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17Nov2016 Market Update: New Historical High For The SP500, US Dollar Setting New Highs, Yellen Says Nary A Dovish Word, Crude Prices Volatile In The High $45 Handle

Written by Gary

Afternoon trading started off with the Spooz making a new historical high (2188) and by 12.45 ET the indexes were sharply slipping downward for what looks like a breather (SPY +1.0%). The US dollar is continuing to melt higher at 100.89 and crude remains volatile.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The IPC is up 0.54% while the S&P 500 gains 0.42%. The Bovespa is off 0.22%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 75%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 64%
Investors Intelligence sets the breath Above 50 bullish 57%
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.

+28.96

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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
69%
StockChart.com NYSE Bullish Percent Index ($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 ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 61%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value

22.56

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 81.23
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 10,755

What Is Moving the Markets

Here are the headlines moving the markets.

Yellen says Fed could raise interest rates 'relatively soon'

WASHINGTON (Reuters) - The election of Donald Trump as U.S. president has done nothing to change the Federal Reserve's plans for a rate increase "relatively soon," Fed Chair Janet Yellen said on Thursday in Congressional testimony that included a pledge to serve out her term.

S&P, Nasdaq higher as investors digest Yellen remarks

(Reuters) - The S&P and the Nasdaq were slightly higher in late morning trading on Thursday as investors assessed remarks by Federal Reserve Chair Janet Yellen at a congressional testimony.

U.S. inflation, labor market data bolster Fed December rate hike

WASHINGTON (Reuters) - U.S. consumer prices recorded their biggest increase in six months in October on rising gasoline costs and rents, suggesting a pickup in inflation that potentially clears the way for the Federal Reserve to raise interest rates in December.

Two men charged with kickback scheme at Valeant

NEW YORK (Reuters) - U.S. prosecutors on Thursday charged a former Valeant Pharmaceuticals International Inc executive and the head of a specialty pharmacy company with engaging in a multi-million dollar fraud and kickback scheme.

McDonald's to debut mobile ordering in U.S. in 2017

NEW YORK/LOS ANGELES(Reuters) - McDonald's Corp will debut mobile ordering in the United States and 10 major markets in 2017, as part of the fast-food chain's effort to win back customers by becoming a "modern, progressive burger company," executives said on Thursday.

Top British American Tobacco investor Woodford says backs Reynolds deal

LONDON (Reuters) - Leading British investor Neil Woodford's fund firm said on Thursday it backed a takeover of Reynolds American by British American Tobacco , calling the tie-up "inevitable".

AOL to cut 500 jobs, mostly in corporate units: source

(Reuters) - Verizon Communications Inc's AOL digital media unit will lay off 5 percent of its workforce, or about 500 people, to consolidate operations after recent acquisitions, a person familiar with the situation said on Thursday.

JPMorgan to pay $264 million to resolve China hiring probe: SEC, DoJ

WASHINGTON (Reuters) - JPMorgan Chase & Co has agreed to pay U.S. authorities $264 million to resolve allegations that it hired the relatives of Chinese officials in order to win banking deals, the U.S. Securities and Exchange Commission and the Justice Department said in statements Thursday.

Falling food prices, warm weather hurt Wal-Mart sales

CHICAGO (Reuters) - Wal-Mart Stores Inc on Thursday reported lower-than-expected quarterly sales at established U.S. stores, hurt by declining food prices and warm weather that reduced demand for winter clothes and other seasonal items.

Trump Wins? Foxconn Looks To Make iPhones In America

Donald Trump exclaimed that "we're going to get Apple to build their damn computers and things in this country instead of in other countries," in January, and now as Nikkei reports, Key Apple assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, has been studying the possibility of moving iPhone production to America.

iPhones might one day soon carry "Made in America" labels.

"Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.," a source said. "Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns."

Foxconn, based in the gritty, industrial Tucheng district in suburban Taipei, and its smaller Taiwanese rival churn out more than 200 million iPhones annually from their massive Chinese campuses.

Another source said that while Foxconn had been working on the request from Apple Inc., its biggest customer that accounts for more than 50% of its sales, Chairman Terry Gou had been less enthusiastic due to an inevitable rise in production costs.

"Making iPhones in the U.S. means the cost will more than double," the source said.

The person added that one view among the Apple supply chain in Taiwan is that U.S. President-elect Donald Trump may push the Cupertino, California-based tech titan to make a certain number of iPhone components at home.

According to research company IHS Markit, i ...

Jesse Jackson Tells Obama: Give Blanket Pardon To Hillary Clinton

Shortly after a haggard-looking Hillary Clinton made her first public appearance since the election, Jesse Jackson called for President Obama to issue a blanket pardon to Hillary Clinton before he leaves office, just like Ford did for Richard Nixon. Speaking at President Gerald Ford's alma mater, while stopping short of saying Clinton did anything wrong, Jackson told a large crowd of University of Michigan students, faculty and administrators gathered at daylong celebration of his career that Obama should short-circuit President-elect Donald Trump's promised attempt to prosecute Hillary Clinton for use of a private e-mail server.

"It would be a monumental moral mistake to pursue the indictment of Hillary Clinton," Jackson said and added that issuing the pardon could help heal the nation. In 1974, Ford, a University of Michigan alumnus, issued a full and complete pardon of Nixon for any crimes he may have committed. He said the pardon was in the best interests of the nation.

"President Ford said we don't need him for trophy. We need to move on. President Nixon wasn't convicted of a crime. He didn't apply for a pardon. (Ford) did it because he thought it would be best for the country.

"Hillary Clinton has not been tried, but there are those who want to drag her for the next three years. It will not stop until they find a reason to put her in jail. That would be a travesty." Of course, if Hillary is found to have broken the law, there is another word for putting her in jail: justice.

Jackson's comments came after he dropped in on an anti-Trump rally held by students on campus. According to the Detroit Free Press, there have been anti-Trump marches on U-M's campus, ...

Stocks Soar As Yellen Ends Hawkish Testimony, USD Hits 13 Year High

With nary a dovish word uttered, the end of Janet Yellen's testimony to Congress sparked a buying frenzy in USDJPY (and implicitly S&P 500 futures) sending both to post-Trump highs. At the same time, Dec rate hike odds shifted higher still sending the USD index to fresh 13.5 year highs...

Stocks and Yen carry surged...

But notably VIX spiked after the surge...

As Dollar Index jumped to new cycle highs...

Retracing almost exactly 61.8% of the big drop post 2000...

< ...

The Pressing Problem Nobody Dares Discuss

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

Perceptions may well change when the global illusions of solvency and "growth" collapse in a heap.

The list of pundits jostling for air time to add their two cents to discussions of hot-button issues such as immigration is endless. The airwaves and social media are overflowing with people wanting to comment on hot-button social issues, but when it comes to the the one truly critical dynamic that will shape the future--everyone's strangely silent.

The reason nobody dares address this problem is that it has no solution within the current mode of production, i.e. the status quo. The problem is an oversupply of labor.

One of the key takeaways from historian Peter Turchin's new book Ages of Discord is that real wages stagnate or decline in periods of labor oversupply and rise in periods of labor shortages.

This is common sense: the price/value of everything is ultimately set by the dynamics of supply and demand: the price/value of anything that is overly abundant drops. Or put another way: if demand is outstripped by supply, prices decline as long as there is surplus supply.

If supply continues to exceed demand by a wide margin, price can drop to near-zero. Consider the cost of telephony bandwidth. With the advent of fiber optics, the quantity of bandwidth available globally for telephony far exceeded demand, and the cost of bandwidth fell to pennies.

What generates an oversupply of labor?

What Could Go Wrong With the Trump Trade

Investors are showing a remarkable amount of certainty in what President-elect Trump will mean for the market. But it wouldn't take much for them to be wrong.

Dow 20000? He Called It in 2012

The sharp rally following last week's election has the Dow just 6% away from one forecaster's vaunted long-term target, years ahead of schedule.

Restaurant Investors May Want to Skip Dessert

Some casual eatery stocks have seen double-digit gains since Donald Trump's unexpected victory. But restaurant investors' eyes may be bigger than their stomachs.

October 2016 Residential Building Sector Paints A Mixed Picture

Written by Steven Hansen

The headline residential building permits and construction completions improved. One can spin the overall residential building sector both good and bad, but the unadjusted building permits shows a significant decline.

Key Words: Earth's expiration date, according to professor Stephen Hawking: 3016

The professor made headlines this week when he spoke at Oxford about the urgent need to make strides in space travel.

Deep Dive: Warren Buffett loves four airline stocks, but Wall Street prefers this one

The industry's sales, earnings and efficiency are improving, says Phil van Doorn.

Deep Dive: Bank stocks could record big gains in the months ahead if Donald Trump gets his way

Trump wants to pass tax reform and tweak regulations, says Phil van Doorn.

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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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