealed deep reservations by people within the foundation about ongoing conflicts of interest.

As Baier also notes, the Clinton Foundation probe has been proceeding for more than a year, led by the White-Collar Crime division.

White Collar Crime Unit pursuing @ClintonFdn case. pic.twitter.com/PLgNLfF08K

— Fox News (@FoxNews) November 3, 2016

Fox adds that even before the WikiLeaks dumps of alleged emails linked to the Clinton campaign, FBI agents had collected a great deal of evidence, and FBI agents have interviewed and re-interviewed multiple people regarding the case.

"There is an a ...

This Pullback In Gold Is Over - Or Is It?

No matter what anyone tells you, we are still in a gold bull market. Gold stocks will oscillate higher and pull-backs along the way are healthy. In fact, it appears the most recent correction is already over, even though another 2 months of negative returns would not have been out of the ordinary:

1

The idea for this chart was given to us by our good friend, Jordan Roy-Byrne, of The Daily Gold. Please visit and subscribe to his site for professional guidance in riding the uptrend in gold.

Looking at past corrections, the average duration was 80 days, losing ~30% during that period. In our recent correction, we did indeed bottom out at -30% after only 44 days. In our opinion, these oscillations are buying opportunities and given where we are currently, the window will close fairly quickly.

Egypt Stocks Soar, Bonds Rally On Currency Devaluation: "Now The Hard Work Starts"

Given our warning last week (as the black market pound crashed), the devaluation of the Egyptian pound (to 14/$) was not entirely unexpected, but as ECStrat's Emad Mostaque notes, the market was probably in the 11/$ range and so they have surprised to the upside. This will put significant social pressure on society and we could potentially see unrest as Sisi's support continues to diminish. For now, stocks and bonds are soaring on the currency's crash.

Markets were expecting a devaluation to the 11 range...

But Egypt's pound had dropped to 16.11 per dollar in the black market, another record that extends declines over the past month to 19% and down over 40% since it devalued in March.

and so officials seemed to meet the pressure half way with a devaluation to 14/$...

Egyptian bonds are ripping higher on the devaluation...

< ...

China Prepares To Impose Curbs, "Capital Controls" On Bitcoin

Last September, when we predicted that Chinese consumers, investors and savers would flock to bitcoin as a medium of facilitating capital outflows (it was trading at $230 then, it is now three times higher), we also warned that bitcoin's upside would ultimately be capped by Beijing, when China's authorities realized how the digital currency was being used to bypass capital controls, and launch a crackdown on bitcoin, as they have with most other capital outflow measures .

It appears that the time has come because, as Bloomberg reports, China's regulators are studying measures to limit transactions that use bitcoins to take funds out of the country, citing people familiar with the matter.

According to Bloomberg sources, Chinese officials are considering policies including restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad. Further indicating that Chinese regulators were "just a little behind the curve", they allegedly noticed only recently that some investors bought bitcoins on local exchanges and sold them offshore, evading rules on foreign exchange and cross-border fund flows, the report further reveals.

A quick look at the uncanny correlation between the decline in the Yuan and the rise in the bitcoin, confirms that the digital currency has indeed been largely used to evade capital controls.

As we have repeatedly noted, and as BBG repeats, "Bitcoin has surged 21% since the end of September as ...

Credit Suisse Swings the Ax But Chops Mostly Revenue

The Swiss bank is making some headway on costs but returns are a long way from recovering.

Politics Still Stars in Brexit Drama

There were two surprises for the pound Thursday. The first was the High Court decision that the government can't invoke Article 50. The second, arguably more substantive element was a change in tack from the Bank of England.

Electronic Arts and the Tale of Two Shooters

Videogame publisher stacked two premium shooter games on top of each other this holiday season.

September 2016 Manufacturing New Orders Improved

Written by Steven Hansen

US Census says manufacturing new orders improved. Our analysis is mixed. The rolling averages improved but remain in contraction.

The Ratings Game: 'Whole paycheck' reputation might not be Whole Foods' biggest problem anymore

Analysts believe food deflation is having a unique impact on Whole Foods because of its assortment, which could lead to a long-term problem rather than a short-term headwind.

Metals Stocks: Gold futures retreat after two-session climb of nearly 3%

Gold futures on Thursday pull back after a two-session climb of nearly 3% lifted prices to their highest finish in a month.

This calculator shows your tax bill if Clinton or Trump plans became reality

So, what would your tax bill be like under a President Hillary or a Donald-in-Chief? The Tax Foundation has created a calculator based on the two candidates' plans.

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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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