Written by Gary
The averages moved deep into the red today where the DOW was down over 500 points at one time and extending this year’s selloff as oil prices continued to plummet unabated. With the market off to the worst starts to a year ever, the earnings season over the next few weeks will take on greater importance to appease shaky investors.
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 1.90% while U.S.’s S&P 500 is off 1.82% and Mexico’s IPC is lower by 1.06%. |
Traders Corner – Health of the Market
| Index | Description | Current Value |
| Investors.com Members Sentiment: | % Bullish (the balance is Bearish) | 41% |
| CNN’s Fear & Greed Index | Above 50 = greed, below 50 = fear | 5% |
| Investors Intelligence sets the breath | Above 50 bullish | 22.1% |
| StockChart.com Overbought / Oversold Index ($NYMO) | anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. | -81.78 |
| StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) | $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. | 16.42% |
| StockChart.com NYSE Bullish Percent Index ($BPNYA) | Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. | 22.37% |
| StockChart.com S&P 500 Bullish Percent Index ($BPSPX) | In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. | 23.20% |
| StockChart.com 10 Year Treasury Note Yield Index ($TNX) | ten year note index value | 19.51 |
| 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 | 69.54 |
| StockChart.com NYSE Composite (Liquidity) Index ($NYA) | Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors | 8,998 |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| DoubleLine’s Gundlach: Stock, credit declines suggest margin calls NEW YORK (Reuters) – Jeffrey Gundlach, co-founder and chief executive of DoubleLine Capital, said on Wednesday that the major declines in equity and credit markets could suggest that “margin calls are going on.” |
| Ex-CEO to take stand in court fight for American Apparel CHICAGO/WILMINGTON, Del. (Reuters) – American Apparel’s former chief executive officer, Dov Charney, will take the stand in Bankruptcy Court on Wednesday in a last-ditch effort to wrest control of the teen retailer from a group of hedge funds. |
| Wal-Mart to hike pay for 1.2 million workers in 2016 (Reuters) – Wal-Mart Stores Inc said more than 1.2 million Walmart U.S. and Sam’s Club employees will receive a pay increase in 2016. |
| Netflix swept up in market rout despite strong subscriber signups (Reuters) – Netflix Inc’s shares fell as much as 10 percent on Wednesday after a widespread selloff on Wall Street overshadowed the video streaming company’s impressive subscriber additions in the fourth quarter. |
| Wall Street in relentless selloff as oil prices sink (Reuters) – Wall Street moved deep into the red on Wednesday, with the S&P 500 hitting its lowest since February 2014 and extending this year’s selloff as oil prices continued to plummet unabated. |
| Exclusive: KPMG withdraws audit opinions on CFTC over accounting error – documents WASHINGTON (Reuters) – The U.S. regulator that polices the complex derivatives markets is struggling to keep its own books in order and has made a material error that its auditor found so significant that it withdrew nearly a decade of its financial opinions, according to documents seen by Reuters. |
| Goldman posts smallest profit in four years; revenues top estimates (Reuters) – Goldman Sachs Group Inc reported its smallest quarterly profit in more than four years as a $5 billion legal settlement from the financial crisis added pain to an already tough three months. |
| Revamped Airbus A320neo debuts as oil slide continues DUBLIN (Reuters) – European planemaker Airbus said on Wednesday it had delivered the first A320neo, a fuel-efficient upgrade of its best-selling jetliner, to German carrier Lufthansa. |
| Davos leaders look beyond 2016’s early market mayhem DAVOS, Switzerland (Reuters) – Blood-letting in global markets is dominating corridor talk as business leaders and policymakers meet in Davos, although so far the view is that it doesn’t signal a financial crisis. |
| Most Shorted Stocks Suddenly Spike As Biotechs SoarAt 1245ET, someone decided that the shorts had done enough damage and investors suddenly rushed “flight to safety”-like for the GPROs, TWTRs, FITs, and Biotechs of the world. This unleashed a massive short-squeeze among the “most shorted” stocks… Squeeeeze….
Flight to safety?
Did a “Forced Buy-In” just occur? |
| The Story You Aren’t Being Told About Iran Capturing Two American VesselsSubmitted by Justin King via TheAntiMedia.org, The airwaves in the United States were filled with images of sailors on their knees while a US Navy vessel was searched. Unjustified outrage swept the nation. The US Secretary of Defense blamed the incident on a simple navigation error, however a chain of events leading back to 2009 demonstrates the facts are a little more complicated than first appear. The chain of events leads defense analysts to one unmistakable conclusion: Iran has the ability to disrupt US GPS systems. For western military analysts, the thought is terrifying. The West uses GPS for much more than replacing a compass and a map. In 2009, Lockheed Martin’s RQ-170 Sentinel showed up on a runway in Kandahar, Afghanistan. The aircraft entered service two years earlier, but the public was unaware. The bat wing styled drone is reminiscent of the Stealth Bomber. The similarities extend beyond the cosmetic, and the RQ-170 is the premier spy drone in the US fleet. This was the drone used to map out Bin Laden’s compound. It was tasked with keeping an eye on Iran’s nuclear program. That’s when things got interesting. On December 4, 2011 a RQ-170 Sentinel crashed into the Iranian countryside. Iran claimed its electronic warfare unit brought the plane down. The US Department of Defense stated the aircraft was flying over western Afghanistan and crashed near or in Iran. The aircraft was 140 miles inside Iran’s borders. The west laughed at the idea of Iran’s military obtaining the capability to down one the most sophisticated drones in the world. One military official remarked it was l … |
| A Glimpse Of Things To Come: Bankrupt Shale Producers “Can’t Give Their Assets Away”Over the course of the last several weeks, we’ve spent quite a bit of time sounding the alarm bells on America’s growing list of bankrupt oil and gas drillers. We’ve also been keen to point out that the long list of cash flow negative US producers has only managed to stay in business this long because Wall Street has thus far been willing to plug the sector’s funding gap with cheap financing thanks to ZIRP and investors’ insatiable demand for anything that looks like it might offer some semblance of yield. It is not a matter of œif but rather a matter of œwhen the entire complex goes under and when that happens, the relatively paltry sums banks have set aside against losses in their energy books will balloon as everyone on Wall Street simultaneously pulls a BOK Financial. Indeed, we’re already hearing the not-so-distant rumblings of this oncoming default freight train as JP Morgan raises its net loan loss reserves for the first time in 22 quarters, Wells Fargo discloses $17 billion in œmostly junk energy exposure, and Citi dodges questions about the reserves it’s holding against a $58 billion energy book that the bank may or may not be marking to market depending on what the Dallas Fed “didn’t” tell banks earlier this month. M2M or no, higher provisions or not, the end of America’s oil œmiracle is coming a … |
| Blame Birinyi!Just before the US equity market topped out last August, none other than infamous stock-chart-extrapolator Laszlo Birinyi ventured on to CNBC and proclaimed that the S&P 500 will hit 3,200 by the end of 2017. Since the soprano uttered that extreme, US equity markets have collapsed not just once, but twice and now trade at levels first seen over two years ago…
Noise indeed…
So blame Birinyi!! His 2015 “forecast” aside, here is what he said would happen entering the biggest economic and market collapse in US history:
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| Dow Plunges; Investors Flee to Bonds on Oil RoutInvestors fled stocks and rushed into the safety of U.S. government bonds Wednesday, putting the Dow industrials on track for the lowest close in nearly two years. |
| What a Sinking Inflation Gauge Is SayingSome think an arcane gauge of expectations is worrisome, while others find it meaningless. |
| Goldman Sachs Profit Drops on Big Legal Bill, Trading WoesGoldman Sachs’s profit tumbled 65% as weak trading and a large penalty took a heavy toll. |
| Market Extra: Saudi Arabia moves to protect currency pegSaudi Arabia is trying to stop speculators from betting against its currency. |
| 8 stocks in the S&P 500 are down more than 9% todayOil, gas and other commodities companies are suffering the most. |
Earnings Summary for Today
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