22Jan2016 Market Update: Crude Oil Expands Gains, DOW Rises To Triple Digits, Indicators Haven't Changed Their Bear Outlook

Written by Gary

US major averages opened over one percentage point higher and been trading in a narrow sideways trend. Oil has extended its gains and soared about 8 percent today (high 31’s) and the oil rig count dropped 5 more to 510 this week, the lowest since April 2010. However, analysts see further declining prices in the very near future as Iran oil hits the European Markets and expanding the crude inventory.

Here is the current market situation from CNN Money
	North and South American markets are sharply higher today with shares in U.S. leading the region. The S&P 500 is up 1.88% while Brazil’s Bovespa is up 1.18% and Mexico’s IPC is up 1.11%.

From http://www.stocktiming.com

The old saying is that “Money makes the world go round.” It doesn’t stop there … money also makes the stock market go up or down.

As Jesse Livermore said in the 20’s … “The stock market is all about money. If money goes in, the stock market goes up. If money goes out, the stock market goes down.”

The chart below shows that the level of money went up yesterday, while at the same time the Inflowing Liquidity was negative and in Contraction territory.

What is meaningful, is that the short term movement is higher and up trending, so (short term) the bias is positive.

Traders Corner – Health of the Market

Index	Description	Current Value
Investors.com Members Sentiment:	% Bullish (the balance is Bearish)	42%
CNN’s Fear & Greed Index	Above 50 = greed, below 50 = fear	12%
Investors Intelligence sets the breath	Above 50 bullish	20.3%
StockChart.com Overbought / Oversold Index ($NYMO)	anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.	-57.55
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R )	$NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.	15.11%
StockChart.com NYSE Bullish Percent Index ($BPNYA)	Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash.	25.28%
StockChart.com S&P 500 Bullish Percent Index ($BPSPX)	In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction.	28.20%
StockChart.com 10 Year Treasury Note Yield Index ($TNX)	ten year note index value	20.55
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	73.23
StockChart.com NYSE Composite (Liquidity) Index ($NYA )	Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors	9,390

What Is Moving the Markets

Here are the headlines moving the markets.
	Strong U.S. housing data offers ray of hope for slowing economy WASHINGTON (Reuters) – U.S. home resales rebounded strongly in December from a 19-month low and prices surged, indicating the housing market recovery remained intact despite signs of a sharp deceleration in economic growth in recent months. The National Association of Realtors said on Friday existing home sales jumped a record 14.7 percent to an annual rate of 5.46 million units, after being temporarily held back by the introduction of new mortgage disclosure rules, which had caused delays in
	GE doubles down on restructuring to combat slow growth (Reuters) – General Electric Co said on Friday that it would double its 2016 budget for restructuring spending to fight the effects of low oil prices and slow global growth that pummeled its earnings last year.
	Wall Street set for first weekly gain of 2016 as oil soars (Reuters) – Wall Street rallied on Friday, heading toward its first positive week of 2016, as a cold snap in the United States and Europe helped send oil prices surging for a second day.
	Oil gains 8 percent as cold snap forces bears to back off LONDON/NEW YORK (Reuters) – Oil extended its gains and soared about 8 percent on Friday, as a cold snap boosted demand for heating oil and investors took advantage of the lowest prices since 2003 to close out some of their more profitable bets on price declines.
	Starbucks still hot on China despite muted sales (Reuters) – Tepid growth in Asia might have taken some steam out of Starbucks Corp’s latest quarterly sales, but both the company and analysts remain upbeat about the coffee chain’s prospects in China.
	First GM ignition switch lawsuit is dismissed NEW YORK (Reuters) – The first federal trial over General Motors Co’s massive ignition switch recall came to an early end on Friday as the parties said the case had been dismissed, in the wake of allegations that the plaintiff had given misleading testimony.
	Davos optimists see a new era of trade reform at hand DAVOS/GENEVA (Reuters) – A rare note of optimism at Davos this year comes from the trade ministers, who will gather on Saturday for the first time since the World Trade Organization (WTO) closed the lid on 14 years of increasingly toxic stalemate.
	Fewer orders at Apple suppliers could signal first iPhone sales decline TAIPEI (Reuters) – Some of Apple Inc’s main Asian suppliers expect revenues and orders to drop this quarter, indicating iPhone sales are almost certain to post their first annual decline since the flagship product was launched almost a decade ago.
	Bankruptcy law for Puerto Rico counterproductive: insurers association NEW YORK (Reuters) – The Association of Financial Guaranty Insurers (AFGI) said on Friday that granting bankruptcy protections to the government of Puerto Rico, which is struggling to pay its debts, would jeopardize its ability to reach a consensual debt restructuring.
	Maduro “Wake Up” Call For OPEC As Venezuela Crude Crashes To 13 Year Lows Venezuela’s crude oil basket price collapsed to as low as $20.20 yesterday, according to the socialist utopia’s President Maduro. Having already “passed the point of no return,” Maduro rages that OPEC producers appear to be “finally waking up” to what they have unleashed noting that, according to him, Russia’s Putin has agreed to “work on oil price issues.” More jawboning and hope… VENEZUELA’S MADURO SAYS HE SPOKE W/RUSSIA’S PUTIN ON OIL RUSSIA’S PUTIN AGREED TO WORK ON OIL PRICE ISSUES: MADURO SOME OPEC PRODUCERS ‘WAKING UP’ TO OIL SITUATION: MADURO VENEZUELA OIL PRICE REACHED $20.20/BBL YESTERDAY, MADURO SAYS VENEZUELA SHOULD REPLACE OIL AS MAIN FX INCOME SOURCE: MADURO VENEZUELA’S MADURO SAYS HE HOPES OIL MARKET RECOVERS “Some OPEC countries that flooded the oil market are now waking up,” President Nicolas Maduro said on state television. Flooding oil market was “suicidal policy” by some oil producers: Maduro Maduro said he spoke with Russia President Vladimir Putin on oil prices – “We agreed to continue working on a common vision, a common plan” Hope is not a strategy…
	Crude Unmoved As Rig Count Extends Decline To New 6 Year Lows With crude soaring despite DOE showing inventories surging, production up fgor the 7th week in a row, and demand plummeting, Baker Hughes oil rig count dropped 5 more to 510 this week – the lowest since April 2010 (after a de minimus 1 rig drop last week). Crude had ripped higher into this print but was thoroughly unimpressed in its unchangedness. U.S. TOTAL RIG COUNT DOWN 13 TO 637 , BAKER HUGHES SAYS U.S. OIL RIG COUNT DOWN 5 TO 510 , BAKER HUGHES SAYS The lagged crude price suggests rig count declines are about to accelerate… OIL RIGS IN PERMIAN FELL BY 3 TO 195, BAKER HUGHES SAYS OIL RIGS IN WILLISTON FELL BY 2 TO 45, BAKER HUGHES SAYS Charts: Bloomberg
	Chasing The Wild Goose In Davos Submitted by MN Gordon via EconomicPrism.com, Despite the reformers endless efforts to encircle mankind, some persist beyond the broad extent of their casted net. In the backwaters of the new Republic, for instance, the distant rumble and flicker of Saturday night hootenannies still befall yonder the mighty oak groves. In defiance of all things good and proper, the unconsecrated gather under the pale moonlight and jig step to zydeco washboard rhythms while downing tipples of corn syrup and fermented grain. These knees-ups certify that, even in this era of big government, there remain places in the lower forty-eight where freedom reigns. Similarly, the backwoods of the old world, rare as they may be, have not been entirely defamed. Though old world songs are more rigid – and drinks more dry – there are still places where people come together with gusto, and without interference, to dance the polka around the maypole. Across the planet, no doubt, there are still pockets of liberty where individuals can lawfully expel into toilet bowls that use more than 1.28 gallons per flush. These places are uniquely exceptional with their own distinct rhyme. But, in common, they’re all places where the air smells sweet, the water flows clean, and the people can hold their chin up. Davos, Switzerland, located along Landwasser River, in the Swiss Alps, should be one of those places. But, alas, it is not. Sadly, for one week each year, corporate, political and academic reformers debase the wealthy enclave and ski resort for their annual hootenanny…the World Economic Forum. Improving the State of t …
	Schlumberger’s Terrifying Moment Of Truth About The US Energy Sector Having laid off 10,000 employees (and boosted his share buyback program by $10 billion – because that has worked out so well in the past), it appears Schlumberger CEO Paal Kibsgaard unleashes some very uncomfortable truthiness on his audience this morning during the earnings call, in which he revealed what likely was a wake up moment of truth for the US energy sector: For many of our customers, available cash and annual budgets were exhausted well before the halfway point for the fourth quarter… as pricing levels for frackers has dropped into unsustainable territory. Kibsgaard started by explaining why his firm has unveiled the massive layoffs and cost cuts: we have faced the most severe industry downturn in 30 years Then explained that this situation is unsustainable for American frackers… On land in both the U.S. and Canada, the weakening activity resulted in additional commercial pressure for all product lines, and in particular in pressure pumping, where pricing levels dropped further into unsustainable territory for both operating margins and cash flow. Which means, the pain has already started… The burgeoning market conditions added to the pressure to the deep financial crisis throughout the oil and gas value chain and prompted operators to make further cuts to the already low EMP i …
	Stocks, Oil Rally on Stimulus Hopes U.S. stocks rose broadly on Friday, following other global markets, driven by gains in some of the hardest-hit sectors. Oil prices also rebounded, helping boost shares of energy companies.
	Investing in 2016: ‘The Only Winning Move is Not to Play the Game’ The world’s central banks can’t save us anymore. That was the message from some of the world’s most prominent investors at the World Economic Forum in Davos, Switzerland, on Friday.
	East Coast Snowstorm Boosts Natural-Gas Producers The blizzard barreling toward the East Coast may be terrible news for travelers, but it is a rare bit of respite for beleaguered natural-gas producers.
	Metals Stocks: Gold reclaims $1,100, on track to post weekly gain Gold futures turn higher, on track to post a weekly gain, ahead of the Federal Reserve’s monetary policy meeting next week.
	Who cares about the deficit? Fewer Americans rank it as a priority Just 56% of Americans think deficit reduction should be a top priority.
	Europe Markets: European stocks gain most in nearly 4 months on QE hopes, oil spike European stocks log their first weekly win a month and the best since November.