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20Apr2017 Market Update: US Stocks Rose Marginally From The Opening, DOW Up Triple Digits, Market Momentum Rolling Over, May Only See Fractional Green At The Close

Written by Gary

Wall Street is higher in early afternoon trading today (SPY +0.8%), boosted largely by gains in financial and materials stocks. WTI crude stable in the high 50's and the US dollar gaining strength.


Here is the current market situation from CNN Money

North and South American markets are higher today with shares in U.S. leading the region. The S&P 500 is up 0.72% while Mexico's IPC is up 0.26% and Brazil's Bovespa is up 0.12%.

Traders Corner - Health of the Market

Index Description Current Value
Investors.com Members Sentiment: % Bullish (the balance is Bearish) 74%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 36%
Investors Intelligence sets the breath Above 50 bullish 63%
StockChart.com Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -3.74
StockChart.com NYSE % of stocks above 200 DMA Index ($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 $OEXA200R rises above 65%
Secondary Bullish Indicators:
a) RSI is POSITIVE (above 50)
b) Slow STO is POSITIVE (black line above red line)
c) MACD is POSITIVE (black line above red line)
80%
StockChart.com NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 65%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 71%
StockChart.com 10 Year Treasury Note Yield Index ($TNX) ten year note index value 22.46
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 88.46
StockChart.com NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 11,427

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street climbs as earnings gather pace; AmEx boosts Dow

(Reuters) - Wall Street was higher in late morning trading on Thursday, boosted largely by gains in financial and materials stocks.

Verizon profit, revenue miss Wall Street view as subscribers dash

(Reuters) - Verizon Communications Inc on Thursday reported its first-ever quarterly loss of subscribers, even as it offered an unlimited data plan, raising questions on whether the No. 1 U.S. wireless carrier may need a larger acquisition than Yahoo to diversify its business.

U.S. labor market tightening; mid-Atlantic factory activity cools

WASHINGTON (Reuters) - New applications for U.S. jobless benefits rose slightly more than expected last week, but a drop in the number of Americans on unemployment rolls to a 17-year low suggested the labor market continues to tighten.

Exclusive: Buffett likely voted shares to back Wells Fargo board

NEW YORK (Reuters) - Wells Fargo & Co's largest investor, Warren Buffett, has likely already voted his shares to support the bank's recommendations at its contentious annual shareholder meeting next week, a representative told Reuters on Wednesday, which include reinstating most of the board's directors.

Saudi Arabia, Kuwait signal likely extension of oil output cut

ABU DHABI (Reuters) - Leading Gulf oil exporters Saudi Arabia and Kuwait gave a clear signal on Thursday that OPEC plans to extend into the second half of the year a deal with non-member producers to curb supplies of crude.

Worries over Trump policies cloud start of IMF, World Bank meetings

WASHINGTON (Reuters) - World finance leaders are gathering on U.S. President Donald Trump's home turf on Thursday to try to nudge his still-evolving policies away from protectionism and show broad support for open trade and global integration.

Anthem denies report of talks with Justice Dept regarding merger

WASHINGTON (Reuters) - Health insurer Anthem Inc denied a report on Thursday that it was in negotiations with the Justice Department in an effort to save its merger with smaller rival Cigna Corp .

Harley Davidson will shift production, lay off 118 Pennsylvania workers

(Reuters) - Motorcycle maker Harley-Davidson Inc said on Thursday it will lay off 118 workers at its York, Pennsylvania, plant and shift employment to Kansas City, Missouri.

Western Digital would consider Japan partners for Toshiba chip unit bid

TOKYO (Reuters) - Western Digital Corp , the U.S. partner of Toshiba Corp in a semiconductor venture, is in talks with Japanese government-backed investors and would consider a joint bid with them for the chip business, a senior official said on Thursday.

Russia Bans Jehovah's Witnesses As An "Extremist Organization"

Russians will no longer have to dread the doorbell.

On Thursday, Russia's Supreme Court ruled that Jehovah's Witnesses was an "extremist" organization after the justice ministry applied for an order to shut down the group's national headquarters near St Petersburg, Russian TASS news agency reported. Russian authorities had put several of the group's publications on a list of banned extremist literature, and prosecutors have long cast it as an organization that destroys families, fosters hatred and threatens lives, a description the organization says is false.

In its lawsuit the Justice Ministry mentioned various violations, exposed by a snap check of the organization's activities, including those of the federal law on resistance to extremist activities. The Justice Ministry wanted the organization and its 395 local chapters to be declared as extremist and outlawed and its properties to be confiscated.

The Administrative Center of Jehovah's Witnesses told TASS it found this affair very worrisome, because a future decision would concern 175,000 practicing believers. ACJW spokesman Ivan Bilenko said the organization was prepared to seek protection of its rights in courts of any instance.

A court in Moscow on October 12, 2016 warned Jehovah's Witnesses over what it ruled was extremist activities. Under Russian legislation the religious organization in question is to be closed down if it fails to eliminate the exposed violations within the required deadline or if new evidence of its extremist activities come to light. The Moscow City Court on January 16, 2017 upheld the warning over extremism handed to Jehovah's Witnesses.

The Jehovah's Witnesses group in Russia has said it will appeal against the court's ruling.

Is Trump Going to Tweet Gold Prices to Skyscraper Levels?

Trump is speaking... but the markets still don't hear him.

On January 17th 2017, the Wall Street Journal published an article in which Trump stated point-blank that the $USD is "too strong."

The US currency took note, falling over 1% that day, bringing it to critical support.

However, the Fed had different plans for the greenback, hiking rates in March and then promising to hike them twice more in 2017. And the $USD reclaimed this line and has since maintained it.

So last week, Trump struck again, this time tweeting "the US Dollar is too strong."

Look regardless of one's political views here, it's obvious Trump wants the $USD lower. And it's also obvious that he's trying to woo Janet Yellen to his side of this situation.

"I like her, I respect her," Trump said, according to a WSJ published Wednesday. "It's very early. [regarding renominating her in 2018]"

When asked about Yellen, according to the Journal, the president added: "I do like a low-interest rate policy, I must be honest with you."

Source: CNBC

You can easily read between the lines here. Trump would like Yellen a lot more if she stopped hiking rates and maintained a "low-interest rate policy."

In the simplest terms possible... Trump wants a lower $USD and low interest rates. And he's going to keep pushing for both un ...

Bill O'Reilly Gets $25 Million From Fox News As Final Payout

With Bill O'Reilly officially ousted by Fox News, there was speculation whether the former Fox anchorman would receive a lump sump payout as a parting settlement considering that O'Reilly signed a new 4 year contract just before being ousted. It has now been confirmed by FT and CNN that indeed, O'Reilly will get a payout of $25 million, equivalent to one year's salary, as part of his exit settlement with 21st Century Fox.

"The amended contract provides for Bill to receive a maximum of one year's salary," said a person with knowledge of the terms quoted by the FT.

O'Reilly's payout, following the presenter's dismissal from Fox News this week after a 22-year career with the network, is less than the $40m Roger Ailes, the network's former chairman, received when he was fired in similar circumstances last year.

At an event in New York on Wednesday night, James Murdoch, the company's CEO, was asked by a New York Times reporter about the abrupt exit.

Murdoch said "we did a thorough investigation, a thorough review, and we reached a conclusion. Everything that we said in our statement is all you need to know."

O'Reilly issued a statement that reaffirmed his innocence, saying "it is tremendously disheartening that we part ways due to completely unfounded claims. But that is the unfortunate reality many of us in the public eye must live with today."

Why The Relationship Between OPEC And Hedge Funds Is On The Verge Of Falling Apart

Following years of acrimony between OPEC and the hedge fund community, which the cartel dismissed simply as "speculators", things suddenly changed in 2016 when the two groups got so close, there were outright reports of collusion between the two on various occasions. We documented this last month in "Why OPEC Is Colluding With Hedge Funds." However, as Reuters' energy analyst John Kemp pointed out on twitter this morning, that relationship may be ending as hedge funds start to lose confidence in OPEC.

Taking us to the beginning, Kemp notes that OPEC and some of the most important hedge funds active in commodities reached an understanding on oil market rebalancing during informal briefings held in the second half of 2016. OPEC committed to implement credible production cuts and reduce global crude stocks while hedge funds responded by establishing bullish long positions in both flat prices and calendar spreads.

OPEC effectively underwrote the fund managers' bullish positions by providing the oil market with detail about output levels and public messaging about high levels of compliance. In return, the funds delivered an early payoff for OPEC through higher oil prices and a shift from contango to backwardation that should have helped drain excess crude stocks.

The Reuters analyst then notes that the understanding was initially successful between December 2016 and February 2017, with reports of strong compliance from OPEC, spot prices rising $10 per barrel and calendar spreads moving from contango to flat or, albeit briefly, backwardation.

But the understanding started to unravel with the calendar spreads collapsing after Feb. 21 and flat prices dropping f ...

The Emerging Markets Consumer Stirs Again

Results from global consumer giants Unilever and Nestlé show that even as the U.S. is a trouble spot, emerging markets are reasserting themselves. Of the two, Unilever appears better situated.

Let's Make a Deal, for TV Stations

The U.S.'s Federal Communications Commission is expected to reinstate a discount that could spur a new round of deal-making among U.S. TV station owners.

Too Soon for MSCI to Give Chinese Stocks Its Blessing

Investors should be wary if MSCI includes domestically-listed Chinese stocks in its key indexes.

ETF Focus: Marijuana ETF falls 1% on 4/20

Marijuana users may be celebrating the drug's informal holiday of 4/20 on Wednesday, but marijuana investors don't seem eager to join the party.

Morgan Stanley says this is why Tesla is building a commercial truck

Gaining a foothold into battery leasing might be behind Tesla's move to build a commercial truck, analysts at Morgan Stanley say.

Key Words: Paul Ryan says in #Time100 essay that Donald Trump could be a 'truly transformational American figure'

Time Magazine's annual listicle is out, and here's what several notables have had to say.

Earnings Summary for Today

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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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