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28Dec2016 Market Update: US Stock Indexes Fall Significantly As Home Sales Falls, US Dollar And Crude Prices Testing Resistances And Short-term Indicators Have Become A Crap Shoot

Written by Gary

Wall Street nosed-dived (SPY -0.7%) after the National Association of Realtors reports contracts to buy previously-owned homes fell (see below). Toshiba Corp said that cost overruns at the U.S. nuclear business CB&I could face "several billion dollars" in a write down; the news sent its shares down 20%.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 1.75% while the IPC gains 0.17%. The S&P 500 is off 0.64%.

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 68%
Investors Intelligence sets the breath Above 50 bullish 67%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +17.21
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
77%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 70%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 70%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 25.49
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 82.36
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,078

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. rally loses steam on losses across sectors

(Reuters) - Wall Street slipped for the first time in three days on Wednesday due to losses across sectors, hindering the Dow's march toward 20,000, a level it has never breached.

Pending home sales drop to 10-month low in November

WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes fell in November to their lowest level in nearly a year, a sign rising interest rates could be weighing on the housing market, the National Association of Realtors said on Wednesday.

Writedown fears wipe $5 billion off Toshiba's value as it weighs options

TOKYO (Reuters) - A looming writedown at Japanese conglomerate Toshiba Corp has wiped almost $5 billion off its value in two days and prompted a credit rating downgrade on Wednesday, as the company grapples to plug a potential multi-billion dollar hole.

Takata could pay up to $1 billion to settle U.S. criminal probe: WSJ

(Reuters) - Japan's Takata Corp is nearing a settlement with the U.S. Department of Justice and is expected to pay up to $1 billion to resolve allegations of criminal wrongdoing related to its faulty air bag inflators, the Wall Street Journal reported.

U.S. shale companies to boost spending as banks loosen purse strings

(Reuters) - U.S. shale drillers are set to ramp up spending on exploration and production next year as recovering oil prices prompt banks to extend credit lines for the first time in two years.

Kate Spade exploring sale: WSJ

(Reuters) - Hand bag and accessories maker and retailer Kate Spade & Co , under pressure from an activist investor, is exploring a sale and is working with a bank to sound out possible acquirers, the Wall Street Journal reported, citing people familiar with the matter.

U.S. fund investors cheer stocks at year's end

(Reuters) - Investors' enthusiasm for equities and corporate bonds showed little sign of waning during the latest week, with funds in both categories scooping up more money, data from the Investment Company Institute showed on Wednesday.

Abbott gets U.S. antitrust approval to buy St. Jude Medical

WASHINGTON (Reuters) - Healthcare company Abbott Laboratories has won U.S. antitrust approval for its proposed $25 billion acquisition of medical device maker St. Jude Medical Inc , the U.S. Federal Trade Commission said on Tuesday.

South Korea fines Qualcomm $854 million for violating competition laws

SEJONG, South Korea/SAN FRANCISCO (Reuters) - South Korea's antitrust regulator fined Qualcomm Inc 1.03 trillion won ($854 million) for what it called unfair business practices in patent licensing and modem chip sales, a decision the U.S. chipmaker said it will challenge in court.

Here They Come: Record Foreign Demand, Soaring Bit To Cover In Blockbuster 5 Year Auction

One didn't have to be a rocket surgeon to predict that today's 5Y auction would be strong, simply by looking at the 5Y trading super special in repo this morning, as low as a record -2.00% as shown in the chart below.

However, it wasn't just the technicals: moments ago the Treasury sold $34 billion in 5 Year Notes (Cusip U81) in what can only be described as a blockbuster auction.

The High Yield printed at 2.057%, stropping through the When Issued by a whopping 1.2bps, the most since February 2016. The Bid to Cover was just as impressive, and at 2.72, this was the highest since November 2014.

But the most remarkable feature of today's auction was the foreign demand: at 71.4% for Indirect Bidders (with 24.5% for Dealers and 4.1% for Directs), this was the highest foreign central bank and official buyer take down on record, and confirms what we reported on Friday when looking at the Fed's custody holdings of Treasuries...

... namely that foreign buyers are finally back, and back with a vengeance. This was just confirmed at least when it comes to paper located in "No Man's Land."

For definitive proof that foreigners are now rushing into Treasuries, however, wait for tomorrow's 7 Year "Belly" auction. If Indirects just can't get enough, those ...

Lame Duck John Kerry Slaps Israel Once Last Time Over Settlements

Put the validity of Kerry's claims on pause for a moment and think about what Obama is doing here. He is the very definition of lame duck. His legacy was on election and it was roundly rejected with the election of Trump. They know Trump is very pro-Israel, yet according to Israeli sources they put the UN up to the task of passing a resolution that demanded an end to Israeli settlements.

This is the exact opposite of creating a seemless transition to power for Trump. Everything these clowns are doing now, their vindictive agenda trolling, will have to be undone by Trump.

Here's Kerry calling Netanyahu the most right wing in Israeli history. I've never heard an America Secretary of State speak like this about Israel.
https://twitter.com/nbcnews/status/814150908820930560

And here is Kerry chiding Israel about its values, saying 'they can either be Jewish or democratic, it cannot be both.' I don't recall Kerry doing a presses suggesting the same advice for our dear friends in Saudi Arabia.

https://twitter.com/nbcnews/status/814148132791402498

Content originally generated at iBankCoin.com

China's Central Bank Slams "Irresponsible" Media Reports Than Yuan Broke The "Psychological Threshold" Of 7.00/$

In what seems a remarkably quick and aggressive response to 'fake news' in a data feed, China's central bank issued a statement slamming "irresponsible media" reports that the onshore Yuan rate broke the "psychological threshold" of 7.00/$. The 6 handle flash-crash was not seen in offshore rates and has been removed from FX feeds since...

Before...

And this quickly warranted a response, as Reuters reports, China's central bank on Wednesday rejected a media report that the yuan had weakened beyond the 7.0000 per dollar level in the onshore market on Dec. 28, calling the report "irresponsible".

The yuan traded between 6.9500 and 6.9666 per dollar on Wednesday, the PBOC said on its microblog .

"But some irresponsible media reported that the onshore rate of the yuan broke the psychological threshold of 7.0000," the central bank said.

Persistent downward pressure on the yuan has contributed to large capital outflows this year and the central bank has spent some of its foreign exchange reserves to support the currency's value.

The yuan edged weaker against the dollar on Wednesday in weak market sentiment as the year winds down.

The spot yuan is on track to finish the year with a loss of nearly 7 percent against the dollar, and traders expect depreciation pressure to extend into 2017.

Markets will be watching household dollar purchases closely at the beginning of 2017, when individuals will get ...

Uber & Out? Drivers Sue Sharing Economy Champion For Minimum Wage

Submitted by Giuseppe Macri via InsideSources.com,

Uber drivers in Pennsylvania are suing the ride-sharing service to collect wages while waiting for rides in the latest court battle over whether drivers should be classified as contractors or employees.

Judge Michael Baylson of the U.S. District Court for the Eastern District of Pennsylvania denied a motion by Uber in December to dismiss a civil suit brought by Uber drivers in Philadelphia. The drivers say they're entitled to minimum wage and overtime while logged into the app and waiting for rides, the Pittsburgh Post-Gazette reports.

"By misclassifying its limousine drivers as independent contractors, defendants unlawfully avoid paying hourly wages, overtime wages, business expenses, unemployment taxes, social security taxes, disability taxes, workers' compensation premiums and other mandatory employment benefits," lawyers representing the group wrote to the court.

Baylson has ordered both sides to submit evidence backing up their claims, including specific information from Uber on how much control it exerts over drivers while they wait for rides.

According to the UberBlack drivers of the app's higher-tier limousine service who filed the suit, Uber mandates a number of requirements from drivers while they're logged in that entitle them to pay when not driving. Those include requirements for business attire, fines for refusing rides, and paying for mandatory classes provided by Uber if a driver's rating falls below a certain threshold.

"'On-call' may mean something other than an obstetricia ...

China's Currency Drops But Pressure Still Builds

Markets got somewhat used to a sliding yuan in 2016. That doesn't mean the warning signals the currency is sending about China's financial system have gone away.

Electric Cars: Still Unpopular with Buyers and Unprofitable for Sellers

Tesla and General Motors are rolling out mid-priced electric cars, and others are coming soon. But the auto industry faces big hurdles before widespread adoption.

Paying to Lend: The Negative-Yield Story of 2016

Bonds have been selling off in recent weeks—but the early 2016 rally that took them into uncharted territory has a legacy.

November 2016 Pending Home Sales Index Declines And At Lowest Levels In Nearly a Year

Written by Steven Hansen

The National Association of Realtors (NAR) seasonally adjusted pending home sales index declined. The quote of the day from this NAR release:

... Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract. ...

In One Chart: All of the important Dow milestones in one chart

As we await Dow 20,000, take a look back with this visual history of the index.

Public colleges are luring international students to cope with state budget cuts

The number of international students at U.S. colleges exceeded 1 million for the first time last year

The Ratings Game: Bank of New York stock pops after mostly missing out on post-election rally

Raymond James lifts Bank of New York stock to strong buy from outperform and lists the factors that should support price gains.

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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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