Written by Gary
Morning markets have sea-sawed between green and red numbers finally breaking out to the upside posting ‘moderate’ fractional gains which have NOT been followed by the BTFDers jumping in securing the new higher level. Volume levels have remained low approaching anemic suggesting the recent non levels might not remain for long as investor confidence is very low.
Here are some thoughts reflecting investors worries.
Here is the current market situation from CNN Money | |
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Many thoughts revolving around analysts desk this morning on market direction which would include a breakout. A breakout to the upside is possible, but believed to be only a 40% sustaining trend, while a breakout to the downside appears to be more likely. The correction percentage is another highly contested argument of ‘how much’ with predictions of 8% to as much as 25% later this year (October).
Crude has reached 64 dollars for the second time this year, but has stopped short going much higher. Uncharted resistance at $64/$65 perhaps? WTI has also found a resistance at ~$57/$58 and I am suspect of manipulation at this point and would disregard movements higher.
U.S. Dollar has formed a symmetrical triangle pattern this morning that contains at two lower highs and two higher lows and these can mark important trend reversals in the making.
The same can be said about today’s SP500 chart being a symmetrical triangle pattern. Sideways movements can be bullish, but not being able to at least ‘touch’ the previous historic highs is troublesome, especially when they are within rock throwing distance. It did breakout upwards at noon, but is it a false breakout or better known as HFT computer manipulation?
U.S. Financial reports are ‘not so good’ lately with unemployment up, new home sales declining, factory activity showing the slowest momentum since January and rail traffic remains surprisingly weak with the rolling averages contracting.
There is defiantly a positive bullish pressure for the averages to push higher, but are having a serious time pushing above the current resistance.
Business activity weakened in China and Japan in April and growth slowed in Europe and the U.S., suggesting the global economy may be less robust than policymakers are predicting.
Sections of the U.S. financial system that may be vulnerable to investor panic are raising concerns inside the Federal Reserve, as policymakers preparing for the first interest-rate hike in nearly a decade seek to ensure the market is ready and able to handle it whenever it happens.
We have again arrived at a serious crossroad and I believe we need to wait this one out before making any serious decisions on market direction as any downward move may be in the aftermarket hours and it could be severe leaving many investors trying to catch a falling knife.
Traders Corner – Health of the Market
| Index | Description | Current Value |
| Investors.com Members Sentiment: | % Bullish (the balance is Bearish) | 60% |
| CNN’s Fear & Greed Index | Above 50 = greed, below 50 = fear | 63 |
| Investors Intelligence sets the breath | Above 50 bullish | 62.2% |
| 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. | +3.52 |
| StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) | $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. | 62.84% |
| StockChart.com NYSE Bullish Percent Index ($BPNYA) | Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. | 67.65% |
| StockChart.com S&P 500 Bullish Percent Index ($BPSPX) | In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. | 73.80% |
| StockChart.com 10 Year Treasury Note Yield Index ($TNX) | ten year note index value | 19.61 |
| 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 | 76.59 |
| StockChart.com NYSE Composite (Liquidity) Index ($NYA) | Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors | 11,194 |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Deutsche Bank fined record $2.5 billion over rate rigging LONDON/NEW YORK (Reuters) – U.S. and British authorities fined Deutsche Bank $2.5 billion, accused Germany’s largest lender of obstructing regulators and ordered it to fire seven employees in the eighth global settlement of alleged benchmark interest rate rigging. |
| Janus CEO says first-quarter stems more from equities strength, less from Gross NEW YORK (Reuters) – Janus Capital Group Inc , the firm that hired closely watched bond investor Bill Gross in September, said first-quarter earnings came in above expectations with the help of net inflows into its equity funds. |
| Nasdaq Tops March 2000 Closing RecordJust because… Nasdaq is now above the closing record high… 5132.52 is the intraday record high….
Charts: Bloomberg |
| Exclusive: France defends Renault stake increase in letter to Ghosn – sources PARIS (Reuters) – French Economy Minister Emmanuel Macron has written to Renault boss Carlos Ghosn to defend the government’s surprise stake increase in the carmaker and reject claims it endangers the Renault-Nissan alliance. |
| Greek PM meets Merkel, urges speeded up reform-for-cash deal BRUSSELS/BERLIN (Reuters) – Greek Prime Minister Alexis Tsipras called for a speeding up of work to conclude a reform-for-cash deal with euro zone creditors to keep his country afloat after talks with German Chancellor Angela Merkel on Thursday. |
| Wall Street flat as energy offsets weak data, earnings (Reuters) – Wall Street stocks were little changed in late morning trading on Thursday as soft U.S., European and Chinese data, alongside disappointing earnings forecasts, were offset by gains in energy stocks as oil futures rose. |
| Wall St. Wavers Amid Mixed Earnings General Motors, Procter & Gamble and Caterpillar reported earnings on Thursday, with only Caterpillar’s shares in the black. |
| U.S. jobless claims edge up; trend signals firmer labor market WASHINGTON (Reuters) – The number of Americans filing new claims for jobless benefits rose last week for a third straight week, but the underlying trend continued to point to solid improvement in the labor market. |
| CIBC says it in talks on potential $2 billion U.S. acquisition CALGARY (Reuters) – Canadian Imperial Bank of Commerce is in talks with several U.S. companies on a potential $2 billion wealth-management and private-banking acquisition, its top executive said in an interview. |
| Rail Week Ending 18 April 2015: Reported Improvement In Rail Data?Econintersect: Week 15 of 2015 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. This improvement is totally due to Intermodal traffic, which accounts for half of movements – but weekly railcar counts remain in contraction. Rail traffic remains surprisingly weak with the rolling averages contracting..
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| The Most Disturbing Chart Of The “New Housing Normal”Something doesn’t quite add up when the median price of a new home is just shy of all time highs, while the actual number of new homes sold is just shy of all time lows.
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| Market liquidity drought raises alarm bells inside Fed WASHINGTON/NEW YORK (Reuters) – Sections of the U.S. financial system that may be vulnerable to investor panic are raising concerns inside the Federal Reserve, as policymakers preparing for the first interest-rate hike in nearly a decade seek to ensure the market is ready and able to handle it whenever it happens. |
| GM first-quarter profit misses estimates on South America, Russia weakness DETROIT (Reuters) – General Motors Co posted a smaller-than-expected quarterly profit on Thursday as weakness in South America and Russia hurt demand and the company’s tax rate was higher than expected, sending shares down 4 percent. |
| Two shareholders sue American Apparel over CEO’s ouster (Reuters) – Two American Apparel shareholders have filed a lawsuit against the clothing and accessories retailer, alleging its founder and former Chief Executive Dov Charney was fired because he refused to sell the company. |
| Kansas City Fed: Manufacturing Continues to Contract in March 2015
Of the four regional manufacturing surveys released to date for April, one shows weak manufacturing growth while two are in contraction. |
| Shares in Brazil’s Petrobras slide after $17 billion charge RIO DE JANEIRO (Reuters) – Shares in Brazil’s state-run oil company Petrobras fell 5 percent on Thursday, a day after it reported the largest loss ever on $17 billion in charges, giving investors a deeper look at the fallout from a huge corruption scandal. |
| China, Europe and U.S. business activity disappoints in April LONDON/SYDNEY/NEW YORK (Reuters) – Business activity weakened in China and Japan in April and growth slowed in Europe and the U.S., suggesting the global economy may be less robust than policymakers are predicting. |
| The Old Models Of Work Are BrokenSubmitted by Charles Hugh-Smith via OfTwoMinds blog, The only sustainable way to avoid being commoditized is to learn to create value in ways that cannot be commoditized. Though we are still in the early stages of web-enabled automation, it’s already evident that the old models of work are broken–though few are willing to admit it.The primary model of work is being an employee in a hierarchy–Corporate America or the state (government) or a government-funded industry (defense, higher education, R&D, Medicare, etc.) The foundation of employee financial security is the paycheck, which is earned for 1) showing up and 2) following orders. In the employee model, ownership is generally limited to those with stock options. Those working for start-ups that successfully go public can cash in their options for extraordinary profits; those working for start-ups that fizzle can use their expired options as bathroom wallpaper. |
| Investors called on to give boardroom leaders greater scrutiny LONDON (Reuters) – After taking top executives to task over excessive pay and bonuses, investors are slowly turning their attention to the role of the chairperson, as concern about weak governance grows. |
| WTI Crude Surges Towards $58 – Completes “Manic Wtf” PatternFrom below $56 to $58 in a few hours as terrible Asian, European, and US PMIs prompt a spoofed, manic stop-run to Tuesday’s highs. The “Wtf” is complete…
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| How The Second Tech Bubble Will Burst, In The Words Of Silicon Valley’s “Poster Child” And World’s Youngest BillionaireBack in December, following the Sony email leak, the world was granted a second (again uninvited) glimpse into the private life and thoughts of the person who had previously suffered another email leak, this time exposing his fraternity days explots: Snapchat founder and CEO Evan Spiegel. And while many have been quick to mock Spiegel for some of his boyish ways, the reality is that the not only is the 24-year-old the world’s youngest billionaire, but he has quickly won the admiration of Silicon Valley’s brand names like Twitter CEO Dick Costolo who has said “I really think he is one of the best product thinkers out there right now.” The reason we bring up the Spiegel email leak again, some 4 months after the fact, is that while the public’s attention when the email was first released focused on his strategy surrounding the growth of Snapchat, there was another far more important aspect to Spiegel’s email. One that, in the aftermath of last night’s Facebook earnings, has proven to be spot on. Recall that in the latest Facebook earnings reported last night the company posted its slowest growth in quarterly revenue in two years coupled with higher spending on research and development ate into profits. Facebook has warned of heavy investments in 2015 as it steps up efforts to expand a collection of products that include messaging service WhatsApp, photo-sharing service Instagram and virtual reality headset maker Oculus Rift. In other words, while many focus on Facebook’s top-line and eyeball growth, far more importantly, Facebook’s spending on user acquisition is soaring. As a result, Facebook’s operating expenses rose 83% in the first quarter as R&D costs jumped 133 percent and … |
| PepsiCo profit beats estimates on stronger Frito-Lay demand (Reuters) – PepsiCo Inc reported better-than-expected first-quarter profit, helped by stronger demand for its Frito-Lay snacks in North America and price increases in its beverage business. |
| As YouTube marks tenth year, Facebook emerges as video threat (Reuters) – It’s 10 years to the day since the first clip (“Me at the Zoo”) was uploaded on YouTube, and the service – now owned by Google Inc – has dominated online video-sharing ever since. |
| When The Math PhDs Are In ChargeUS stocks are open – Panic Buy. PMI missed! – Buy moar on bad data. New Home Sales miss – even better – buy moar as bad news is good news. Yesterday’s highs hit… Stop-run complete… unleash the selling…
It appears Stocks and Oil are once again joined at the hip… until they’re not…
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| Deutsche Bank to Pay $2.5 Billion Fine to Settle Rate-Rigging Case The fixing of interest rates by Deutsche Bank employees in London and Frankfurt from 2005 to 2009 was deliberate, American and British officials said. |
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