Written by Gary
Morning markets opened higher, but immediately began to melt downward to where they are sea-sawing at the lows of the day. Earlier the short term indicators were very bullish but have turned neutral in the face of WTI oil starting to tumble off its morning highs closing in on its key support.
Here is the current market situation from CNN Money | |
 | North and South American markets are mixed today. The IPC is up 0.71% while the Bovespa gains 0.06%. The S&P 500 is off 0.26%. |
Traders Corner – Health of the Market
| Index | Description | Current Value |
| Investors.com Members Sentiment: | % Bullish (the balance is Bearish) | 55% |
| CNN’s Fear & Greed Index | Above 50 = greed, below 50 = fear | 16% |
| Investors Intelligence sets the breath | Above 50 bullish | 51.5% |
| StockChart.com Overbought / Oversold Index ($NYMO) | anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. | -16.66 |
| StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) | $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. | 45.46% |
| StockChart.com NYSE Bullish Percent Index ($BPNYA) | Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. | 58.02% |
| StockChart.com S&P 500 Bullish Percent Index ($BPSPX) | In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. | 57.60% |
| StockChart.com 10 Year Treasury Note Yield Index ($TNX) | ten year note index value | 23.73 |
| 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 | 77.04 |
| StockChart.com NYSE Composite (Liquidity) Index ($NYA) | Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors | 10,843 |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Finally The Truth: “The Greek Debt Is So Big Everyone Understands It Won’t Be Repaid”On Monday morning, before the latest series of optimistic rumors and realistic denials was unleashed, Latvia’s outgoing President Andris Berzins had a surprisingly accurate observation in an interview with Latvian Independent TV when he said that “this [Greek] debt is so big that everyone understands that it won’t be repaid.”
We find this statement to be amazing because this may be the very first time an official has actually told the truth about not only Europe’s but the global debt crisis, in recent history. Granted, it does miss one key distinction, namely that all the risk exposure to Greece has been shifted from European private banks to the all too public European taxpayer, but that’s a story for another day. Berzins had some further observations that were likewise amazing, adding that “loans to Greece have just bought time so that those in power don’t have to take decisions. This is like a game: who can hold out longer by not showing that this money has been lost? This burden has become bigger and there obviously is no possibility to repay.” He concluded that the “debt writedown of Greek debt will come after bankruptcy of state.” Well that, or hyperinflation. But that can only occur in local currency, i.e., New Drachma, terms. So if a “No” vote wins on Sunday, Greece will basically end up with precisely the outcome that everyone has been terrified to mention: a clean balance sheet and the hope of a … |
| Crude Slides After US Oil Rig Count Rises For First Time Since DecemberThe US oil rig count rose 12 last week – the first rise since December and biggest absolute rise since October 2014. WTI Crude is sliding on the news… pushing near a $56 handle again. *U.S. OIL RIG COUNT UP 12 TO 640, BAKER HUGHES SAYS *U.S. TOTAL RIG COUNT UP 3 TO 862, BAKER HUGHES SAYS *OIL RIGS IN PERMIAN BASIN RISE BY ONE TO 231: BAKER HUGHES *OIL RIGS IN TEXAS’S EAGLE FORD JUMP BY THREE TO 86 *OIL RIGS IN WILLISTON BASIN RISE BY TWO TO 76: BAKER HUGHES *OIL RIGS IN GRANITE WASH GAIN BY TWO TO 12: BAKER HUGHES *OIL RIGS OUTSIDE MAJOR U.S. BASINS RISE BY TWO TO 143 Biggest rise in rig count since October
Oil prices are dropping…
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| BP reaches $18.7 billion settlement over deadly 2010 spill HOUSTON (Reuters) – BP Plc will pay up to $18.7 billion in penalties to the U.S. government and five states to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in U.S. history. |
| Yelp Plunges 11%, Halted After CEO Gives Up Trying To Find BuyerTwo short months ago, Yelp’s share price collapsed following dismal earnings. Within days the company had an idea for pumping its stock back up – announce the investigation of a possible sale… Now weeks later, the CEO has been forced to admit: YELP CEO SAID TO DECIDE AGAINST FINDING A BUYER FOR NOW. We are sure there was just so much demand and that the company had so much organic growth ahead that he decided against it… traders are not amused – Yelp is down 8% and halted. *YELP SALE PROCESS SAID TO STALL After the halt, Yelp is down 11%…
As Bloomberg reports,
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| Weak employment report dampens September rate hike hopes WASHINGTON (Reuters) – U.S. job growth slowed in June and Americans left the labor force in droves, tempering expectations for a September interest rate hike from the Federal Reserve. |
| Greeks head toward Sunday vote in anger and confusion ATHENS (Reuters) – As Greece heads to a referendum on Sunday that could decide its future in the euro zone, long queues at cash machines have become the most potent symbol of the cost of the deadlock between the left-wing government and its international lenders. |
| Wall St. turns negative as IMF warns on Greece (Reuters) – U.S. stocks turned negative after the International Monetary Fund warned Greece may need a further large debt writeoff, and weak U.S. jobs data dampened the economic outlook. |
| U.S. regulator says Fiat Chrysler misled agency on Takata recalls WASHINGTON (Reuters) – Fiat Chrysler Automobiles NV misled U.S. auto safety regulators about recall notifications to the owners of vehicles equipped with defective Takata Corp air bags, a U.S. safety recall analysts said on Thursday. |
| ECB Dips Toe in Corporate Bond PoolBonds of Italy’s Enel are on the ECB’s shopping list. Investors shouldn’t assume this prefaces mass corporate-bond buying. |
| The Last Time This Happened In Credit, Bernanke Unleashed QE3While Carl Icahn’s latest ramblings have brought attention to the ‘bubble’ in high-yield debt, we would note that the HY market has already dramatically diverged from the ongoing bubble in US equities and as we have been discussing for the past year, this is exactly the pattern we saw in 2008. However there is another aspect of the HY market that is flashing red, High yield debt downgrades are the highest since Lehman and the upgrade/downgrade ratio has tumbled to its lowest since the crisis… “Price” has broken…
High yield debt downgrades are the highest since Lehman and the upgrade/downgrade ratio has tumbled to its lowest since the crisis…
The last time this happened, Bernanke unleashed QE3 – are we about to see the same in a massive surprise to markets? There has not been this many downgrades since the crisis….
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| Brazil Antitrust Agency Investigating Banks for Suspected Rate ManipulationBrazil’s antitrust agency is investigating banking giants HSBC Holdings PLC, Citigroup Inc., Deutsche Bank AG and others on suspicion of forming a cartel to manipulate the exchange rate of the Brazilian currency, the real. |
| Data Show Healthy Job Growth but Also Signs of Weakness The economy added 223,000 jobs in June, but other indicators — including wage growth for many Americans — painted a grayer picture. |
| Analysis: For Fed, a muddled jobs report even as U.S. employment continues to expand WASHINGTON (Reuters) – A mixed U.S. jobs report on Thursday may not give Fed chair Janet Yellen the “decisive evidence” of labor market recovery she wants to see before raising interest rates. |
| Brazil investigates currency market rigging by 15 global banks SAO PAULO (Reuters) – Brazil antitrust watchdog Cade opened on Thursday an investigation over alleged currency rigging by a group of 15 global banks, the first of its kind in one of the world’s busiest foreign exchange markets. |
| Univision Files for IPOSpanish-language broadcaster Univision launched the process for an IPO in a filing with the SEC. |
| Anthem, Cigna in new round of talks: source (Reuters) – U.S. health insurer Cigna Corp has had its first meetings with competitor Anthem Inc after it rebuffed Anthem’s $47 billion merger proposal last month, a person familiar with the matter said on Thursday. |
| Fiat Chrysler failings on recalls ‘obstructs’ oversight: U.S. regulator WASHINGTON (Reuters) – U.S. auto regulators have serious concerns about Fiat Chrysler Automobiles NV failures to notify owners and government officials about its recalls, an official said on Thursday. |
| Mattress maker Serta next in line to dump Trump (Reuters) – U.S. mattress maker Serta said it would not renew its licensing agreement with the Trump Organization, the latest company to distance itself from real estate developer and TV personality Donald Trump, after his comments insulting Mexicans. |
| Brazil Police Arrest Another Former Petrobras ExecutiveBrazil’s federal police have arrested another former executive of Petróleo Brasileiro as part of an investigation into a broader corruption scandal. |
| BP to Pay $18.7 Billion for Deepwater Horizon Oil Spill The tentative settlement covers suits filed by Alabama, Florida, Louisiana, Mississippi and Texas, as well as the federal government. |
| Fiat Chrysler seeks to rebut criticism ahead of U.S. safety hearing WASHINGTON (Reuters) – Fiat Chrysler Automobiles NV went on offense ahead of a hearing before federal regulators to blunt criticism of its plan to install trailer hitches on 1.5 million Jeep Cherokee and Liberty SUVs to avert a more costly fix to reduce the risk that fuel tanks could rupture and catch fire in rear-end collisions. |
| Stocks Slump Into The Red After IMF CommentsWhile “Greece doesn’t matter,” the comments by The IMF that Greece needs its debt restructured and thus the creditors’ proposals should be implicitly said “Oxi” to, has spooked US equity markets on this quiet illiquid day…
Perhaps Greece matters after all |
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