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04Nov2016 Market Update: Wall Street Up Fractionally, Crude In The 43 Handle, Short-Term Indicators Neutral And We Remain In No Man's Land

Written by Gary

US stock markets opened flat and melted up fractionally (SPY +0.4%) to the SP 500 R1 (2,099) and has since backed off. Crude prices are volatile, The US dollar exhibiting weakness and Gold trading above 1300 for now.


Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.26% while Mexico's IPC is up 1.07% and U.S.'s S&P 500 is up 0.44%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 66%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear

16%

Investors Intelligence sets the breath Above 50 bullish

51%

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.

-77.44

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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
63%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash.

52%

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 50%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 17.78
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 77.25
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,345

What Is Moving the Markets

Here are the headlines moving the markets.

S&P on track to snap eight-day losing streak

(Reuters) - The S&P 500 index was on track to snap its eight-day losing streak, its longest since 2008, even as worries over the outcome of the U.S. presidential election continued to weigh on investor sentiment.

Strong U.S. job growth, rising wages boost December rate hike prospects

WASHINGTON (Reuters) - U.S. employers maintained a strong pace of hiring in October and boosted wages for workers, which could effectively seal the case for a December interest rate increase from the Federal Reserve.

Taco Bell to hire 100,000 as part of U.S. expansion

(Reuters) - Taco Bell Corp, a unit of Yum Brands Inc , said it would increase the number of restaurants in the United States to 9,000 and create 100,000 jobs by the end of 2022, as part of its push to reach $15 billion in sales.

Exclusive: Saudis could raise oil output again as sparring with Iran returns - sources

DUBAI/LONDON (Reuters) - Old disputes between Saudi Arabia and rival Iran resurfaced at a meeting of OPEC experts last week, with Riyadh saying it could raise oil output steeply to bring prices down if Tehran refuses to limit its supply, OPEC sources say.

Fed's Kaplan calls for fiscal, structural reform to boost U.S. growth

MEXICO CITY (Reuters) - U.S. policymakers should boost public spending on infrastructure, improve education and undertake tax, regulatory and trade reforms to speed up economic growth, Dallas Federal Reserve Bank President Robert Kaplan said on Friday.

Dutch activists amassing signatures for referendum on EU-Canada trade deal

AMSTERDAM (Reuters) - Activists in the Netherlands have gathered almost two thirds of the signatures needed to lay the groundwork for a referendum on Europe's free trade deal with Canada, which they say overly favors the interests of multinational companies.

Tesla Motors' SolarCity deal gets a boost from shareholder advisory firm

(Reuters) - Institutional Shareholder Services (ISS) on Friday recommended that investors in both companies approve Tesla Motors' plan to buy solar panel installer SolarCity for more than $2 billion.

Twitter Latam executive sees customer service strategy as key to revenue boost

SAO PAULO (Reuters) - Twitter Inc is seeking revenue outside traditional advertising sales by helping companies develop customer service channels on its platform, according to its most senior executive in Latin America, a testing ground for the new strategy.

U.S. tentatively approves Delta-Aeromexico venture

WASHINGTON (Reuters) - The U.S. Transportation Department said on Friday it has tentatively granted antitrust immunity for a planned alliance between Delta Air Lines Inc and Grupo Aeromexico SAB de CV , and proposed that the carriers divest some flight slots in New York and Mexico City.

Soros Drops Millions To 'Rig' Justice System In Arizona

As we recently noted, with hundreds of millions of dollars poured into presidential and congressional elections in the United States it can be difficult, even for mega donors like George Soros, to truly understand how much influence is being "bought." That's why Soros is pursuing a new strategy to dump millions into the campaigns of local district attorneys, a position which "exercises the greatest discretion and power in the system." So far, Soros has funneled $3 million into seven local DA races over the past year but his support is "expected to intensify in the next few years, thanks to longer-term planning and candidate recruitment." In general, Soros looks to fund progressive DAs running on platforms to "reduce racial disparity in sentencing" and support prison "diversion programs" for drug offenders instead of trials that could result in jail time.

And now it appears, as Politico's Scott Bland reports, Soros' efforts to "reshape the American justice system" are accelerating as the billionaire has contributed $2 million to a group working to defeat Maricopa County Sheriff Joe Arpaio in Arizona, the latest target of Soros' big spending in local law enforcement campaigns over the past year.

The Soros-funded PAC, Maricopa Strong, will file campaign finance documents Friday showing Soros' multi-million dollar investment against Arpaio, along with $500,000 from Texas energy billionaires Laura and John Arnold and $250,000 ...

US Oil Rig Count Jumps To 9-Month Highs

The US oil rig count has risen for 22 of the last 24 weeks and is up 9 in the last week to 450 - the highest since Feb 2016.

Despite this surge, US production remains flat during the same period - hovering around 8.5mm barrels.

No reaction in crude following its early chaos on OPEC headlines...

Shell Warns 'Peak Oil Demand' Could Be Reached In 2021

Submitted by Erwin Cifuentes via OilPrice.com,

A senior executive for Royal Dutch Shell claimed demand could reach its peak as early as 2021, which is much sooner than anticipated by other analysts.

"We've long been of the opinion that demand will peak before supply," said Shell Chief Financial Officer Simon Henry, in a Tuesday conference call.

"And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport," Henry added.

Other major oil providers have estimated that peak demand is farther down the line. Exxon Mobil in its annual outlook said "global demand for oil and other liquids is projected to rise by about 20 percent from 2014 to 2040."

The government of Saudi Arabia claimed oil demand would continue to grow based on increasing consumption in emerging markets.

Meanwhile, the World Energy Council believes peak demand will arrive in 2030 should renewable energy and other technologies such as electric cars keep their fast level of growth. Yet Henry noted ...

"This Is Simply Abnormal" - RBC Explains The "Current Insanity Of Single-Stock Behavior"

After 8 consecutive days of declines in the S&P - a losing streak that however will likely end today absent a big surprise toward the end of trading today - traders are rightfully asking themselves, what's going on, and why is the widely promised "election rally" not here? One attempt to answer what may be taking place in a suddenly very strange market is courtesy of RBC's head of X-asset strategy, Charlie McElligott, who points out that some of the moves seen in recent days are "simply abnormal" and more concerningly warns that what we are seeing now is reminiscent of what took place in the market almost exactly one year ago:

Interestingly, it's starting to rhyme a bit with late last year—longs being built in banks on higher rates expectations against a desire to underweight the bond proxies (as we see desire to short USTs again on inflation expectations / rate hike / curve steepening talk from CB's all conspiring against them), and despite this recent risk drawdown, we have seen tech and high-beta flying of late. Something to be mindful of, as the last three Januarys have seen CRUSHING contrarian moves (stocks sharply lower, USTs massively 'bid').

If McElligott is right, then any relief rally to follow the Tuesday election will likely be faded. Of course, if the market does crash on Wednesday morning in a "Brexit rerun", then it will be up to the Fed to reinvigorate animal spirits, which however will certainly not happen with a rate hike just one month later.

From RBC's Charlie McElliggott:

RBC Big Picture: Stranger Things

THE CURRENT INSANITY OF SINGLE-STOCK BEHAVIOR: Apologies to pure macro readers for so much stocks focus of late, but it continues to be accurate to say that all of the action is taking place in equities right now...and stick with me ...

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.

China Faces Looming Bulge in Currency Pressure

The yuan's next milestone may usher in a more challenging period.

Can Governments Take Baton From Central Banks?

Central banks like the ECB have been calling seemingly forever for politicians to take action. The issue is becoming urgent.

These are the skills you need to find a job in America in 2016

Jobs with certain skill sets are more in demand than others.

Andrea Coombes' Ways and Means: Ready to retire? 6 ways to know if your money is

What to do when you're ready to retire but your money isn't.

The secret to staying young is broccoli and cabbage

Scientists have found anti-aging properties in produce including broccoli, cabbage and avocados.

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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