Written by Gary
Wall Street remain modestly higher after Janet Yellen speech, but the Fed won’t be swayed by one report she said. Fed Chairwoman Janet Yellen said today, the economy will continue to improve and gradual rate hikes will probably be appropriate, but gave no time frame for hikes.
Here is the current market situation from CNN Money | |
 | North and South American markets are mixed. The S&P 500 is higher by 0.25%, while the Bovespa is leading the IPC lower. They are down 0.90% and 0.07% respectively. |
Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term.
Traders Corner – Health of the Market
| Index | Description | Current Value |
| Investors.com Members Sentiment: | % Bullish (the balance is Bearish) | 61.0% |
| CNN’s Fear & Greed Index | Above 50 = greed, below 50 = fear | 82% |
| Investors Intelligence sets the breath | Above 50 bullish | 75% |
| StockChart.com Overbought / Oversold Index ($NYMO) | anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. | 30.26 |
| StockChart.com NYSE % of stocks above 200 DMA Index ($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%. Following a major market correction, the conditions for safe re-entry are when: a) Daily $OEXA200R rises above 65% Secondary Bullish Indicators: a) RSI is POSITIVE (above 50) b) Slow STO is POSITIVE (black line above red line) c) MACD is POSITIVE (black line above red line) | 71.81% |
| StockChart.com NYSE Bullish Percent Index ($BPNYA) | Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. | 65.47% |
| StockChart.com S&P 500 Bullish Percent Index ($BPSPX) | In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. | 70.80% |
| StockChart.com 10 Year Treasury Note Yield Index ($TNX) | ten year note index value | 17.26 |
| 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 | 79.11 |
| StockChart.com NYSE Composite (Liquidity) Index ($NYA) | Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors | 10488 |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Yellen faces fine balance on Fed rate hike after job growth tumblesPHILADELPHIA (Reuters) – Federal Reserve Chair Janet Yellen will likely keep the door open to an interest rate hike within the next few months when she speaks on Monday, while striking a balanced tone about recently disappointing jobs growth and mixed signals in the U.S. economy. |
| Supreme Court rejects Google appeal in class action disputeWASHINGTON (Reuters) – The U.S. Supreme Court on Monday rejected Google Inc’s bid to throw out a class action lawsuit involving claims that the company deceived California advertisers about the placement of Internet ads through its Adwords service. |
| Energy, financials lead Wall St gains before Yellen speech(Reuters) – Wall Street was higher on Monday morning, led by a rally in energy stocks and a rebound in financial shares following a pounding on Friday after a dismal jobs report all but ruled out chances of an interest rate hike in June. |
| Viacom CEO lawyers urge speedy trial, citing Redstone’s healthNEW YORK (Reuters) – Viacom’s Chief Executive Philippe Dauman, who is suing over his removal from Sumner Redstone’s trust, on Monday said in a court filing that a judge should expedite the matter because the 93-year-old media mogul is in ill health and may soon not be able to provide needed evidence. |
| U.S. top court rejects Ecuador challenge to Chevron arbitration awardWASHINGTON (Reuters) – The U.S. Supreme Court on Monday rejected Ecuador’s challenge to a $96 million international arbitration award in favor of energy company Chevron Corp in a dispute over the development of oil fields in the South American country. |
| Exclusive: As Iran’s oil exports surge, international tankers help ship its fuelSINGAPORE (Reuters) – More than 25 European and Asian-owned supertankers are shipping Iranian oil, data seen by Reuters shows, allowing Tehran to ramp up exports much faster than analysts had expected following the lifting of sanctions in January. |
| Pfizer’s opioid painkiller can be manipulated for abuse: FDA(Reuters) – A long-acting opioid painkiller being developed by Pfizer Inc has the potential to deter abuse but can be manipulated, a preliminary review by the U.S. Food and Drug Administration showed. |
| BlackRock’s $2.5 billion sale: a sign of life for Singapore’s office marketSINGAPORE (Reuters) – BlackRock Inc said it would sell a 43-storey Singapore office tower for $2.5 billion – one of at least three office building deals in the last two months for a market gripped by worries about oversupply and rising vacancies. |
| Fresenius, Smiths in two-way race for Pfizer infusion pumps: sourcesFRANKFURT (Reuters) – German healthcare supplier Fresenius and British engineering company Smiths Group have emerged as the final bidders for Pfizer’s infusion pumps business in a possible deal worth close to $1.5 billion, people familiar with the matter said. |
| Janet Yellen Explains How The Fed Will Keep What’s Left Of Its Credibility In June – Live FeedWill she or won’t she? With an increasing number of market participants entirely confused by the Fed’s utterly failed communications policy – as it constantly changes its focus from one meeting to another – Janet Yellen’s speech today on the economic outlook and monetary policy at the World Affairs Council of Philadelphia seems critical just one week out from a supposedly “live” June meeting (who market-implied rate-hike odds are now just 4%). Credibility crushed…
Headlines from prepared remarks: Everything is still awesome… *YELLEN: GRADUAL RATE HIKES LIKELY APPROPRIATE IF CONDITIONS MET *YELLEN SAYS SHE SEES ECONOMIC POSITIVES OUTWEIGHING NEGATIVES *YELLEN: CURRENT MONETARY POLICY STANCE `GENERALLY APPROPRIATE’ *YELLEN: MAY U.S. JOBS REPORT `DISAPPOINTING’ AND `CONCERNING’ *YELLEN: CAREFUL NOT TO READ TOO MUCH INTO ONE MONTH’S DATA (Transitory?) *YELLEN: BELIEVE WE ARE NOW CLOSE TO ELIMINATING LABOR MKT SLACK *YELLEN: OTHER LABOR MKT INDICATORS HAVE BEEN MORE POSITIVE (excepy The Fed LMCI!!??) *YELLEN: JOBS DATA SHOWED WAGE GROWTH MAY FINALLY BE PICKING UP *YELLEN: CAUTIOUSLY OPTIMISTIC OVERSEAS HEADWINDS NOW FADING But… *YELLEN: GLOBAL RISKS REQUIRE CONTINUED ATTENTION |
| JPM Still Hates The Market Rally: Here Are Its ReasonsIn the past month, not a day has passed without some major sellside firm (yes, that also now includes traditional bull Goldman Sachs) releasing its bearish take on deteriorating fundamentals, and urging clients to not only not buy the rally but sell into it (and as both retail and “smart money” flows indicate, this advice ha been heeded). Today it’s JPM’s turn. In the latest note is out of JPM’s Mislav Matejka, the equity strategist presents five reasons why “upside for stocks is limited” due to numerous reasons but mostly because “global activity momentum is failing to pick up.” Here are his five reasons not to chase the rally in the short-term:
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| Dish: Ergen’s Vision Is Worth More Than the Market ThinksRecent moves by Dish Network enhance the value of its wireless spectrum for a potential buyer. |
| Mobile Price Wars: No Sign of Peace in EuropeGiven government opposition to mergers and acquisitions, the gap between European and U.S. mobile pricing seems likely to remain wide. |
| Consumer-Credit Growth Isn’t All Good NewsConsumer credit continues to expand at a healthy pace and defaults remain low. It is too easy for banks to become complacent. |
| The Fed: Yellen says U.S. remains on track for more interest-rate hikesFed Chairwoman Janet Yellen on Monday said the economy will continue to improve and gradual rate hikes will probably be appropriate. |
| BookWatch: 5 factors that could turn America into another collapsed empireNations are just as likely to unravel after periods of prosperity as after periods of depression, warns Todd G. Buchholz, a former White House director of economic policy under President George H.W. Bush. |
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