Written by Gary
US averages have all gone past the one percentage point gain today partially because it is driven by a surge in crude oil prices and strong results from industry heavyweights such as 3M, Johnson & Johnson and Procter & Gamble.
Expectations are also high that U.S. stockpiles data will intensify concerns over the global glut. Official data by the EIA will be released on Wednesday.
Here is the current market situation from CNN Money | |
North and South American markets are mixed today. The S&P 500 is up 1.48% while the IPC gains 1.17%. The Bovespa is off 1.47%. |
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 | 16% |
Investors Intelligence sets the breath | Above 50 bullish | 22.7% |
StockChart.com Overbought / Oversold Index ($NYMO) | anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. | -35.87 |
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) | $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. | 17.04% |
StockChart.com NYSE Bullish Percent Index ($BPNYA) | Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. | 26.24% |
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) | In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. | 30.80% |
StockChart.com 10 Year Treasury Note Yield Index ($TNX) | ten year note index value | 20.08 |
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 | 37.40 |
StockChart.com NYSE Composite (Liquidity) Index ($NYA) | Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors | 9,420 |
What Is Moving the Markets
Here are the headlines moving the markets. | |
Strong earnings, oil recovery drive indexes higher (Reuters) – Wall Street rebounded sharply on Tuesday, driven by a surge in crude oil prices and strong results from industry heavyweights such as 3M, Johnson & Johnson and Procter & Gamble. | |
U.S. consumer, housing data underscore economy’s resilience NEW YORK (Reuters) – U.S. consumer confidence improved in January despite a stock market rout and house prices accelerated in November, suggesting underlying strength in the economy despite a sharp growth slowdown in recent months. | |
AIG to spin off mortgage unit, cut jobs in sweeping overhaul (Reuters) – American International Group Inc said it would spin off its mortgage insurance unit, cut jobs and sell its broker-dealer network as part of a sweeping overhaul promised to shareholders to fend off activist investor Carl Icahn. | |
Oil jumps 5 percent on hints of deal to cut rising supply glut NEW YORK (Reuters) – Oil rose more than 5 percent on Tuesday, with Brent going above $32 a barrel, on hopes OPEC and non-OPEC producers were inching closer to a deal to reduce output in the face of one of the biggest supply gluts in decades. | |
DuPont doubles down on cost cuts ahead of Dow Chemical merger (Reuters) – Chemicals and seed producer DuPont’s quarterly profit topped analysts’ estimates as the company intensifies its cost-cutting efforts ahead of its merger with Dow Chemical Co . | |
Lockheed seals services deal with Leidos; quarterly profit rises WASHINGTON (Reuters) – Lockheed Martin Corp said on Tuesday it reached a deal to combine its information systems and government services business with Leidos Holdings Inc , and reported higher-than-expected quarterly profit and revenue. | |
Apple set for slowest ever iPhone sales growth (Reuters) – Apple Inc is expected to report a 1.3 percent increase in iPhone sales in the holiday quarter, its slowest ever and a far cry from the double-digit growth investors have come to expect. | |
Price hikes help P&G return to organic sales growth (Reuters) – Procter & Gamble Co returned to organic sales growth in the second quarter as the world’s largest consumer products maker benefited from higher prices and a sharper focus on a leaner portfolio. | |
Hedge funds betting against China eye ‘Soros moment’ LONDON (Reuters) – A handful of mainly U.S.-based macro hedge funds have led bets against China’s yuan since late last year and the coming weeks should tell how right they are in predicting a devaluation of between 20 and 50 percent. | |
“Zombie Ships” – Why Global Shipping Is Even Worse Than The Baltic Dry SuggestsOne glance at The Baltic Dry Index’s collapse is all that most need to see the painful state of the global shipping industry. However, as gCaptain reports, reality is even worse as the boom in so-called “zombie ships” suggests there is no recovery in sight for the beleaguered containership charter market, which is facing its biggest crisis since the 2008 financial crash. It looks bad… And it’s not just over-supply… (trade is slowing rapidly)…World trade volume rose by only 0.5% YoY in October and was up 2.4% YoY in the first 10 months of 2015, while world trade value in USdollar terms declined by 12.2% YoY in October and was down 11.8% YoY in the first 10 months of 2015. But, as gCaptain details, reality is even worse for the world’s shipping industry…
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I Bite My Thumb At You, SirIf anyone is wondering what the reason is for the nearly 50 point reversal (which is huge) on the ES since last night, ZeroHedge identified it earlier today. I think we’re all quite weary of all things Gartman, but I must be plain on this one point: more than anything else, it’s his writing style that drives me right up the tree. Here’s the excerpt from last night, as quoted by our friends over in Tyler-ville. Please take note of the flowery, faux-elegant language: This bear run is not over. There is more to be gotten on the downside. If we must put forth a target to the market’ downside we can suggest accepting Goldman Sachs’ latest estimate for earnings by the S&P listed companies of $110-$115 this year. If we apply a still higher than average P/e of 15 compared to the present level, that give us a target to the downside of 1690; a 16 P/e gives us a target of 1800 and in the broad scheme of things those are not illogical targets to the downside. We shall strongly urge those who are still aggressively long of equities to become less so; we shall urge those who are upon the sidelines and are œpunters rather than long term investors to err obviously on the short side and we shall urge long term investor … | |
A Constant Short Squeeze Threat: Oil Shorts Are At All-Time HighsWhile market participants will hardly need the caution, having experienced historic moves in the oil complex over the past few days including the biggest two-day surge in seven years at the end of last week, one reason why oil remains so remarkably jumpy on even the tiniest hint of supply rationalization as demonstrated this morning by the latest comments by the Iraqi oil minister, is that the short interest in both WTI and Brent is at nosebleed record highs and continues to rise with every passing week. As SocGen writes this morning, “we have seen extreme short positioning building up in the oil futures market. The quantity of short positions opened is at an all-time high for Brent, and still high for WTI futures.” SocGen correctly notes that there is now an asymmetric profile on oil: “a positive surprise could happen quite sharply, as short positions are likely to be squeezed by a profit-taking move. On WTI, the in-the-money short positions are really dominating at the front end of the curve while out-of-the-money long positions are dominating at the long end of the curve: the front end of oil curve could thus be more exposed to some profit-taking.” SocGen’s conclusion is that “deflation fears could turn around rapidly and give more room to reflation and inflation talks” which considering all central banks are now actively blaming low oil prices for th … | |
Amid Pressure, AIG Will Pare DownAmerican International Group will sell its broker-dealer network, conduct an initial public offering of its mortgage-insurance unit and more aggressively cut costs, as pressure from investor Carl Icahn grows. | |
Stocks Push Higher on Oil ReboundU.S. stocks extended their early gains Tuesday as oil prices pushed higher. | |
Oil Prices Rise on Hint of Supply CutsOil prices rose above $30 a barrel as traders speculated that large producers might be more willing to cut production, which could alleviate the global glut of crude. | |
Bond Report: Treasury yields tick lower as stocks rallyTreasury prices were little changed on Tuesday as a pause from slumping oil and equity prices reduced demand for safe assets such as government bonds |
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