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17Jan2017 Market Update: Wall Street Afternoon Activity Slows, Major Indexes Down Fractionally, More Bearish News From Some Analysts Worrying Investors

Written by Gary

US stock markets remain down fractionally after a moderate amount of volatility in the morning session (SPY -0.2%). Crude prices off earlier highs, but trending upwards. The US dollar has checked its slide for now as the Fed's gauge of manufacturing activity declined to 6.50 from a reading of 7.60.


Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.87% while the IPC gains 0.75%. The S&P 500 is off 0.16%.

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 60%
Investors Intelligence sets the breath Above 50 bullish 68%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. +17.61
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
76%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 71%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 74%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 23.49
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 84.23
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,211

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street falls as bank, healthcare shares weigh

(Reuters) - U.S. stocks fell on Tuesday, weighed down by financial and healthcare stocks, as investors turned skittish following President-elect Donald Trump's remarks on the dollar and drug pricing.

BAT agrees to buy Reynolds for $49 billion

LONDON (Reuters) - British American Tobacco has agreed a $49.4 billion takeover of U.S. rival Reynolds American Inc , creating the world's biggest listed tobacco company after it increased an earlier offer by more than $2 billion.

Wal-Mart pledges to keep hiring pace in U.S. this year

(Reuters) - Wal-Mart Stores Inc will create about 10,000 jobs in the United States this year as part of a previously announced plan, it said on Tuesday, as President-elect Donald Trump puts pressure on companies to hire more U.S. workers.

Exxon doubling Permian Basin holdings in U.S. for up to $6.6 billion

MIDLAND, Texas (Reuters) - Exxon Mobil Corp said on Tuesday it will pay up to $6.6 billion to double its holdings in the Permian Basin of west Texas and New Mexico, the largest oil field in the United States.

Morgan Stanley's profit doubles on bond-trading surge

(Reuters) - Morgan Stanley's profit doubled in the fourth quarter as trading activity surged across Wall Street, and the bank said it was on track to reach a number of financial goals set out by Chief Executive James Gorman.

May's Brexit: going it alone, hoping for an EU trade deal

LONDON (Reuters) - Prime Minister Theresa May has finally outlined what Brexit really means for her: Britain going it alone, fully disentangled from the European Union while hoping the bloc will agree to a comprehensive trade deal.

General Motors says to invest additional $1 billion in U.S.

WASHINGTON (Reuters) - General Motors Co on Tuesday confirmed it will invest an additional $1 billion in its U.S. factories in 2017 and will move some parts production from Mexico to the United States that was previously handled by a supplier.

U.S. says Rolls-Royce to pay $170 million as part of bribery settlement

WASHINGTON (Reuters) - Rolls-Royce Plc has agreed to pay the United States a $170 million criminal penalty as part of a global settlement to resolve bribery investigation, the U.S. Department of Justice said in a statement on Tuesday.

Wilbur Ross, Trump's Commerce pick, offshored 2,700 jobs since 2004

WASHINGTON (Reuters) - Billionaire Wilbur Ross, chosen by Donald Trump to help implement the president-elect's trade agenda, earned his fortune in part by running businesses that have offshored thousands of U.S. jobs, according to Labor Department data attained by Reuters.

Secret Service Taking Extraordinary Measures To Protect Against "Unprecedented" Inauguration Threats

Just yesterday we noted the latest undercover video from Project Veritas which revealed anarchist groups plotting to disrupt the Trump inauguration by dumping butyric acid into the heating and ventilation systems of buildings expected to be used for this weekend's festivities. Add to that, the fact that ~750,000 protesters are expected to descend upon Washington D.C. with a stated intent to "paralyze the city" and Obama's "extremely unusual" move to fire the D.C. National Guard Chief just days before the inauguration ceremonies and you have a recipe for disaster.

Describing the situation to Washington Top News, Secret Service Director Joseph Clancy acknowledged that the threat level at this ingratiation is "different" from previous ones saying that, after a contentious 2016 campaign cycle, people "are willing to do things they may not have been willing to do in the past."

"I think people today are willing to do things they may not have been willing to do in the past," Clancy said.

He cited several episodes that took place during the campaign, "where people jumped over those bike racks or security zones into our buffer. In the past, it was very rare for somebody to do that. Today, in this past campaign, people were willing to do it."

Maness says, however, "From what we have seen the security measures and ...

David Einhorn Explains How He Is Trading The "Trump Presidency"

In David Einhorn's fourth quarter letter to investors (which reveals a respectable net return of 4.5% for Q4 and 8.4% for 2016), reveals himself as yet another closet supporter of Trump policies, stating that he expects the economy to "accelerate" once Trump's still undetermined policies are implemented.

Looking back, Einhorn writes that "since Election Day, the market appears to have changed its macroeconomic outlook and is reevaluating the prospects for many companies accordingly." This, of course, is the so-called Trumpflation rally, which however may have fizzled overnight with Trump's stated opinion that the USD is now overvalued. Nonetheless, Einhorn points out that "this change in tone has been favorable to our style, and we generated a good result in the quarter despite our low net exposure and a decline in gold."

But, as he then breaks, "rather than look backward, we'd like to share our views of what a Trump Presidency (TP) might look like and why we believe we are well-positioned for 2017. In short, we believe that the post-Great Recession easy money policies have been good for Wall Street but bad for Main Street. It's possible that the TP reverses these policies, which would be good for Main Street but rough on Wall Street."

So looking forward, Einhorn is, for now at least, that the fiscal stimulus emerging from the Trump presidency will be favorable both for the economy...

While it's hard to know exactly where President-elect Donald Trump stands from day to day, his main economic policy objective appears to be employment. To that end, he has proposed corporate tax cuts, infrastructure investment, and military build-up, combined with antiimmigration policies and trade protectionism. To the extent that he can implement these policies, the economy should accelerate, and given that we are ...

Davos Elites Call For a Ban on Physical Cash... in the US.

Roughly two weeks ago, when writing about the cash ban in India, I stated:

If you think the Elites aren't watching this unfold with sheer delight you're mistaken. Globally a war on cash has been declared. And India has now proved that it can be done with little consequence. The fact it INCREASE tax hauls (something every Government on the planet wants) is just icing on the cake.

http://www.zerohedge.com/news/2017-01-05/elites-dream-cash-ban-now-closer-ever

Fast forward to this week at the Davos Economic Forum in Davos Switzerland, and Nobel Prize winning economist Joseph Stiglitz all but said the exact same thing.

Indian Prime Minister Narendra Modi has already removed 86% of his country's currency from circulation in an attempt to curb tax evasion, tackle corruption and shut down the shadow economy.

Should the US follow suit?

Joseph Stiglitz, Nobel Prize-winning economist, thinks so. Phasing out currency and moving towards a digital economy would, over the long term, have "benefits that outweigh the cost," the Columbia University professor said on day one of the World Economic Forum's Annual Meeting in Davos...

"I believe very strongly that countries like the United States could and should move to a digital currency," he said, "so that you would have the ability to trace this kind of corruption. There are important issues of privacy, cyber-security, but it would certainly have big advantages."

Trump vs. CEOs vs. Shareholders

President-elect Donald Trump's tweets could force money-losing business decisions, which executives will struggle to explain to investors.

Investors Should Heed Morgan Stanley's Cautious Note

The Wall Street bank turns in another strong quarter but its CEO warns a lot can go wrong.

Brexit and the Pound: Far From All Clear

The pound rocketed as Prime Minister Theresa May set out her Brexit plan, but many challenges lie ahead.

Repealing Obamacare will leave more people uninsured with even fewer options

CBO says the number of uninsured would balloon, while individual insurance would get much more expensive and inaccessible.

The Tell: Trump sends shiver through stock market with shot across dollar's bow

The buck stops with Donald J. Trump. The President-elect said that the U.S. dollar is "too strong," highlighting a stratospheric ride for the greenback in the wake of the real estate billionaire's Nov. 8 election victory over Hillary Clinton.

Market Extra: Gold's lustrous rise in 2017 may be best sign Trump rally is fading

Perhaps one of the clearest signs that a rally inspired by President-elect is starting to stall is shiny and yellow and is outperforming its other asset peers by a healthy margin.

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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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