Written by Gary
Volatility is the ‘go’ word for today’s session. The large caps dipped down to the 2055 SP500 support level and solidly reversed course along with crude oil only to seriously start sliding back to test support again. WTI briefly topped out at 38.57, scaring the shorts off the inverse ETF traders. It appears we will see more trading in WTI’s 36’s range again as China’s woes and the oil glut remain in focus. Expect further lower prices, volatility today and the week ahead.
Here is the current market situation from CNN Money | |
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Traders Corner – Health of the Market
| Index | Description | Current Value |
| Investors.com Members Sentiment: | % Bullish (the balance is Bearish) | 58% |
| CNN’s Fear & Greed Index | Above 50 = greed, below 50 = fear | 39% |
| Investors Intelligence sets the breath | Above 50 bullish | 45.6% |
| StockChart.com Overbought / Oversold Index ($NYMO) | anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. | -43.21 |
| StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) | $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. | 34.20% |
| StockChart.com NYSE Bullish Percent Index ($BPNYA) | Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. | 49.56% |
| StockChart.com S&P 500 Bullish Percent Index ($BPSPX) | In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. | 62.20% |
| StockChart.com 10 Year Treasury Note Yield Index ($TNX) | ten year note index value | 22.20 |
| 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 | 80.70 |
| StockChart.com NYSE Composite (Liquidity) Index ($NYA) | Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors | 10,204 |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Wall St. falls on weak Chinese data, oil slump (Reuters) – Wall Street slipped on Tuesday as oil prices steadied but remained close to their 7-year low and weak Chinese trade data reignited fears of a global economic slowdown. |
| Aging population seen restraining U.S. labor force growth WASHINGTON (Reuters) – U.S. labor force growth is set to slow further over the next decade as more Americans retire, which will confine the economy to a moderate growth path, according to government report on Tuesday. |
| Morgan Stanley to take $150 million severance charge in fourth quarter (Reuters) – Morgan Stanley will take a $150 million severance charge in the fourth quarter related to a workforce reduction, a company spokesman said on Tuesday. |
| Nasdaq to buy Chi-X Canada to access Canadian equities market TORONTO (Reuters) – Nasdaq said it would acquire the Canadian unit of alternative equities trading platform Chi-X Global Holdings in a deal giving it direct access to the Canadian equities market. |
| Former Jefferies trader Litvak’s conviction overturned (Reuters) – A federal appeals court on Tuesday overturned the conviction of a former Jefferies Group Inc trader accused of lying to investors about mortgage bond prices, in a setback to government efforts to fight Wall Street fraud after the financial crisis. |
| Yahoo may restructure media unit: Re/code (Reuters) – Yahoo Inc may make big changes to its media unit, restructuring and consolidating it, including making cuts and shuttering some efforts, tech news site Re/code said. |
| UAW launches strike at auto supplier Nexteer’s U.S. operations DETROIT (Reuters) – Union workers at Nexteer Automotive’s complex in Saginaw, Michigan, walked off the job early Tuesday after rejecting a proposed contract, halting production of steering systems and other components essential to vehicle production by General Motors Co and other automakers. |
| Falling incomes curb U.S. farmers’ ability to hold back supplies LONDON (Reuters) – Falling incomes in the U.S. will make it more challenging for farmers to hold stocks as they wait for prices to recover from current depressed levels, U.S. Department of Agriculture chief economist Robert Johansson said. |
| German Stocks Give Up Draghi “No Limits” Gains, Plunge To ‘Paris’ LowsWe’re gonna need more jawboning…
Charts: Bloomberg |
| This Is Why $20 Oil Is A PossibilitySubmitted by Euan Mearns via OilPrice.com, The day of reckoning has arrived for the oil price with the head and shoulders pattern I have been tracking for two months finally being completed in recent weeks. It became a rather drawn out affair with markets awaiting the outcome of the OPEC meeting of 4 December where OPEC elected to stay the course and do nothing. With WTI closing at $40 and Brent on $43 on Friday both are testing support levels. WTI in particular has had strong support at $40 in recent weeks. Should this support be broken then another major down leg is to be expected to the vicinity of $20. I can see nothing in the numbers presented below to provide hope that $40 may hold. The market remains over-supplied and awash in oil. Lower price is required to remove supply from the market. World total liquids production up 240,000 bpd to 97.09 Mbpd, a new record high. OPEC production down 20,000 bpd to 31.72 Mbpd (C+C) N America production up 260,000 bpd to 19.66 Mbpd. Russia and FSU up 90,000 bpd to 14.01 Mbpd Europe down 10,000 bpd to 3.40 Mbpd (compared with October 2014) Asia down 50,000 bpd to 7.99 Mbpd. Middle East rig count is rising. The international oil rig count is stable. The US oil rig count is falling.
Figure 1 The oil price has trended down this month in a saw tooth pattern to support levels and to complete the head and shoulders pattern. Friday’s close was just above the near term lows of $38.22 for WTI and $41.59 for Brent, both on August 24th. If these lo … |
| Weak Commodities Prices Weigh on Global StocksThe recent rout in commodity prices continued to hit shares of energy and mining companies Tuesday, weighing on major indexes around the globe. |
| Oil Rout Accelerates Selloff in Master-Limited PartnershipsThe oil selloff has hurt energy investments across the board, including one that has attracted billions through its reputation as a haven from big drops in the price of crude. |
| October 2015 JOLTS Number of Job Openings Unchanged, And Year-over-Year Growth Rate DeclinedWritten by Steven Hansen The BLS Job Openings and Labor Turnover Survey (JOLTS) can be used as a predictor of future jobs growth, and the predictive elements show that the year-over-year growth rate of unadjusted private non-farm job openings declined from last month. The growth rate trends are decelerating in the 3 month averages, decelerating in the 2015 averages, and decelerating in the year-over-year averages.
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| Market Extra: Oil selloff drives commodity-linked currencies to multiyear lowsThe collapse in the price of crude oil has dragged the currencies of several of the world’s largest exporters to fresh multiyear and multimonth lows Tuesday as low prices weigh on economic growth. |
| Metals Stocks: Gold fall as low oil prices dull inflation-hedge appealGold futures trade mostly lower as a recent drop in oil prices to a nearly 7-year low dulls the metal’s appeal as an inflation hedge. |
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