15Jan2016 Market Update: DOW Drops Over 500 Points, WTI Crude Remains At New Lows, Unlikely Rebound To Trim Losses Later In Session

Written by Gary

Bloody Friday some are calling today after watching the DOW dropping over 500 points earlier. The good news is that key supports have NOT been broken even though we are deeply in the support zone (see below). WTI oil made a small dip lower after trading all morning sideways, hard to read into this, but one should be careful and NOT panic.

Here is the current market situation from CNN Money
	North and South American markets are sharply lower today with shares in Brazil off the most. The Bovespa is down 3.29% while U.S.’s S&P 500 is off 2.80% and Mexico’s IPC is lower by 2.38%.

A slight deviation below the bottom channel is acceptable so long as there is a rebound Monday. Selling volume is higher, but it may have not peaked and needs to be watched, along with MACD before making a commitment.

(Click here for larger image)

Traders Corner – Health of the Market

Index	Description	Current Value
Investors.com Members Sentiment:	% Bullish (the balance is Bearish)	49%
CNN’s Fear & Greed Index	Above 50 = greed, below 50 = fear	8%
Investors Intelligence sets the breath	Above 50 bullish	23.9%
StockChart.com Overbought / Oversold Index ($NYMO)	anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.	-56.98
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R )	$NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.	18.12%
StockChart.com NYSE Bullish Percent Index ($BPNYA)	Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash.	25.80%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX)	In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction.	26.60%
StockChart.com 10 Year Treasury Note Yield Index ($TNX)	ten year note index value	20.23
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	71.06
StockChart.com NYSE Composite (Liquidity) Index ($NYA )	Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors	9,212

What Is Moving the Markets

Here are the headlines moving the markets.
	Growth funds dumping Apple stock as iPhone sales seen sagging; value-managers moving in NEW YORK (Reuters) – Major U.S. growth mutual funds have been among the largest sellers of Apple Inc shares over the past six months, fueling speculation that the company’s days of supercharged growth have come to an end.
	Wall Street hammered; S&P 500 hits lowest since Oct 2014 (Reuters) – U.S. stock indexes notched deep losses in volatile trading on Friday, with the S&P 500 hitting its lowest since October 2014 and the Dow losing more than 500 points, as oil prices dived below $30 per barrel.
	Oil plunges below $29 on prospects of more Iranian crude, China worries NEW YORK (Reuters) – World oil prices slumped more than 6 percent to below $29 a barrel on Friday, as a further fall in the Chinese stock market and the prospect of an imminent rise in Iran’s crude exports deepened fears of a longer supply glut.
	Raft of weak U.S. data points to sharply slower growth WASHINGTON (Reuters) – U.S. retail sales fell in December as unseasonably warm weather undercut purchases of winter apparel and cheaper gasoline weighed on receipts at service stations, the latest indication that economic growth braked sharply in the fourth quarter.
	Big investors see lousy U.S. environment but no 2008-style collapse NEW YORK (Reuters) – With signs of a bear market in U.S. stocks emerging, some of the world’s biggest investors say the buying opportunity is not here yet and instead believe further drops of 10 to 20 percent are a possibility.
	Wal-Mart pulls plug on smallest store format, shuts 269 stores (Reuters) – Wal-Mart Stores Inc said on Friday that it would pull the plug on its smallest store format, Walmart Express, and close 269 locations as it contends with higher costs in its home market of the United States and disappointing results overseas.
	Automakers vow to boost car safety in U.S. government pact DETROIT (Reuters) – As the auto industry battles to win public confidence after a series of massive recalls, a group of 18 major carmakers announced on Friday they have agreed to a voluntary program with the U.S. government to improve auto safety.
	Lower legal bill boosts Citi profit but core revenue weak (Reuters) – Citigroup Inc reported a massive jump in quarterly profit as a sharp drop in legal costs and gains from the disposal of unwanted assets masked weak revenue from its core business.
	GE to sell appliances business to China’s Haier for $5.4 billion (Reuters) – Haier Group said it would buy General Electric Co’s appliance business for $5.4 billion, the Chinese company’s latest attempt to boost its presence in the lucrative United States market.
	Oil Extends Losses As Oil Rig Count Drops By Just 1 While gas rigs fell 13 last week, oil rigs dropped just 1 to 515. Crude’s initial reaction was to extend losses… Rig count continues to track a lagged crude price perfectly…
	Nasdaq Collapse Leaves No Major US Equity Indices Positive Post-QE3 Who said this market was all driven by The Fed? Crazy pajama-wearing conspiracy-theory tin-foil-hatters…
	Dow Crashes 650 Points From Bullard Bounce Top Some folks are selling… a lot.
	U.S. Stocks Sell Off Amid a World-Wide Rout U.S. stocks slid and the 10-year Treasury yield dipped below 2% as steep declines in oil prices and Chinese equities heightened anxieties that have pushed markets around the world lower this year.
	How to Feel Safe in Stocks When the Market Seems Dangerous If the market turbulence is making you nervous, Jason Zweig has a suggestion: Stick to your buckets.
	BlackRock Chief: Markets Will Be ‘Fine’ The head of the world’s largest money manager, BlackRock, said in an interview that financial markets will be ‘fine’ over the next year despite a sharp downturn early in 2016.
	08 January 2016: ECRI’s WLI Growth Index Marginally Declined Again ECRI’s WLI Growth Index which forecasts economic growth six months forward – declined again marginally and remains in negative territory. This index had spent 28 weeks in negative territory, then 15 weeks in positive territory – and now is in its 22nd week in negative territory.
	Capitol Report: Lawsuit filed over whether Ted Cruz is a ˜natural born citizen’ Ted Cruz is facing new questions about his eligibility to be president ” this time, in the form of a lawsuit.