Author Topic: S&P 500 Index Movements  (Read 49448 times)

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Re: S&P 500 Index Movements
« Reply #150 on: February 05, 2016, 06:45:49 AM »



A Preview Of This Weekend's Event That Could Unleash A "Vicious Bear Market Rally"
Tyler Durden's pictureSubmitted by Tyler Durden on 02/04/2016 16:35 -0500

Bear Market Central Banks China Credit Conditions goldman sachs Goldman Sachs Yuan


 
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As noted earlier today, BofA's chief credit strategist Michael Hartnett is anything but bullish: in his own words, he remains a seller "into strength in coming weeks/months of risk assets at least until a coordinated and aggressive global policy response (e.g. Shanghai Accord) begins to reverse the deterioration in global profit expectations and credit conditions."

There is, however, one major catalyst that will take place over the weekend that could change Hartnett's mind if only for the near term: one that could unleash a "vicious bear market rally" in his words.

As Hartnett writes, "US dollar unwind may ultimately be seen as an important inflection point for US monetary conditions…signal that “automatic stabilizers” finally coming into play; means relief for “humiliated” assets in EM, commodities, resources; markets begin to discount policy response; if China FX reserves data is better than expected, we think a bear market rally is likely to be vicious."
As a reminder, here is why the world is so focused on China's FX reserves, which have seen over $1 trillion in capital outflows since the summer of 2014 when China's reserve liquidation problem began in earnest.



 

As a further reminder, it is the pace of Chinese capital outflows, the largest among the entire EM space, that has become the "Quantitative Tightening" counterpoint to the liquidity injections by such DM central banks as the ECB and the BOJ, and which according to many is the primary reason for the recent acute weakness across asset classes as Citi recently explained.



 

So what is the reported number due this coming Sunday, that could unleash a vicious rally?

It's here that things get tricky.

According to consensus estimates, China will report that its total FX reserves declined to $3.2125 trillion from $3.33 trillion: a drop of $118 billion, or modestly higher than the massive December $108 billion outflow.

In other words, a reported number below, and certainly substantially below, $118 billion for the January outflow and it would be off to the races as a massive short squeeze will grip all the commodity and materials-linked sectors.

To be sure, BofA FX strategist Claudio Piron expects a far smaller print:

We forecast China FX reserve changes and estimate a USD37.5bn fall in January – (USD29.1bn decline adjusting for a negative FX valuation effect). Note that the standard error of the forecast is large at USD24.5bn, which would give us a downside of USD84.5bn fall. We caution that this is guidance and we attempt to be as transparent as possible so investors can gauge the odds in what is a key release for the markets. Note too this is based on onshore CNY FX volumes and our estimate maybe biased down as there are no real time volumes for offshore CNH.
 

So yes: if the number is a paltry $37.5 billion, it would mean that suddenly China's outflows are "contained", if only for the time being, and that the PBOC may have managed to quell the relentless exodus of domestic hot money abroad (whether it's real or not is a different story).

However, just as a far smaller than expected number will be very bullish, so a far greater number will be very bearish. Which brings us to a post we wrote last week showing what may have been the main reason for the dramatic January market selloff. According to estimates by Goldman Sachs, not only have outflows not slowed down as dramatically as BofA believes, but they have in fact soared to an all time high $185 billion.

This is what Goldman said:

There has been around $USD 185bn of intervention (with the recent intervention predominantly taking place in the onshore market)" split roughly $143 billion on the domestic side and $42 billion on the offshore Yuan side.
 

Since then it only got worse: courtesy of Fasanara Capital we know that in the last few days, GS revised up the magnitude of the Chinese FX spot intervention to $197bn in January 2016, when adding a $12 billion valuation adjustment, lowering the total FX reserves to just $3.133 trillion!

As Fasanara accurately adds, "in case reserves drop more than consensus (as GS estimates) we could see further pressure on USDCNH and other Asian currencies, together with continued negative reaction by global markets."

In other words, Fasanara lays out the opposite scenario to that of Harnett: one where if outflows surprise to the upside, what will follow is a vicious selloff.

* * *

So there is your bogey, one which will set the mood for risk over the next month: this weekend, China will announce its January reserve outflows which are expected to decline by about $120 billion. Should the number be far less (ostensibly closer to BofA' estimate of $37.5 billion) expect a whopper of a bear market rally coupled with a huge short squeeze. If Goldman is right, however, with its record ~$200 billion in FX intervention and implied outflows, then all bets are off.

Luckily for China, its market will be closed next week due to Chinese New Year Holiday. Which means that it will be up to US and other global stock markets to cushion the surprise until China's FX trading comes back online, and the result in this already illiquid market, could make or break many asset managers year in the span of a day

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Re: S&P 500 Index Movements
« Reply #150 on: February 05, 2016, 06:45:49 AM »

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Re: S&P 500 Index Movements
« Reply #151 on: February 05, 2016, 06:47:41 AM »




Have Stocks Priced In A Recession? (Spolier Alert: Not Even Close)
Tyler Durden's pictureSubmitted by Tyler Durden on 02/04/2016 16:30 -0500

Bear Market Bond Capital Markets China Fail Federal Reserve Federal Reserve Bank Global Economy MACD Monetary Policy RBC Capital Markets Recession Robert Shiller William Dudley


 
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Submitted by Lance Roberts via RealInvestmentAdvice.com,

The Fed Is Behind The Curve…Again

Over the last couple of months, I have been discussing the technical deterioration of the market that is occurring beneath the surface of the major indices. I have also suggested there is more than sufficient evidence to suggest we may be entering into a more protracted “bear market cycle.”

The caveat to this, of course, has been the potential for a renewed round of Central Bank interventions that would theoretically once again postpone the onset of such a decline. To wit:

“The top section of the chart is a basic ‘overbought / oversold’ indicator with extreme levels of ‘oversold’ conditions circled. The shaded area on the main part of the chart represents 2-standard deviations of price movement above and below the short-term moving average.”
SP500-MarketUpdate-020416

“There a couple of very important things to take away from this chart.
When markets begin a ‘bear market’ cycle [which is identified by a moving average crossover (red circles) combined with a MACD sell-signal (lower part of chart)], the market remains in an oversold condition for extended periods (yellow highlighted areas.)
More importantly, during these corrective cycles, market rallies fail to reach higher levels than the previous rally as the negative trend is reinforced.
Both of these conditions currently exist.
Could I be wrong? Absolutely.
 
This entire outlook could literally change overnight if the Federal Reserve leaps into action with a rate cut, another liquidity program or direct market intervention.”
This is just the most recent observation. I begin discussing the deterioration in the markets beginning last summer as early signs of the topping process began and I lowered portfolio model exposures to 50% of normal allocations.

However, despite the fact that interest rates have continued to trend lower, economic data and corporate profits have deteriorated, and inflationary pressures non-existent; most Fed speakers have sounded consistently hawkish and steadfast in their views of 4-rate hikes in 2016.

I have been steadfast in my claims that hiking rates given the current economic conditions is a mistake and will rapidly push the markets and economy towards a reversion. To wit:

“Looking back through history, the evidence is quite compelling that from the time the first rate hike is induced into the system, it has started the countdown to the next recession. However, the timing between the first rate hike and the next recession is dependent on the level of economic growth at that time.
 
When looking at historical time frames, one must not look at averages of all rate hikes but rather what happened when a rate hiking campaign began from similar economic growth levels. Looking back in history we can only identify TWO previous times when the Fed began tightening monetary policy when economic growth rates were at 2% or less.
 
(There is a vast difference in timing for the economy to slide into recession from 6%, 4%, and 2% annual growth rates.)”
Fed-Funds-GDP-5yr-Avg-Table-121715

“With economic growth currently running at THE LOWEST average growth rate in American history, the time frame between the first rate and next recession will not be long.”
It is now becoming quite apparent that the majority of economists, analysts, and Fed members have been quite mistaken in their assessments of the impact of global turmoil and the collapse in commodity prices on the domestic economy. (Read my previous commentary on oil and China)

From Market News: (Via ZeroHedge)

“Top Federal Reserve policymakers are leaving little doubt the financial turbulence and souring of the global economy could have significant implications for U.S. monetary policy, but they are loathe to draw too many conclusions about the appropriate path of interest rates at this juncture.
 
One thing is for certain: The tightening of financial conditions that has taken place since the Fed began raising short-term rates in mid-December is a matter of considerable concern to the Fed, New York Federal Reserve Bank President William Dudley said in an exclusive interview with MNI Tuesday.
 
But, it was supposed to signal the US economy is ‘strong enough’ to sustain a lift off and decouple from the rest of the world which is scrambling to cut rates. Guess not.
 
As MNI adds, “a weakening of the global economy accompanied by further appreciation in an already strong dollar could also have “significant consequences” for the U.S. economy, Dudley told MNI.”
 
“I can give you my own interpretation,” the committee’s vice chairman replied. “I read that as saying we’re acknowledging that things have happened in financial markets and in the flow of the economic data that may be in the process of altering the outlook for growth and the risk to the outlook for growth going forward.”
 
“But it’s a little soon to draw any firm conclusions from what we’ve seen,” he cautioned.”
If history serves as any guide, with the entire flow of data from economic underpinnings, high-yield markets, commodity prices and deteriorating profits screaming for help, by the time the Fed “draws any firm conclusions” it will be far too late to make any real difference.

Interest Rate Predictions Come To Fruition

Well, that didn’t take long.  At the beginning of this year, I wrote in the 2016 Market Outlook & Forecast the following:

“With the Federal Reserve raising interest rates on the short-end (Fed Funds), it will likely push the long-end of the curve lower as the economy begins to slow from the effects of monetary policy tightening.
 
From a purely technical perspective, rates have been in a long-term process of a tightening wedge. A breakout to the upside would suggest 10-year treasury rates would soar to 3.6% or higher, the consequence of which would be an almost immediate push of an economy growing at 2% into recession. The most likely path, given the current economic and monetary policy backdrop, will be a decline in rates toward the previous lows of 1.6-1.8%.(Inflation will also remain well below the Fed’s 2% target rate for the same reasons.)
InterestRate-Update-020416

“Of course, falling rates means the ongoing “bond bull market” will remain intact for another year. In fact, if my outlook is correct, bonds will likely be one of the best performing asset classes in the next year.”
When I wrote that missive, rates were at 2.3%. Yesterday, they touched 1.8% and intermediate and long duration bonds have been the asset class to own this year.

While rates will likely bounce in the short-term, I still suspect rates will finish this year closer to the low-end of my range.

Have Stocks Priced In A Recession?

I have read a significant amount of commentary as of late suggesting that the current decline in stocks have “priced in” the economic and earnings weakness we are currently witnessing.

Such is hardly the case.  There are two primary indicators that warrant such skepticism.

The first is valuations.

CAPE-5yrAvg-020416

The chart above is a 5-year Cyclically Adjusted Price Earnings (CAPE) ratio (data source: Dr. Robert Shiller.)  By speeding up the time frame from 10-years to 5-years, we find that valuation changes have shifted from being more coincident prior to 1970, to more leading currently. As shown, the downturn in valuations has been a leading indication of more severe market corrections particularly since the turn of the century.

The second is profits.

SP500-Ann-Pct-Chg-Earnings-020416

While still early into 2016, it already appears that earnings will post an annual decline for the second year running. Annual declines in earnings have historically been more evident during recessionary economic cycles (which only makes sense as consumption slows.)

It is not just me suggesting that risk is currently high either. Here is a note from RBC:

“Based on current valuations, the prices of most stocks don’t appear to have factored in a recession scenario, ‘hence the downside should we see a recession could be rather severe,’ RBC Capital Markets’ global equity team wrote in a research note to clients who believe the shares of most companies could still fall another 50% or more from current levels.”
Such declines have been consistent with past economic/earnings recessions as “overvaluation” reverts back to “undervaluation.”

Just some things to think about.

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Re: S&P 500 Index Movements
« Reply #152 on: February 05, 2016, 06:49:21 AM »

Share buyback machine remains in overdrive and experts warn it will end badly

By Ciara Linnane and Tomi Kilgore
Published: Feb 4, 2016 2:34 p.m. ET

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Companies are draining funds with buybacks, instead of investing in growth
Getty Images
Is Corporate America letting its cash drain away?
In the midst of a gloomy earnings season, the share buyback machine has remained in overdrive, and some experts are cautioning it will all end badly.

Companies, even those that are missing profit and sales estimates and cutting outlooks, or restructuring and cutting jobs, are still announcing buybacks. Coming after a long period of intensive spending on shareholder returns, the news is bad for investors hoping to see a return to growth.

“We continue to be skeptical about how companies are deploying capital, especially when it’s tied to stock-based compensation,” said Ben Silverman, vice president of research at InsiderScore, a research firm that tracks buybacks and legal insider trading for institutional clients. “We believe buybacks can be used to mask management’s inability to grow the business and be innovative thinkers.”


Don’t miss: These earnings suggest we may be headed for recession

William Lazonick, professor of economics at University of Massachusetts Lowell and director of the Center for Industrial Competitiveness., went a step further, suggesting that buybacks have the potential to push the U.S. into recession. He argues that companies are using them to prop up share prices at the expense of reinvesting in the business and supporting job stability and long-term growth.

“It has the potential to really drive the economy into the ground,” he said. “Companies have given away so much money, it’s been a long-run secular problem that has contributed to why income is so concentrated at the top.”

Read: Junk bond stress is spreading beyond energy, says Moody’s

Data shows that 78% of the total compensation paid to executives at the top 500 U.S. companies in 2014 went on stock options and stock awards, he said. “Executives are basically incentivized and rewarded for getting the stock up, and buybacks are a prime way of doing that,” he said.

The emergence of aggressive activist hedge funds has exacerbated the problem, as they deliberately target companies with strong cash flow that can be strong-armed into distributing those funds.

‘It behooves people not to look at buybacks as some kind of magic bullet to put a floor under the stock.’
Ben Silverman, VP at InsiderScore
Many activist shareholders, including billionaire investor Carl Icahn, have pushed companies to return more of the cash they hold to shareholders through share buybacks. The idea is that buybacks boost earnings per share by reducing the number of outstanding shares, and the additional buying can raise the share price. However, It doesn’t always work out that way.

For example, GoPro Inc. GPRO, -8.68%  said late Wednesday that it spent $35.6 million to buy back stock during the fourth quarter, at an average price of $23.05, but to little avail.

Read: Recession risks warn of ‘severe’ drop in the stock market

The company still reported a surprise fourth-quarter loss, and provided a dismal first-quarter sales outlook. And the stock ended the fourth-quarter $18.01, which was 22% below the average price the company paid to buy them back.

FactSet
On Thursday, it tumbled 8.5%, toward a record closing low, that was nearly 60% below what the company paid just a few months ago.

Don’t miss: Comcast spent tons of money buying back shares, but earnings still fell short.

“I always caution retail investors to not get too excited about buybacks, because what are they doing?” Silverman said. “If the stock price is not increasing, they’re just repatriating capital without getting additional value from it.”

Shareholder returns in the form of dividends and buybacks hit a record $245.7 billion in the third quarter, according to a report Thursday from Arance (Investment Research), up 4.9% from the year earlier period. On a trailing 12-month basis, returns to shareholders stood at a record $934.8 billion in the quarter, beating the previous record of $923.3 billion set in the second quarter of 2015.

“The trend is expected to continue to reach another record figure of $950 billion for 2015 and may likely touch the trillion-dollar mark,” said Aranca.


Companies that spent large sums on buybacks in the December quarter may be wishing they had waited, given the massive across-the-board selloff in January.

“It does appear to be ill-timed,” said Silverman. “Companies as a group bought into strength, rather than weakness.”

A good example of this has been Apple Inc. AAPL, +0.80% The technology giant repurchased 281.12 million shares in open-market transactions over the past five quarters, at a weighted average price of $117.48, according to an analysis of data provided in the company’s latest quarterly filing.

FactSet
The stock was trading at $96.60 in afternoon trade Thursday, or 18% below the average price the company paid.

Don’t miss: Apple CEO Tim Cook acts like he’s insane, analyst says.

“It behooves people not to look at buybacks as some kind of magic bullet to put a floor under the stock,” Silverman said. “At the end of the day, the market will typically reward companies that run their businesses well.”


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Re: S&P 500 Index Movements
« Reply #153 on: February 06, 2016, 05:30:04 AM »



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Re: S&P 500 Index Movements
« Reply #154 on: February 06, 2016, 09:21:19 AM »



"A Key Technical Indicator Just Rang The Bell On The Cyclical Bull Market"
Tyler Durden's pictureSubmitted by Tyler Durden on 02/05/2016 15:53 -0500

Albert Edwards Bank of England Bear Market China fixed Moving Averages Renminbi Technical Indicators Yuan


 
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While the primary topic of Albert Edwards' most recent note is the question how long China can sustain its FX intervention before tapping out and letting the hedge funds win with their short Yuan bets once total reserves drop below the critical redline of $2.7 trillion (the answer incidentally is between 5 months and 10 months assuming monthly reserve burn rates of $130BN to $60BN), we will skip that part as we have discussed it extensively in the past, and instead will fast forward to some chart porn by the SocGenarian.

Here is Albert Edwards showing that the S&P had breached key moving averages normally seen at the start of a bear market.

Back in the mid-1990s I spent three memorable years working at Bank America Investment Management, among some of the industry’s finest. Having previously spent three years as an economist at the Bank of England, I was new to markets and I let my economic enthusiasm often get the better of me when making recommendations to fund managers.
 
I remember the head of fixed income explaining to me it was far better not to try and pick market tops or bottoms but to wait and observe the market turn, making the trade late rather than prematurely trying to pick the bottom or top.
 
So the chart below is notable, showing that key 200d and 320d moving averages for the S&P have just been breached to the downside. If one is looking for key technical indicators to ring the bell on the cyclical bull market- maybe it has just rung loud and clear.
 
A renminbi devaluation will only sever an already badly frayed safety rope.
 

Check to you, "data-dependent" Fed

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Re: S&P 500 Index Movements
« Reply #155 on: February 07, 2016, 07:09:54 AM »


Why The Bulls Will Get Slaughtered
Tyler Durden's pictureSubmitted by Tyler Durden on 02/06/2016 17:00 -0500

Bear Market BLS ETC fixed Fox News None Rate of Change Recession recovery Steve Liesman Tax Withholding Unemployment White House Withholding taxes


 
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Submitted by David Stockman via Contra Corner blog,

Well, they got that right. Detecting that “parts of the U.S. jobs report for January seem fishy”, MarketWatch offered this pictorial summary:



 
Needless to say, none of that stink was detected by Steve Liesman and his band of Jobs Friday half-wits who bloviate on bubblevision after each release. This time the BLS report actually showed the US economy lost 2.989 million jobs between December and January. Yet Moody’s Keynesian pitchman, Mark Zandi described it as “perfect”

Yes, the BLS always uses a big seasonal adjustment (SA) in January - so that’s how they got the positive headline number. But the point is that the seasonal adjustment factor for the month is so huge that the resulting month-over-month delta is inherently just plain noise.

To wit, the seasonal adjustment factor for the month was 2.165 million. That means the headline jobs gain of 151k reported on Friday amounted to only 7% of the adjustment amount!

Any economist with a modicum of common sense would recognize that even a tiny change in the seasonal adjustment factor would mean a giant variance in the headline figure. So the January SA jobs number cannot possibly reveal any kind of trend whatsoever—-good, bad or indifferent.

But that didn’t stop Beth Ann Bovino, US chief economist at Standard & Poor’s Rating Services, from dispatching the usual all is swell hopium:

“Today’s numbers are about momentum, so while 151,000 new jobs in January is below expectations and off pace from prior months, the data shows America’s recovery is continuing.
 
Amid all the global economic turmoil and domestic market gyrations, positive job growth, the drop in the unemployment rate to 4.9%, and the uptick in wages show the U.S. is heading in the right direction.”
Actually, it proves none of those things. For one thing, the January NSA (non-seasonally adjusted) job loss this year of just under 3 million was 173,000 bigger than last January—-suggesting that things are getting worse, not better. In fact, this was the largest January job decline since the 3.69 million job loss in January 2009 during the very bottom months of the Great Recession.

So are we really “heading in the right direction” as claimed by Bovino, Zandi and the rest of the Cool-Aid crowd?

Well, just consider two alternative seasonal adjustment factors for January that have been used by the BLS in the last five years. Had they used the January 2013 adjustment factor this time, the headline gain would have been 171,000 jobs; and had they used the 2010 adjustment factor there would have been a headline loss of 183,000 jobs.

We could say in a variant of the Fox News motto—–we report, you decide. But believe me, you can look at years of seasonal adjustment factors for January (or any other month) and not find any consistent, objective formula. They make it up, as needed.

Likewise, you would think anyone paying half attention would realize by now that the 4.9% official unemployment rate (U-3) is equally meaningless due to the vast number of workers who have exited the “labor force”. In a nearby post, Jeff Snider puts this in perspective by juxtaposing the bottom dwelling trend of the adult employment-to-population rate with the U-3 headline.

His graph makes plain as day that when the U-3 unemployment rate dropped in the past, it was logically correlated with a rising share of the civilian population being employed; and that 5% or better unemployment usually meant a 63-64% employment ratio for the civilian population.

Since the financial crisis of 2008, however, that correlation has broken down completely, and the ratio still has not risen above 59.5%. Yet given the 250 million adult population today, it would take about 10 million more jobs than reported on Friday to achieve the reported 4.9% unemployment rate at the historic 63.5% employment ratio.

ABOOK Feb 2016 Payrolls Unem Rate Emp Ratio Longer

The larger point is that the monthly jobs report has now become the essential vehicle for propagating a false recovery narrative that serves the interest of Wall Street and Washington alike.

Month after month the artificially concocted and misleading headline jobs number is used to drive home a comforting meme. Namely, that the nightmare of the financial crisis and recession is fading into the rearview mirror; that the Fed and Washington have fixed the underlying ills, for instance, via Dodd-Frank; and that the soaring values of stocks and other financial assets since the March 2009 bottom are real, sustainable and deserved.

In that context, Obama’s crowing about the alleged success of his economic policies, as evidenced by the 4.9% unemployment rate reported on Friday, was especially annoying. You might have thought that the former community organizer would have noticed that notwithstanding the unfailing appearance of improvement in the BLS charts that prosperity does not seem to be trickling down.

Food stamp participation rates are the still the highest in history, and bear no resemblance to where these ratios stood during earlier intervals of so-called full employment. In a word, 4.9% unemployment can’t be true in a setting where the food stamp participation rate is nearly 15%.



Nor did he mention the “good jobs” aspect of the usual Washington blather about employment. The chart below is the reason why. There has been no recovery in the number of full-time, full-pay jobs since the pre-crisis peak.

On the margin, the US economy swapped-out 1.4 million manufacturing jobs for only a slightly higher number of waiters and bartenders. Never mind the fact that the average manufacturing job pays $55,000 on an annualized basis compared to less than $20,000 for gigs in restaurants and bars.



We have previously called this the bread and circuses economy, and the January numbers once again did not disappoint. Nearly one-third of the 151,000 gain for January was in this category alone. Moreover, the 1.83 million job gain in this sector since the December 2007 pre-crisis peak accounts for 38% of all the net new jobs generated by the entire US economy during that period.

Bread and Circuses Jobs

Another large—–and aberrant—–chunk of the January jobs gain was in retail. Consistent with normal post-holiday patterns the NSA count of retail sector jobs dropped from 16.3 million in December to 15.7 million in January, representing a loss of nearly 600,000 jobs.

You could call that par for the seasonal course, but you would be wrong. In defiance of all logic, the BLS seasonally adjusted the number into a gain of 58,000, thereby accounting for another one-third of the headline total.

Nor is this a one month aberration, either. When you combine the leisure and hospitality  category of the nonfarm payroll with retail, temp agencies, personal services like gardeners and maids etc., you get a larger subset that we have labeled the Part Time Economy.

Not only did it account for well more than half of the of the January gain, but also a similar portion of the eight-year peak-to-peak gain since December 2007. That is, the US economy has generated 4.875 million additional nonfarm payroll jobs since we were at 5% unemployment last time around.

But as is evident from the graph, nearly 2.6 million or 53% of these gains represented part-time jobs. On an income equivalent basis, however, the payroll slots amount to a 40% job. Most of them a generate less than 25 hours per week and pay rates of less than $14 per hour. So on a full year equivalent basis that is an annualized pay rate of $20,000 per year compared to $50,000 for full time jobs, or what we have labeled as the Breadwinner Jobs category.

Part Time Jobs

Needless to say, we are still not there yet when it comes to full-pay, full-time jobs. There are still a million fewer of these jobs today than there were at the pre-crisis peak. And nearly 2 million fewer than when Bill Clinton was vacating the White House back in January 2001.

 

Breadwinner Jobs

At the end of the day, the monthly jobs report is an economic sideshow. The nonfarm payroll part of it, in particular, is a relic of your grandfather’s economy when most jobs  represented 40-50 hours per week of paid employment on a year round basis.

You could compare both short-term changes and longer-term trends because jobs slots where pretty much apples-to-apples units, and the BLS had not yet invented most of the insane trend-cycle modeling manipulations and dense and obscurantist birth/death and seasonal adjustment routines that have turned the report into quasi-fiction.

As I have suggested before, the world would be far better off if they simply shutdown the BLS. There are already far more timely, accurate and honest price and inflation indices published by a variety of private sources.

And if we need aggregated data on employment trends, the US government itself already publishes a far more timely and representative measure of Americans at work. It’s called the treasury’s daily tax withholding report, and it has this central virtue. No employer sends Uncle Sam cash for model imputed employees or for 2.1 million seasonally adjusted payroll records that did not actually report for work.

Stated differently, the daily tax withholding report is the real thing and the whole thing; it captures the labor input of the entire US economy in real time, and does not get revised and manipulated endlessly over the course of months and years from its original release.

Why is this important. My colleague Lee Adler has been tracking the daily withholding reports for more than a decade and knows their details and rhythms inside-out. He now reports that tax collections are swooning just as they always do when the US economy enters a recession.

In fact, he latest report as of February 6th indicates that,

“The annual rate of change in withholding taxes has shifted from positive to negative. It has grown increasingly negative in inflation adjusted terms for more than a month. Following on the heels of a weak December, it is a clear sign that the US has entered recession……..the implied real growth rate is now roughly negative 4.5% per year……it is the most negative growth rate since the recession. It follows the longest stretch of zero growth in several years, This can no longer be considered temporary or an anomaly. It has all the earmarks of a trend reversal and is getting worse.”
We will have more on this next week, but here’s the thing. Wall Street’s fast money boys and girls and robo-machine’s will have the mother of all hissy fits when it becomes apparent once again that the US is plunging into recession, and that all those sell-side hockey sticks on corporate earnings will be going up in smoke.

The talking heads have spent the entire first five weeks of this year insisting that the market’s rough patch is simply the pause that refreshes because there is never a bear market outside of recession.

Well, exactly. The recession is arriving; the bear market has incepted; and the bulls are heading for the slaughter. Again.

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Re: S&P 500 Index Movements
« Reply #156 on: February 09, 2016, 05:05:39 AM »



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Re: S&P 500 Index Movements
« Reply #157 on: February 09, 2016, 05:52:44 AM »



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Re: S&P 500 Index Movements
« Reply #158 on: February 09, 2016, 07:52:31 AM »



Trump: Markets in a 'big, fat, juicy bubble'
Jacob Pramuk   | @jacobpramuk
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Amid another battering for stocks Monday, billionaire businessman Donald Trump contended that markets still look overvalued.

"I hope I'm wrong, but I think we're in a big, fat, juicy bubble," the Republican presidential candidate said on CNBC's "Power Lunch."

Major U.S. stock averages were down more than 2 percent each Monday afternoon, continuing a rocky year in which the S&P 500 has fallen 10 percent. Fears about slowing growth in the United States and around the globe have contributed to the recent selling.

Trump, who was in New Hampshire ahead of Tuesday's primary voting, criticized the state of the economy and touted his plans to trim U.S. tax rates and increase competitiveness with China, which has had recent problems of its own.

Presidential candidate Donald Trump speaks during the Republican U.S. presidential candidates debate in Manchester, New Hampshire, Feb. 6, 2016.
Carlo Allegri | Reuters
Presidential candidate Donald Trump speaks during the Republican U.S. presidential candidates debate in Manchester, New Hampshire, Feb. 6, 2016.
Trump's promotion of his economic policy comes after he finished second in last week's Iowa caucuses to Sen. Ted Cruz of Texas. Despite his slip in Iowa, the bombastic Trump holds a solid lead over Sen. Marco Rubio of Florida in recent New Hampshire polls.

The billionaire called the January U.S. jobs report released Friday a "phony deal," saying that the headline unemployment rate does not include those who have stopped looking for work. The U.S. economy created 151,000 jobs in January as the unemployment rate fell to 4.9 percent, but a broader measure of unemployment held steady at 9.9 percent.

President Barack Obama had a more optimistic take on the reading, saying the U.S. has "the strongest, most durable economy in the world."

"I know that's still inconvenient for Republican stump speeches as their doom and gloom tour plays in New Hampshire. I guess you cannot please everybody," he said Friday.


Republican presidential candidates Jeb Bush and Sen. Marco Rubio (R-FL) participate in the Republican presidential debate at St. Anselm College February 6, 2016 in Manchester, New Hampshire.
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Republican presidential candidate Donald Trump throws hats into the audience after giving a speech.
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For all of his criticism of Obama's handling of the economy, Trump agrees with the current commander in chief that attempts by U.S. corporations to keep money overseas should be limited.

Trump said he would seek to curb so-called tax inversions, in which companies carry out an acquisition and change their tax address to potentially pay lower rates abroad. He said that if elected, he would attempt to cut taxes for businesses to keep tax money and jobs within the United States.

"We have to try to keep our companies here," Trump said.

He said that cuts to encourage businesses to stay in the U.S. would coincide with broader reductions for the middle class. Trump's plan, while lowering individual income taxes, could reduce tax revenues by more than $10 trillion over the next decade, according to a Tax Foundation analysis last year.

Donald Trump after the Republican U.S. presidential candidates debate in Manchester, New Hampshire, Feb. 6, 2016.
Op-ed: New Hampshire primary isn't about Trump
Trump also outlined his plan to levy tariffs on Chinese exports to reduce the effects of currency devaluation. He has proposed a tariff of as much as 45 percent on Chinese exports to the U.S., according to The New York Times.

"It's impossible for our businesses to compete" currently, Trump said Monday.

Former Florida Gov. Jeb Bush, Trump's Republican rival, criticized his plans in a CNBC interview Monday. He contended that Trump does not have "an economic policy that's grounded in solid, conservative principles."

Trump said that Bush is "not a very smart person" and does not understand his plan. Trump said that the U.S. "has to get (China) to behave."

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Re: S&P 500 Index Movements
« Reply #159 on: February 09, 2016, 07:55:34 AM »



Stocks end off lows as energy stocks eke out gains
Fred Imbert   | @foimbert
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U.S. stocks closed off their session lows on Monday amid a late rally in the energy sector.

"I just think it's bargain hunting from oversold conditions," said Peter Cardillo, chief market economist at First Standard Financial.

The Dow Jones industrial average closed 177 points lower, with Goldman Sachs and Home Depot weighing the most on the index. The index, however, fell as much as 401.42 points on Monday. Chevron closed the session as the biggest advancer in the Dow.

The S&P 500 dropped 1.4 percent, with financials and materials lagging. Energy, however, rose in late-afternoon trading, and closed as the only advancing sector.

Read MoreBank investors have suffered two lost decades
The Nasdaq composite shed over 3 percent at session lows and closed 1.8 percent lower, as Apple gained 1 percent.

"It might have been people saying the pendulum has swung too far to one side," said JJ Kinahan, chief strategist at TD Ameritrade. "There are a lot of things going on right now and people are trying to rectify where they truly should be."
U.S. stocks were sharply lower for most of Monday trading, as global growth concerns weighed on investors.

"I think it's worries that the global economy is slowing down more than expected and that's translating into lower oil prices," said Kate Warne, investment strategist at Edward Jones.

Crude prices resumed their downward trajectory, with WTI closing 3.88 percent lower, or $1.20, at $29.69 a barrel, but rose above $30 a barrel in after-hours. Last week, U.S. oil fell about 6 percent.

"Like it or not, we use oil as a barometer for the global economy," said Art Hogan, chief market strategist at Wunderlich Securities.

Read MoreJeremy Siegel: I was too bullish—and here's why
Gold futures for April delivery surged 3.47 percent to close at $1,197.90 an ounce, and broke above $1,200 for the first time since June. The precious metal also recorded its best trading day since December 2014.

"The gold trade is signaling a retreat in global inflation," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "In times of economic stress ... gold acts as a store of value."

He also said that, in order to stem this sharp sell-off, "you're going to need for some tangible evidence that the global economy is not slowing down, and that's China."

Chinese markets are closed this week due to the Lunar New Year holiday.

"Without something fresh to sort of turn the tide on this, I think the path of least resistance is to the downside," Wunderlich Securities' Hogan said.

Read MoreThe market needs to rethink the Fed: Economist
With no major economic data due Monday, investors looked ahead to Fed Chair Janet Yellen's testimony in Congress on Wednesday and Thursday.

"We have the most cautious Fed chair I've seen in many, many years," said Maris Ogg, president at Tower Bridge Advisors. "I think we're going to get a reiteration ... of what we saw in the minutes."

However, First Standard's Cardillo said that "if she would hint that wages are rising, but still not at levels that would constitute a rate hike, then that would turn things around."



Is this the year gold stops breaking hearts?

Oil settles at lowest level since Jan. 21

10-year note yield falls below 1.75 percent

Dollar falls to 15-month low versus yen
Gold bullion bars and coins.
Gold sees biggest gain since Dec. 2014

Concerns of a Fed rate hike took center stage Friday after the Bureau of Labor Statistics said the U.S. economy added 151,000 jobs in January — below expectations — but wages rose 0.5 percent.

"The wage spike we saw in the jobs report certainly sparked some Fed concerns," Cardillo said. "But if you look at the yield curve, you wouldn't think that."

U.S. Treasurys rallied Monday, with the benchmark 10-year note yield falling to 1.76 percent, while two-year yields traded at 0.67 percent.
"Folks are getting less confident that the central banks can control the economy," said Bruce Bittles, chief investment strategist at R.W. Baird. "It appears monetary policy has not worked to stimulate the economy, here or [abroad]."

Read MoreThis group of stocks are in a free fall
Stocks closes lower Friday, with the Dow falling over 200 points and the Nasdaq tumbling 3 percent.

"At some point, prices have to get low enough where people start seeing them as bargains ... but I don't know when that's going to happen," said Randy Frederick, managing director of trading and derivatives at Charles Schwab. "This could go on for a while."

Overseas, European equities closed lower, with the pan-European STOXX 600 index dropping 3.5 percent. The German DAX also dipped below the 9,000 mark for the first time since October 2014.
"We're in a very broad-based sell-off. Investors are selling first and asking questions later," said Adam Sarhan, CEO of Sarhan Capital.
In corporate U.S. news, Hasbro and Diamond Offshore, among others, reported quarterly results.

"Through last Friday's close, 314 companies in the S&P 500 have now reported 4Q 2015 results," Nick Raich, CEO of The Earnings Scout, said in a note. "Collectively, 72% of those companies have seen their next quarter's (i.e. 1Q 2016) EPS estimates drop 4.81% after reporting."

Read MoreWhy the rout could continue
"Once we get through earnings season, it will be easier for investors to take a more long-term view, but my fear is that the Q1 numbers aren't going to look much better than the Q4 numbers," Tower Bridge's Ogg said.

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Re: S&P 500 Index Movements
« Reply #160 on: February 09, 2016, 07:59:19 AM »
Why Wall Street isn’t panicking about the stock-market tumble

By Anora Mahmudova
Published: Feb 8, 2016 4:15 p.m. ET

     108 
CBOE Volatility index at 26, above long-term average of 20
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Sharp swings in stocks are the new normal.

Moves of 1% or greater—instead of being occasions for panic—have a become a new paradigm for investors that, lately, has been met with relative calm.

Implied volatility, as measured by the CBOE Volatility Index VIX, +11.21% also known as the Wall Street’s “fear gauge,” was up by nearly 12% on Monday to a reading of 26, only slightly above the long-term average of 20. That’s even as 2016 stock losses have mounted. Through Monday, the year-to-date losses of both the S&P 500 SPX, -1.42% and the Dow Jones Industrial Average DJIA, -1.10% verge on 10%.


During last summer’s dramatic selloff, the VIX saw an intraday spike to above 50, closing at 40 on Aug. 24, the day the Dow was off by a stunning 1,000 points intraday.

But after weeks of turmoil, highlighted by the worst start to a year for U.S. stocks on record, investors may have grown inured to the roller-coaster ride. “After seven straight weeks of volatile action in the market, there is panic exhaustion. For investors, this is the new norm,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.

The S&P 500 SPX, -1.42%  has fallen in 12 of the past 24 sessions, with nearly all the down days involving declines of more than 1%. Only four of the “positive” days have included gains of more than 1%.

Read : Dow, S&P posts most 1% swings in January since 2008 meltdown

‘There is no big rush to sell — it’s gradual and painful but not panic-inducing so far.’
Randy Frederick, Schwab Center for Financial Research
Frederick noted that the VIX has been at elevated levels since last November and would need a big catalyst to spike further. “Lower volumes in February, compared to a spike in January, suggest that a lot of investors who wanted to sell or exit positions or rebalance already did that. There is no big rush to sell — it’s gradual and painful but not panic-inducing so far.”

According to Sam Stovall, U.S. equity strategist at S&P Capital IQ, more volatility is to be expected as a bull market ages. For example, since 1945, the seventh year in a bull market, on average, features 55 days with moves of 1% or more, up from an average of 43 days in the sixth year. Years 8 and 9 include even higher numbers of volatile days.

“Even though volatility is not a bull-market timing mechanism, it does suggest that we are well beyond the end of the beginning, and may be closing in on the beginning of the end,” Stovall wrote in emailed comments.

Whether we are exiting a bull market or entering a bear market, history suggests we should be prepared for more volatile days



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Re: S&P 500 Index Movements
« Reply #161 on: February 09, 2016, 08:14:31 AM »


Resist the urge to buy this stock-market pullback, says J.P. Morgan

By Barbara Kollmeyer
Published: Feb 8, 2016 12:10 p.m. ET

     52 
A buying opportunity is tough to see right now
Reuters
It is too soon to look for a bottom for stocks, at least over the medium term, Mislav Matejka, equity strategist at J.P. Morgan, and a team of analysts wrote in a note on Monday.

That buying opportunity is tough to see right now, even as the proportion of S&P 500 SPX, -1.42%  and European stocks SXXP, -3.54%  already in a bear market have increased to 40%, the analysts said.

Read: Stocks drop on global growth fears; Dow down 340 points


“This could lead to some knee-jerk bounces, but we note that in [2011], this ratio was as high as 60% and that was even without a recession materializing,” said Matejka. “In [2008], the ratio rocketed to 95%, more than double the current levels.”


Stocks in a bear market are on the way up
Last week, Wall Street stocks posted their worst weekly return in a month, driven by a selloff for tech stocks.

On Monday, the Dow industrials opened with a more than 300 point loss as investors continued to fret over oil prices CLH6, +1.72%  and the direction of U.S. monetary policy.

What’s needed for a “more sustained market rebound,” is more evidence of a stabilization in activity. ”We are not sure that this is upon us, and we in fact see rising evidence of weakness spreading in all the key regions,” Matejka said. They cited examples such as the U.S. loan officer survey that shows outright credit tightening for two straight quarters, jobless claims that are trending higher and then weak Chinese data flow. That is even as Europe isn’t leading the downtrend this time.

The analysts said the recent sharp selloff in the U.S. dollar isn't exactly a potential positive for risk assets because it is a direct result of weaker-than-expected U.S. data. And the interest-rate differential between the U.S. and the rest of the world remains extreme, which could keep the dollar firm. J.P. Morgan expects a 2.5% rise in the trade-weighted dollar from this point to the middle of the year.

In all, the analysts said they’d advise against looking for a market low and stick to stocks like telecoms and utilities, staying overweight defensive versus cyclicals.

Read: These ‘Buffet stocks’ are bargains in this beaten-down market

The comments echo prominent value investor Jeremy Grantham’s in his latest quarterly letter published this week. Grantham said the pullback for stocks investors have been seeing probably isn’t the big bear market that some have been looking for. “The most important missing ingredient is a fully-fledged blow-off,” he said.

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Re: S&P 500 Index Movements
« Reply #162 on: February 09, 2016, 01:51:09 PM »



Cramer: We're nowhere close to stocks bottoming
Abigail Stevenson   | @A_StevensonCNBC
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Jim Cramer couldn't find many positive signs in the market on Monday, which is why stocks ended in the red at market close. And when he went back to look at his market-bottom checklist, he realized stocks were nowhere close to bottoming.

"The list reminds us, first, why we are selling off, and second, what could put an end to the pain," the "Mad Money" host said.

When Cramer checked up on the status of his market-bottom checklist, he even ended up adding to it instead of reducing it.

No. 1 was clarity from the Fed. The Fed is in a bind because as the economy has slowed but employment hasn't. The Fed is worried that the economy will overheat, but there is no overheating. Cramer needs to hear from Janet Yellen that her plan for multiple rate hikes is off the table, or there will be more pain ahead.

No. 2 There needs to be resolution for political uncertainty. Cramer has no idea who the presidential candidates will be, and it seems that they have all hardened their stances against business.





A man pumps his own gas at a BP gas station.
Spencer Platt | Getty Images
A man pumps his own gas at a BP gas station.
"If we rally, you need to sell something, raise cash, and get ready for lower prices."
-Jim Cramer
No. 3 China needs to get better. At least its stock market is closed for the Lunar New Year. No check, just a respite.

No. 4 Commodities must bottom. "All I can say is that commodities are trying hard to put in a bottom, but it's too early to declare one," Cramer said.

No. 5 Oil needs to stabilize. Oil has been acting better, but it needs to stabilize.

No. 6 There must be improvement on geopolitical issues. North Korea was at it again this weekend with a rocket launch, so this box cannot be checked off, yet.

Read more from Mad Money with Jim Cramer

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No. 7 Zombie companies must be put to death. On Monday, Chesapeake Energy plunged 33 percent on fears that it could struggle to pay the $500 million in debt that it has when it matures next month. Cramer wants to watch this situation closely because it could cause major weakness for stocks.

No. 8 Relief from the strong dollar. Cramer was surprised to learn that because of a huge decline in the dollar versus the euro, the exchange rate is almost back to where it was last year. He's not ready to call an all-clear on this one, but it is getting close.

No. 9 More mergers and acquisitions. Nope. Not even close. There have been almost none.

No. 10 A return of a healthy IPO market. Again, not even close. "In fact, this is one of the worst times I've ever seen for new offerings," Cramer said. (Tweet This)

No. 11 Peaks in the economy. Cramer has been watching the stocks of cellphone makers, automakers and homebuilders for signs of a bottom to signal that peaks may not be for real. But the stocks just keep falling.

No. 12 Sentiment must become more negative. Stocks are down bad, but the Dow Jones industrial average still hasn't taken out January lows and isn't oversold yet.

No. 13 Sector leadership expansion beyond FANG. While Facebook, Amazon, Netflix and Google-parent Alphabet have definitely been lost, there is no leadership besides gold, which was not what Cramer wanted to see.

No. 14 Domestic companies must do better from low oil prices. Besides Clorox, no companies have experienced a break to their bottom line from cheaper gasoline.

Cramer was disturbed by the lack of progress when he reviewed this checklist. In fact, he even decided to add a new item to the list:

No. 15 Credit issues must be resolved. There are oil companies all over the place saying credit has become more difficult to get. At the same time, there is fear about European banks and credit issues they may have. This potential credit crunch could turn into a real issue if not resolved.

Until there are more boxes checked off, Cramer recommended only nibbling at the stocks of high-quality companies.

"If we rally, you need to sell something, raise cash, and get ready for lower prices," Cramer said. (Tweet This)

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

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Re: S&P 500 Index Movements
« Reply #163 on: February 10, 2016, 05:03:45 AM »



-1.5

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Re: S&P 500 Index Movements
« Reply #164 on: February 10, 2016, 05:46:20 AM »



1852.21


-1.23

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Re: S&P 500 Index Movements
« Reply #165 on: February 10, 2016, 06:46:37 AM »

Cramer: Fed could spark a long awaited rally
Abigail Stevenson   | @A_StevensonCNBC
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So far, this year has brought weak earnings, issues of valuation and stress in the oil patch. But unless the Federal Reserve provides clarity on where it stands with rate hikes this year, Jim Cramer said it is going to be very hard for the market to find a footing.

"When you drill down, the proximate cause of much of these problems comes back to the Federal Reserve and its compulsion to raise interest rates into a tumultuous environment," the "Mad Money" host said.

Janet Yellen is slated to speak on Wednesday, and that is when Cramer thinks investors will realize just how important the Fed is to this market.





Federal Reserve Chair Janet Yellen speaks during a news conference.
Jonathan Ernst | Reuters
Federal Reserve Chair Janet Yellen speaks during a news conference.
"There is so much that needs to go right for us to get a bottom in stocks, but I still think it starts with the Fed."
-Jim Cramer
The Fed is in a difficult spot right now because it is so analog. It analyzes the economy from the perspective of the unemployment rate. It isn't looking at it through the lens of anyone under 30 who is looking for a job or anyone over 50 who have been thrown out of a job.

And with the unemployment rate now under 5 percent, Cramer thinks the Fed may feel it must raise rates. It isn't considering the huge number of people that have left the workforce because they have given up.

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"Not only that, but this endless fixation on rising wages, without caveating the numbers by considering that so many states and cities have raised the minimum wage because it's a digitized economy, is ridiculous," Cramer said.

Cramer thinks states must take action, because it is too easy to crush a workforce in a shared economy. In fact, he considers the fixation with stopping the meager wages of the American worker as a justification for higher interest rates to be causing the Fed to turn a blind eye to what really matters.

Cramer knows that the Fed shouldn't only worry about the stock market. But the stock market is signaling slowdowns everywhere, perhaps because it recognizes that the Fed might act too soon in raising rates.

"There is so much that needs to go right for us to get a bottom in stocks, but I still think it starts with the Fed," Cramer said. (Tweet This)

So, stay tuned. Cramer thinks if Yellen gives clarity on Wednesday and confirms that the Fed will stay data dependent and it is too soon to raise rates — it could trigger the rally many have been waiting for.

Yellen is that important to the market's next move. It's all in her hands now


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Re: S&P 500 Index Movements
« Reply #166 on: February 10, 2016, 06:54:30 AM »


Opinion: Why U.S. stocks could post double-digit losses this election year

By Chuck Jaffe
Published: Feb 9, 2016 5:08 a.m. ET

     17 
Last year of a two-term presidency typically troubles the market
Getty Images
Bill W. was trying to calm his friends and neighbors when he spoke up at a current-events chat at the suburban Boston retirement community where he lives.

“Nothing too bad is going to happen to the market this year,” the 83-year-old former retired school administrator told a group of about two dozen senior friends and neighbors, “because this is an election year and the market always does fine in an election year.”

I asked the group who agreed with Bill’s assessment of what happens to the stock market during presidential election years and all hands went up.


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Combined, the people who had asked me to come chat with their investment/current-events group represented about 1,000 years of investment experience, and enough financial success to have moved to a comfortable pricey community where they all expect to live out their days comfortably no matter what the stock market or economy dishes out next.

The people in that room came to their conclusions about election years from practice. They averaged more than a dozen presidential elections per person.

But their faith that the market always does well in election years isn’t actually based on experience or market history, it’s mostly that they don’t remember any traumatic events coinciding with presidential campaigns.

While that view is correct, the idea that election years are always good for U.S. stocks is wrong, and investors who are waiting for the power of the election to turn the market around this year need to recognize that they could be in for disappointment and pain.

The last year of a two-term presidency has been down an average of almost 14% on the Dow and about 11% for the S&P 500
Here are the numbers I gave Bill and his friends:

According to the Stock Traders Almanac, election years used to be the second-best year of the four-year presidential cycle. That’s where the perception of the seniors at the meeting came from.

Since 1920, however, the eighth years of presidential terms have represented the worst of election years. While the Dow Jones Industrial Average DJIA, -0.08%  has posted an average gain of 4.8% in election years since then, the last year of a two-term presidency has been down an average of almost 14% on the Dow and about 11% for the S&P 500 SPX, -0.07%  , according to the Almanac, with losses in five of the last six times a two-term president was finishing up.

In fact, with the recent history of two-term presidents and their final year in office, the fourth year of the election cycle has been worst, on average, for the Dow dating back to 1941.

In other words, the investors haven’t had the kind of experience they assume happens in election years, meaning they should have even less confidence that there will be any election protection for the market in 2016.

Jeffrey Hirsch, co-author of the Almanac, called for two prospective scenarios during an interview this week on my radio show, MoneyLife with Chuck Jaffe.

There’s the “average election-year scenario,” where the Fed is right and energy and commodity prices stabilize and the market ends up with gains in the mid-single-digit range.

Or there’s the scenario where the market is already in a bear market, Hirsch said, that gets exacerbated by further declines in oil and commodity prices and more.

In short, noted Hirsch, “Election years ain’t what they used to be.”

And if you believe that past is prologue when it comes to election years, consider this statistic from the Almanac: In the last 16 presidential election years, 14 full years followed the direction of the first five trading days of the year.

The first five trading days of 2016, of course, represented the worst opening week in stock-market history.

If you don’t want to use a time frame as short as a week as an indicator, then consider that in 75 percent of those last 16 election years, the market finished the year moving in the same direction as it started for the month of January. January 2016 also was down.

None of this actually means that what Bill and his friends hold as true about election years is wrong, and that the market is due for a nosedive this year. The seniors in the current-events meeting didn’t think the election necessarily guaranteed profits so much as insulated them against a crash.

Still, the numbers suggest that investors shouldn’t think that the past is prologue for the future, especially when they are misinterpreting the past.

That’s particularly true this year, when the election scenario is anything but ordinary.

In many election years, the ultimate candidates are obvious by the time the Iowa caucuses are over, but the current election has enough possibilities that the market hasn’t yet factored in just which candidates ultimately have the inside track to the White House.

To this point, the market has ignored Donald Trump, presumably waiting for him to win something besides a poll.

At some point, however, the potential for a candidate to actually win office and effect the market will factor into the daily market volatility. If tweets from Hillary Clinton could tank biotech and pharmaceutical stocks last September, there’s little doubt that the ultimate candidates will inject more uncertainty into the process.

Said Hirsch: “The market is not really enamored by any of the prospects for the next resident of the White House.”

Just as investors should not be enamored with the market’s prospect for an election year; anyone who thinks that open polls wind up meaning up markets could be in for significant disappointment both in politics and portfolio

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Re: S&P 500 Index Movements
« Reply #167 on: February 10, 2016, 06:57:58 AM »



Here’s what technical analysts are saying about the turmoil in stocks

By Anora Mahmudova
Published: Feb 9, 2016 3:24 p.m. ET

     6 
‘Next target on S&P 500 is 1,600,’ says J.C. Parets
MarketWatch photo illustration/Shutterstock
Bearish pattern signals more pain
Some chart watchers say a recently completed bearish pattern could portend more pain for stock investors over the short term.

These technical strategists are pointing to a so-called head-and-shoulders pattern in the S&P 500 index SPX, -0.07%   that has formed over 15 months and was completed last week, as investors fretted about slowing global economic growth and as the U.S. Federal Reserve embarked on a path of normalizing monetary policy.

A head-and-shoulders pattern has three distinct peaks, with one peak in the middle, symbolizing the head, and two smaller peaks on either side representing the shoulders. Another component is the neckline, which is often defined as the trendline between the two troughs separating the head from the shoulders, as the chart below illustrates:



For chartists, a head-and-shoulders pattern typically signals that a bullish trend is about to go through a major reversal. This particular pattern began forming in May 2014, with the left shoulder resulting in a selloff in October 2014. The “head” took almost a year to form, culminating in the all-time high on May 21, 2015, when the S&P 500  closed at 2,130.82. The right shoulder consists of a 12% drop last August, a recovery that failed to hit record highs by a few points and the current selloff.

Technicians believe that breaking through the so-called ‘neckline’ completes the pattern and signals further downside, according to Frank Cappelleri, chief market technician at brokerage firm Instinet. He said the pattern that began forming more than a year ago is now complete.

How bearish could things get for the S&P 500 on the heels of this ugly chart formation?

J.C. Parets, founder of money manager Eagle Bay Capital and a prominent market commentator, suggests the index could fall a further 13%, based on the S&P 500’s level of 1,847 at midday Tuesday. “When [the pattern is] completed and confirmed, it dictates the price target. We think the next price target is 1,600 on the S&P 500,” he said.

Parets said he has been bearish about the stock market since stocks kept scaling all-time highs early last year. “It was a combination of deteriorating breadth and new record highs,” he said. The S&P 500 is down 13% from that record set in May.

By deteriorating breadth, Parets is referring to outsize gains from a handful of large stocks that masked weakness in the broader index. The S&P 500, which is market-cap weighted, finished 2015 down 0.7%, but on an equal-weighted basis, as measured by the Guggenheim S&P 500 Equal Weight ETF RSP, -0.30% stocks fell 4.3% in 2015.

Those big gainers for 2015 include so-called FANG stocks: Facebook Inc. FB, -0.21% Amazon.com AMZN, -1.24%   Netflix Inc. NFLX, +3.37% and Google parent Alphabet Inc. GOOG, -0.68% GOOGL, -0.45% Those stocks on average rose 82.7% in 2015. This year, those stocks are down more than 18% on average.

Looking beyond the S&P 500, some indexes already have moved into bear-market territory—commonly defined as a 20% drop from a recent peak.

The Russell 2000 RUT, -0.56% has plunged 26% from its June 23 peak. The Dow Jones Transportation Average DJT, +1.04% has been on a downward path since Dec. 29, 2014, falling 25% since then. The transportation sector is considered a leading indicator of economic downturns, and prolonged weakness in the index is seen as a sign of a slowing economy.

Opinion: What the oldest stock market index is saying now

Although the S&P 500 hasn’t joined those market gauges in bear-market territory, it is facing stiff headwinds. Technical analysts note that rallies over the past few weeks have been relatively small and have failed to stoke buying appetite.

“For the bottom to appear, the declines need to become smaller until buyers come back in and gradually begin buying again. Bottom is not in yet,” Instinet’s Cappelleri said.

The conventional wisdom calls for bargain hunters to step in and buy after prices have moved sharply over a short period without any justification, a condition known as an oversold market. But investor behavior since the start of the year hasn't quite followed the expected patterns, according to Katie Stockton, chief technical strategist at BTIG, another brokerage firm.

“What is the most troubling is the lack of reaction to oversold conditions. That felt like it was in 2008. Is there something we don’t know about? Something that is not yet in news headlines?” asked Stockton.

She remains bearish, expecting any bounce to be short-lived and weak.

To be sure, neither technical analysts nor fundamental strategists are able to call the absolute top and absolute bottom in real time. In fact, by the time some of the signals confirm such calls, it becomes almost too late.

But the chartists are forecasting more pain before a sustainable rebound.

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Re: S&P 500 Index Movements
« Reply #168 on: February 10, 2016, 07:07:05 AM »

What The Charts Say: "Complacent" Bulls Remain As S&P Support Under Pressure
Tyler Durden's pictureSubmitted by Tyler Durden on 02/09/2016 16:50 -0500

CBOE McClellan Oscillator Russell 2000 Value Line


 
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The S&P 500 is down 8.02% YTD through the first five sessions of February. This is the second worst start to the year going back to 1928 and the weakest since 2008, when the S&P 500 dropped 8.95% YTD through the first five days of February. This, as BofAML's Stephen Suttmeier details, compares to an average 1.16% gain for this period. The S&P 500 also has bearish signals for the Nov-Jan and January barometers. This is a risk for 2016.

We have made a case for a “sell into strength” tactical rally but the S&P 500 has not gotten much strength to sell. Many short-term indicators are becoming less supportive. The 5 and 10-day put/call ratios look complacent. Indicators that recently generated tactical oversold buy signals, such as the VXV/VIX ratio, Williams %R, the NYSE McClellan Oscillator, and slow stochastic, are rolling over. Both the 14-day Williams %R and McClellan Oscillator hit overbought before falling. Daily slow stochastic generated a sell signal below overbought on Friday.

The 5 and 10-day put/call ratios look complacent
Both the 5 and 10-day CBOE Total Put/Call ratios have dropped back toward the more complacent levels that coincided with the prior S&P 500 highs from early November and late December.



There is some room for the put/call ratios to move lower before hitting these complacent levels, but the put/call ratios are much closer to overbought or complacent levels than they are to oversold or fearful levels.

The rally for the S&P 500 from mid October through early November occurred with diminishing price momentum. Following this bearish divergence between the S&P 500 and daily slow stochastic (see red arrows below), buy signals on stochastic have preceded lower S&P 500 highs and sell signals have preceded lower S&P 500 lows.



Daily slow stochastic generated a fresh sell signal on Friday. The risk is for a lower S&P 500 low.

First support under pressure
We previously highlighted using the rising channel from January 20 as a guide for a “tactical” and “sellable” rally.



This channel came in at 1884 on Friday vs. an S&P 500 close at 1880. The channel rises approximately 6 points per session, which means that a failure for the S&P 500 to close above 1890.21 on Monday (2/8) increases the risk for a decisive break of the channel and perhaps 1872 chart support as well. This would expose the 1820-1812 lows. First resistance moves to 1917-1927. This is below the more important 1947-1950 resistance, where a break is required to put in a base for a stronger tactical bounce.

Weak VIGOR & most active A-D line say SPX risk below 1812
Tops for VIGOR, our longer-term volume model, and our US top 15 most active A-D line remain in place.



Both indicators continued to hit new lows last week to reflect a US equity market under distribution. New lows for these indicators increase the risk for new lows in the S&P 500 below 1812.

If SPX follows VIGOR & Most active A-D line, risk of top
Both VIGOR and the US top 15 Most Active A-D line show big tops.



In addition, tops for the Value Line Arithmetic, NYSE Comp, Russell 2000 and the S&P Midcap 400 are also potentially bearish for the S&P 500 (Chart Talk: 02 Feb 2016). In our view, this says that the S&P 500 shows risk below 1812 with the rising 200-week moving average at 1787 and the 38.2% retracement of the October 2011 to May 2015 rally at 1730.

We still are not ruling out a cyclical correction within the larger secular bull market with risk toward 1600-1575


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Re: S&P 500 Index Movements
« Reply #169 on: February 10, 2016, 08:20:26 AM »


炒定耶倫「放鴿」美股靠穩 大淡友睇瀉75%
02月10日(三) 05:09   

1:00



 
【on.cc東網專訊】市場仍然憂慮環球經濟陷入衰退,油價再次暴跌,令歐洲大型銀行恐爆煲的陰霾未散,加上有傳產油國之一的委內瑞拉或於本月內違約,希臘股市續處1990以來低位,均令美股受壓;臨收市前市場炒作聯儲局主席耶倫今日會「放鴿」,大市一度倒升後偏軟。

道指最終收報16,014點,下跌12點或0.08%,最低曾見15,881點,跌145點或0.91%;標指收報1,852點,下跌1點或0.07%,續創2014年4月以來新低,最低曾見1,834點,跌18點或1%;納指收報4,268點,下跌14點或0.35%,最低曾見4,222點,挫61點或1.43%。俗稱「恐慌指數」的VIX波動指數收報26.51,升1.96%。

道指成分股方面,銀行股仍受壓,摩通收市跌0.6%;高盛亦跌0.67%。油價急挫逾半成,埃克森美孚收市跌1.33%;雪佛龍收市更挫3.57%,為表現最差藍籌股。

有報道指出,美國雖仍未有迫切性實行負利率,但聯儲局已通知銀行準備,並要求進行壓力測試。

現時環球金融市場立立亂,據外國傳媒報道,產油國之一的委內瑞拉恐瀕臨破產邊緣。若真的成事實,金融市場勢更波動,因市場憂慮骨牌效應。據悉,該國本月底要償還15億美元債務,但該國整個銀行業只有15億美元,當中只有64%可動用,即約9.5億美元。換句話說,該國恐最快月底就要宣布債務違約。

另一方面,希臘股市已跌至1990年以來最殘,觸發市場憂慮。據外國傳媒報道,希臘下一波災難恐怕更難應對,因養老金問題恐令歐盟進退兩難!據了解,由於難民問題嚴重,如果歐盟不就範,希臘大條道理放難民入歐元區,歐盟將處於是否續救希臘的進退兩難局面。

著名「大淡友」、去年初已預言去年中會「熊派」當道,結果言中的法興首席策略師愛德華茲(Albert Edwards)於1月時接受外國傳媒訪問時直言:「如果我正確,美股將狂插75%!」

他的預言被視為瘋癲,現時卻獲該行同僚「肯定」,法興環球研究團隊主管Andrew Lapthorne指出,全球股市真的可以暴挫75%!主因是投資者或整調美股長期平均市盈率(PE)倍數,最壞情況下,市盈率倍數將由約30.8倍挫至約14.7倍,意味美股有60至65%下跌空間。另外,企業債務已到達頂峰,如果最壞情況出現,股市是可以骨牌式下滑。

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Re: S&P 500 Index Movements
« Reply #170 on: February 11, 2016, 04:58:55 AM »



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Re: S&P 500 Index Movements
« Reply #171 on: February 11, 2016, 05:46:59 AM »



1851.86


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Re: S&P 500 Index Movements
« Reply #172 on: February 11, 2016, 06:47:38 AM »


耶倫「鴿味」不足 道指曾升187變收跌99點
02月11日(四) 05:01   

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【on.cc東網專訊】聯儲局主席耶倫「鴿味」不足之餘,更對全球經濟前景偏向悲觀,令油價倒跌,繼而拖累美股,其中道指高低波幅約300點。有市場人士預言,除非聯儲局一反常態「放鴿」,否則美股跌市難終結。

道指收報15,914點,下跌99點或0.62%,最高曾見16,201點,升187點或1.17%;標指收報1,851點,下跌0.35點或0.02%,最高曾見1,881點,升29點或1.59%;納指收報4,283點,上升14點或0.35%,最高曾見4,369點,升100點或2.36%。俗稱「恐慌指數」的VIX波動指數收報26.47,跌0.26%。

道指成分股方面,銀行股仍受壓,摩通收市跌1.21%;高盛亦跌0.69%。油價再跌,埃克森美孚收市跌0.91%;雪佛龍則升0.07%。迪士尼收費電視業務欠佳,股價挫3.76%,為表現最差藍籌股。波音裁員,股價跌2.12%。

聯儲局主席耶倫重申,加息路徑將取決於經濟數據,但不認為有需要及很快就會減息。她透露,負利率面對法律授權的問題,不是隨意可以推出,在2010年時,該局已考慮過負利率,但當時認為不是更好的貨幣政策工具。

有「聯儲局通訊社」之稱的《華爾街日報》記者Hilsenrath表示,耶倫的證詞凸顯聯儲局3月將按兵不動。

歐洲太平洋資本行政總裁、有「華爾街預言家」之稱的Peter Schiff批評,美股近期下跌是因聯儲局主席耶倫!他說:「除非聯儲局完全投降,否則今次的熊市將會十分兇殘。要怎樣停止這次熊市?這完全要建基於聯儲局全面量化寬鬆(QE)。事實上,自2008年開始,每次市場調整,最終都是因聯儲局的行動而見底。聯儲局每次救市的招數不外乎減息、推出QE,或出口術將推QE。故此,華爾街早已上癮。」

Schiff預期,由於市場動盪,金價於2016年將上試每安士1,300美元;倘若聯儲局加速放水,最終將飆至5,000美元。

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Re: S&P 500 Index Movements
« Reply #173 on: February 11, 2016, 08:24:45 PM »



'I hate to say' selling going to continue: Gartman
Matthew J. Belvedere   | @Matt_Belvedere
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U.S. stock futures and oil prices were tanking again Thursday morning, and closely followed market watcher Dennis Gartman said he believes the selling is going to persist.

"I don't think there's too much selling at all. I think there's going to be even more selling going on," the founder and publisher of "The Gartman Letter" told CNBC's "Worldwide Exchange" Thursday. "Sovereign funds are in the process of liquidating. They have no choice."

In early trading, the Dow futures were off more than 300 points at one stage, U.S. crude was falling around 4 percent to under $27 per barrel, the 10-year Treasury yield was dipping to around 1.56 percent, and the dollar was down about 1.75 percent against the Japanese yen.

Read MoreDow futures plunge 300 points as Europe tanks

"I'm afraid it's going to get even worse. I hate to say that. There's not a good tenor to be found anywhere," Gartman said.

Against this backdrop, Federal Reserve Chair Janet Yellen goes back to Capitol Hill Thursday morning to testify on the economy and monetary policy on the Senate side.

Investors will look to see if she changes her tune from Wednesday's approach before a House panel, which combined a steady-as-she-goes account on interest rate policy with an acknowledgement of intensifying risks from markets and the slowdown in China.

Read MoreRound two in Yellen versus the bond market

But Gartman said Thursday: "The central banks I think at this point are as confused as is anyone else. I'm not sure anyone is going to look to central banks to be of great help right now."

The spiral downward in the markets is "margin liquidation," he said, with no indication when the selling might end.

"It will end when it ends," he said. "I've lived through many of these in 40 years of being around [markets]. Suddenly there's just an end to the selling, everyone looks around and realizes that the selling reached a tsunami-like ending. And you turn out."

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Re: S&P 500 Index Movements
« Reply #174 on: February 11, 2016, 08:26:53 PM »



The Fed won't be able to save stocks: Traders
Stephanie Yang
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As investors looked for clues in Fed Chair Janet Yellen's testimony Wednesday, stocks largely went nowhere, with the S&P 500 closing the day almost flat.

According to technician Jonathan Krinsky of MKM Partners, equities should continue to slide regardless of rhetoric on where interest rates are going next.

"We're less concerned about what she's actually saying," Krinsky said Wednesday on CNBC's "Power Lunch." "The market's telling you the central bank action is not having the impact it once was. In fact, you could argue that it's having a negative impact."

Because of this, Krinsky sees the S&P 500 running into an important support level around 1,812 to 1,820. If the index breaks below that level, it could be heading to 1,740 in the next few months, another 6 percent drop from where the index closed Wednesday.


Kathy Lien of BK Asset Management also pointed to a reversal in the U.S. dollar's rise on Wednesday as proof of the Fed's inability to impact markets. The dollar ended the day slightly down.

Read MoreFed's Janet Yellen: Not sure we can do negative rate; rate cut unlikely
"In general, central banks are losing control. The weakness of the dollar, the benign rally in stocks, reflect everyone's lack of confidence in the Federal Reserve," Lien said Wednesday on "Power Lunch."

Lien said the dollar should also play a large role in preventing the Fed from raising interest rates at its next meeting in March.

"The strong dollar is a very big headache and I think that's going to weigh heavily on the stock market going forward as well as the underpins of a weak global economy, which is the reason why they would not want to raise interest rates in March," she said

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Re: S&P 500 Index Movements
« Reply #175 on: February 12, 2016, 04:52:27 AM »




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Re: S&P 500 Index Movements
« Reply #176 on: February 12, 2016, 05:40:44 AM »



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Re: S&P 500 Index Movements
« Reply #177 on: February 12, 2016, 06:55:04 AM »


油組話救市 道指曾瀉411收市縮至254點
02月12日(五) 05:00   

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【on.cc東網專訊】市場憂慮全球衰退及央行技窮,聯儲局主席耶倫昨日被抨擊「鴿味」不足,今日隨即補鑊,重申不排除負利率,加上油價大瀉後,石油輸出國組織(OPEC)突稱會合作減產,令美股大玩「過山車」,在幾乎絕望下極地反撲,但仍連跌5日。「國際大鱷」索羅斯又發表言論,直言歐盟面歐解體。

道指收報15,660點,下跌254點或1.6%,最低曾見15,503點,瀉411點或2.59%;標指收報1,829點,下跌22點或1.23%,最低曾見1,810點,跌41點或2.26%;納指收報4,266點,下跌16點或0.39%,最低曾見4,209點,跌73點或1.72%。俗稱「恐慌指數」的VIX波動指數收報28.31,升7.68%。

美股跌幅之所以大為收窄,主要是阿聯酋能源部表示,石油輸出國組織(OPEC)準備好合作減產;非油組供應量可能每日減少最多80萬桶。消息帶動能源股,埃克森美孚收市升0.32%;雪佛龍僅跌0.06%。業績理想的思科飆9%,為表現最好道指成分股。波音帳目惹質疑,股價跌6.8%,為表現最差道指成分股。

聯儲局主席耶倫繼昨日後,今日繼續作證,她重申,正再次評估負利率政策,尚未完成評估,不排除實施的可能性,現在判斷經濟前景是否衰退還為時過早。她的言論似為昨日補鑊。

不過,美國最著名的債券管理機構太平洋投資管理公司(Pimco)表示,負利率是一個問題,不是解決方法。 Pimco指出,負利率直至現時為止,暫未見到能刺激經濟及通脹;相反,市場現時反而擔心負利率政策影響金融市場穩定,是一個絕望的試驗,蠶食銀行盈利,反令銀行流動性更緊縮。

除了「沽空中國」外,大鱷現時亦「看淡歐洲」!「國際大鱷」索羅斯認為,俄羅斯總統普京對歐盟的威脅程度,較恐怖組織「伊斯蘭國」(ISIS)更勁。他指出,美國和歐盟誤以為俄羅斯可能成為打擊「伊斯蘭國」的合作夥伴,其實普京現在的企圖是「推動歐盟解體,最佳方式是讓歐洲充斥敘利亞難民。」故此,索羅斯預計,歐盟注定解體。事實上,他早已表示,歐盟正處於崩潰邊緣。

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Re: S&P 500 Index Movements
« Reply #178 on: February 12, 2016, 07:08:31 AM »

财经  2016年02月11日
耶伦警告美国成长面临全球风险

161
耶伦警告美国成长面临全球风险
耶伦没有对美联储今年是否仍將继续升息表示意见。

(华盛顿11日讯)美联储主席耶伦周三的国会证词陈述稿指出,金融状况因股价下跌收紧,中国经济前途未卜,以及全球重新评估信贷风险,可能將美国经济拖离稳步增长的轨道。

耶伦的说法较去年12月她上次公开谈论时似乎更加忧心。耶伦在国会听证会上说,美国经济的前景有更多的乌云笼罩。

耶伦承认,全球经济中部分表现疲弱领域已开始出现自我强化的趋势,中国等制造大国成长疲弱,商品市场供应过剩让全球石油和金属出口商叫苦不迭。由此形成的全球成长放缓的普遍认知,以及中国问题究竟有多严重的不確定性,导致美国企业的融资环境收紧。

耶伦在美国眾议院金融服务委员会的证词陈述稿中称,「一旦证明上述情况短期无法改善,则可能拖累经济活动和就业市场前景。」

她没有对美联储今年是否仍將继续升息表示意见,但分析师说,她的担心降低了联准会在今年3月下次政策会议上再度升息的可能性。

美联社报导,耶伦说,国內外的风险可能影响美国经济成长和减缓联准会升息的速度。

不过,据路透社报导,耶伦表示,美联储將反转升息方向的可能性极微。

她说:「我不认为联邦公开市场委员会(FOMC)不久將面临必须降息的情况。」

欧洲和日本央行近来已先后採行负利率政策,希望为经济提供更多刺激。

耶伦说,美联储应该不会太快就走到需要降息的情况,「鉴于欧洲的经验,我们会观察、也应该观察,不是因为我们认为有理由实施,而是要知道有哪些工具可以动用。」


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Re: S&P 500 Index Movements
« Reply #179 on: February 12, 2016, 07:10:07 AM »

财经  2016年02月11日
联储局:美股跌是资產市场良性修正前兆

(华盛顿11日讯)美联储周三表示,美国金融体系为抵御不利因素做好了充分准备,股市下滑或正在让美国资產市场变得更为健康。

自美联储12月升息以来,標准普尔500指数已经下挫约10%,美国金融股受挫尤重,因市场担心银行的获利能力和资本实力。

美联储在提交给国会的半年度货幣政策报告中称,自2015年中期以来,美国的金融缺陷继续得到修復,部份因为金融危机以来推出的监管规定。

「监管规定对于大银行的资本和流动性比率要求处在纪录高位,短期批发融资的动用依然很低。」

美联储在报告中还称,美国最大的银行在石油行业以及新兴市场经济体方面的直接曝险「有限」,不过美联储也承认,现代金融的全球化特点可能带来更广泛的压力。

美联储也指出,美国资產价格大跌以及债务证券价格重新定价,已经使估值处于更健康的状態。

美联储称,整体资產估值压力已经减缓,而且一些令人特別担忧的领域最近已经降温,並指出投资级以下的债券风险溢价已经扩大。

美联储举出一例称,预期本益比目前更加接近过去30年平均水平


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Re: S&P 500 Index Movements
« Reply #180 on: February 13, 2016, 05:16:27 AM »



+36

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Re: S&P 500 Index Movements
« Reply #181 on: February 13, 2016, 06:22:02 AM »



1864.78


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Re: S&P 500 Index Movements
« Reply #182 on: February 13, 2016, 06:25:21 AM »



The majority of international markets are down
Mark Fahey   | @marktfahey
4 Hours Ago
CNBC.com
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If it seems as if the bottom is falling out of international markets, it isn't your imagination. Eighty percent of world markets were down over the past week.

Most stock markets in more than 60 countries have had a difficult week and two-thirds are down over the last two years. Greek stocks are at their lowest level since the 1990s, and the Nikkei in Japan has been closing in the red for over a week. (Some markets, such as Venezuela's, are up, but for all the wrong reasons.)

Of course, that's concerning — we live in a global economy and the world's markets tend to move together. But some markets tend to move along with the S&P 500 more than others. Based on our analysis of stock market data in each country, the nearest neighbors to the U.S. tend to move with the domestic market market with a correlation coefficient of over 0.6. (A perfect correlation would be 1.0, no correlation would be zero, and negative correlation would be -1.)

European markets are also closely linked to ours, but markets in Asia and Africa tend to be less correlated. Some markets are more likely to move opposite ours, with slightly negative correlation coefficients over the last two years. Here's the data for 62 world markets compared to the S&P 500 (as of Thursday's close):

-200
1200
Global markets looking glum
Colors represent change from two years ago — hoverand click for additional data.
+
-
Greece
Click on map to view other countries' markets
2/11/14
3/12/14
4/9/14
5/8/14
6/6/14
7/7/14
8/4/14
9/2/14
9/30/14
10/28/14
11/25/14
12/24/14
1/26/15
2/24/15
3/24/15
4/22/15
5/20/15
6/18/15
7/17/15
8/14/15
9/14/15
10/12/15
11/9/15
12/8/15
1/7/16
2/5/16
0
25
50
75
100
125
Mark Fahey/CNBC
Sources: FactSet, CNBC calculations. Correlation coefficients calculated for daily returns over the last 2 years. Market data for each country is indexed to 100 in Feb. 2014. Percent changes are as of close of the US market on Feb. 11, 2016. All foreign exchange changes are calculated using local currencies and the US calendar.
While the S&P 500 is still up a little more than half a percentage point over the last two years, the world excluding the U.S. is down about 10 percent, based on the MSCI World Index. The outside world is down more than 5 percent over the last week, with Asia losing 3.6 percent and Europe dropping more than 6 percent.

Looking at the daily performance by region, the world as a whole (excluding the U.S.) is moderately correlated with the S&P 500, with a correlation coefficient of 0.57. Asia is at 0.27, and the emerging and frontier markets of Europe, the Middle East and Africa are around 0.44. The Americas as a whole are nearly perfectly correlated.

But while the day-to-day movement may not be strongly correlated in Asian or African countries, the overall trends for all regions still tend to follow a similar path. It's easy for concerns over the future of those economies to drag the U.S. down, too

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Re: S&P 500 Index Movements
« Reply #183 on: February 13, 2016, 06:46:16 AM »



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The World's Top Performing Hedge Fund Just Went Record Short, Explains Why
Tyler Durden's pictureSubmitted by Tyler Durden on 02/12/2016 17:07 -0500

China Federal Reserve headlines Hong Kong Japan Kyle Bass Kyle Bass New Normal None Real estate Renminbi Reuters Trade War Yuan


 
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Last month, in our latest profile of the $2.8 billion Horseman Capital, we said that not only has that fund which some have called the "most bearish in the world" generated tremendous returns almost every single year since inception (except for a 25% drop in 2009 after returning 31% during the cataclysmic 2008), but more notably, it has been net short - and quite bearish on - stocks ever since 2012. In that period it has consistently generated low double-digit returns, a feat virtually none of its competitors have managed to replicate. In fact, its performance has put it in the top percentile of all hedge funds in recent years.

Furthermore, in a year most other hedge funds would love to forget, the fund "crushed it", with a 20.45% return for 2015 and 5.6% in the tumultuous month of December.

Today, we got Horseman's latest numbers and they are a doozy: in what was one of the worst Januarys in stock market history, the fund returned a whopping 8%, putting it in the 99%+ percentile of returns for the month (and the year).



 



Indeed, "crushing it" is hardly new to Horseman: it has been doing so for four years in a row, and not surprisingly, 2015 was its best year since 2008. 2016 is starting off just as good as the prior year.



How did Horseman generate another month of phenomenal returns? In its own words:

This month strong gains came from the short equity book, in particular from the automobile, real estate and EM financials sectors while the long portfolio incurred a loss.
This is what Horseman's sector allocation looks like as of this moment:

Headlines were made last year by the clampdown of the Chinese authorities on the Macau casinos, who had been allowing Chinese residents to move their winnings out of China. However, despite the clampdown and the following fall in casino revenues by some 34% in 2015 (source: Macau's Gaming Inspection and Coordination Bureau), capital outflows have continued via other channels.
 
Imports from Hong Kong to China jumped 64% year on year in December, but the same numbers released in Hong Kong showed a 0.9% increase (sources: China and Hong Kong customs data). This could be explained by the practice of over-invoicing of Chinese imports from Hong Kong with trading partners that agree to inflate the cost of goods before a letter of credit is issued.
 
Chinese companies were involved in foreign acquisitions worth a total of $656bn last year and already this year, four of the biggest cross-border deals have involved Chinese groups bidding for US and European assets worth $61.7bn in total (source: FT).
 
Over the past few years Chinese companies have issued a large amount of US dollar denominated debt (see Russell Clark’s market note entitled ‘Spotting property Bubbles in East Asia’), in 2015 they sold a total of $60.3 billion worth of dollar-denominated bonds, more than six times the 2010 figure (source: Thomson Reuters data). In August last year, as China’s monetary authorities gave the signal that the Renminbi was not immune to devaluations, companies started to reduce their dollar exposure. Recently China SCE Property Holdings Limited said that it would redeem its $350 million senior note due 2017, while another real estate company, SUNAC China Holdings Limited said it had completed the redemption of its dollar note due next year.
 
China’s currency reserves declined by $420bn over the past 6 months and in January they plunged by $99.5bn (source: PBOC). The fund maintains a short exposure to sectors exposed to a renminbi devaluation such as luxury brands and Chinese property developers, and to other Asian currencies that would also have to devalue, such as the Korean Won and Singapore dollar.
In other words, another adherent to the "China will blow up" philosophy, which it may, however unlike Kyle Bass and a cohort of other China-bearish hedge funds, Horseman is instead betting on select Chinese sector shorts, as well as China's currency devaluation although not by shorting the Yuan, and instead is bearish on the Won and the SGD.

What was the fund most bearish on? Pretty much everything, but a few sectors in particular:



However, what is most remarakable about the hedge fund, is that while it has maintained its gross exposure, as of January 31, the fund's net short exposure has risen to a whopping 76%, an all time high, even for one of the world's most bearish hedge funds.



 

Finally or those seeking to glean some wisdom from the Horseman's inimitable Chief Investment Manager, Russell Clark, here is his latest letter.

* * *

My wife and I went see to the “The Big Short” the other day. It was certainly very amusing, and explained difficult financial concepts well. I will put it up there in my top three finance based films, along with “Trading Places” and “Margin Call”. I found Margin Call to be the least appreciated of these films, and yet for me most closely matches up to life in an investment bank in the 21st century.

For those that have not seen it, the film centres on a junior risk analyst, who discovers that the potential losses on the bank’s holding of mortgage assets were larger than its market capitalisation. He immediately informs his colleagues, who then pass it onto senior management. One of the recurring themes of the movie, is that the junior low paid staff are all maths and excel spreadsheet gurus, and the upper management are luddites. The junior risk analyst shows his excel model to management, and is constantly told “You know I don’t like these spreadsheets, just tell me what’s going on”. The analyst is eventually introduced to the Chairman of the Board, who asks him to “please, speak as you might to a young child. Or a golden retriever. It wasn't brains that brought me here; I assure you that.”

If you were unfamiliar with the world of finance, you would think this grossly unfair. The brainboxes of the world toil endlessly, while their know-nothing bosses take home the big bucks. However, I think this is wrong. As the Chairman of the Board elaborates, the reason he earns the big bucks is, “I'm here for one reason and one reason alone. I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more.” The music in this case would be market prices.

The crux of the matter is that anyone telling you what the market is doing now, what the value of something is now, is providing you a freely available commodity; even if, in the cases of some derivative products, you need to be a rocket scientist to be able to give a valuation today. The real value add in markets is to be able to see what future values might be; that is to live in the future, not in the present.

I spend most of my time, while looking at current prices, thinking about and trying to live six months to one year in the future. Thinking about what will be the reaction to what is happening now, and then thinking about what that means future prices might look like. Generally that has worked well for me.

What I can see now is that US growth is slowing, and that the market is likely to price in reduced monetary tightening.

This should lead to a weaker dollar. This makes shorting Europe and Japan very appealing. Theoretically, this should make commodities and emerging markets (‘EM’) attractive, particularly if you are of the view that US dollar strength is the reason emerging markets and commodities have been so weak. However, I think we have chronic oversupply of commodities, and real financial issues in China that cannot be resolved easily. This makes commodity related areas very unattractive, despite the prospect of renewed monetary easing by the Federal Reserve. Furthermore, the reaction to reduced tightening by the Federal Reserve, would almost certainly be more easing by every other central bank in the world. But as we have seen recently with both the ECB and BOJ, monetary activism is not always effective.

I also worry about the prospects of a trade war, as populism becomes the new normal in politics globally. The future for me is now more uncertain than at any time I can remember. Or to fully quote the Chairman of the Board from Margin Call, “I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more. And standing here tonight, I'm afraid that I don't hear - a - thing. Just... silence.”

Your fund remains long bonds, short equities

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Re: S&P 500 Index Movements
« Reply #184 on: February 13, 2016, 06:50:18 AM »



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Raymond James Analyst Is Out With A Major Bearish Call
Tyler Durden's pictureSubmitted by Tyler Durden on 02/12/2016 16:15 -0500

Bear Market Central Banks China Elliott Wave Raymond James Robert Prechter Technical Indicators


 
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From Robin Landry of Raymond James

Since the last update the market has fallen to test the 1810 area as seen on the attached chart. The news and various indicators I use are getting more bearish. The world is drowning in debt and the central banks are showing themselves to be powerless to turn the economies of their respective countries around. Now they are moving to negative interest rates which only confirms my view of the world being in a DEFLATIONARY trend that has years to go. The talk of doing away with currency and moving to a digital currency is also showing the desperation. I believe a digital currency is coming much sooner that most people realize. The count shown in the attached chart is the one which gives a little larger view of where I believe the market is headed over the next few months if the top is already in. The rally happening, as I write this, is mainly due to the rally in oil. If the market is to make a new high, as I have suggested in earlier updates, this rally must break through the resistance in the S&P 500 around the 1950 area on increasing volume. If it fails, then the decline will drop to the 1740 area which I have repeatedly said MUST HOLD or the markets are in a MAJOR BEAR MARKET that will test the lows reached in 2009.



 

A Chief Investment Strategist that I have great respect for has always said that people don’t care whether things are good or bad but ARE THEY GETTING BETTER. The evidence I am looking at does not say things are getting better. THEY ARE GETTING WORSE!!! I have been in the investment business for over 40 years and have found that the charts of the various markets tell me what is going on in the longer term. I have repeatedly said that the Central Banks and the various Governments CAN change things over the short to medium term but THEY CANNOT CHANGE THE LONG TERM.  Cycles have always existed and while they may be skewed to the left or right for awhile they ultimately happen until they are finished.

In Graduate school I took a Humanities course which I hated and was one of the few which I did not make an A in. Life is funny because that course taught me something which has turned out to be one of the most eye opening things I have experienced so far in my 69 years of life and my 40 plus years in this business.

The book used in that course was a book about Civilization.  It outlined the dominance of Eastern and Western countries and how the Dominance changed every 500 years with a smaller 250 year cycle inside that where the major country in that hemisphere also changed. For example, the dominant hemisphere over the last 500 years has been the West. For about 250 years it was Great Britain, then it has been the United States. Now it is time for it to swing back to the East and we can easily see that happening every day in the news. China appears to be the next leader in the world, at least the way it looks now. You might ask what does that have to do with the stock market? Everything!! While the change does not happen overnight, it does happen and involves great turmoil. I got interested in cycles after reading that book in the Humanities class and wrote my Master’s thesis on the stock market. In that process I ran across the Elliott Wave theory. It allows one to map, as best as I have ever found, where we are in cycles at various degrees. One of the things that stands out in the study of cycles is that approximately every 80 years or so there is a Depression and then every 250 years an even greater change which I call a revolution. I believe that is what we are in the very early stages of. In the revolution cycle governments fall and new one’s rise. Look at all the changes going on around the world with everything changing in ways many of us would have never dreamed unless we had studied History and Cycles.

I won’t attempt to explain the Elliott Wave theory in this update. Robert Prechter along with A.J. Frost have written a book titled “Elliott Wave Principle” and explains it far better that I ever could. Elliott Wave International’s website is www.elliottwave.com. There you can find his book, newsletter’s and other materials if you want to learn more. The reason I bring this up, I have said in recent Market Updates that if we have already topped out in the stock market, then the market decline will be the biggest one anyone alive has ever seen and the result will be changes in every aspect of life that few people have ever dreamed of. It has been said that because the wave structure pattern can be very subjective that you can have 3 experts in Elliott Wave in the same room and have 3 different opinions. I have worked to take as much of my own opinion out of my analysis by using various technical indicators others have created over the years to help me determine where we really are in the wave structure.

I have expressed my opinion that we are in a large Cycle wave 4 correction and once it is finished a final 5th wave up to new highs will happen before the big downturn starts. Very few other EW technicians agree with me and think the top is already in and the downturn has already started. That is why over the years I have shown charts with my preferred count and my alternate count. What my personal opinion is does not matter. What does matter is what does the wave structure and the technical indicators say. They are telling me we are at a critical juncture. There are numerous supports from the recent low around 1810 down to the 1740 area which I IMHO believe will determine what the true count is. I am hoping for the best but also trying to prepare for the worst. I could go on for hours explaining all the things which tell me why I believe this support area is so important but I do not have the time and my typing skills are almost nonexistent

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Re: S&P 500 Index Movements
« Reply #185 on: February 13, 2016, 06:52:22 AM »



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Martin Armstrong Warns "Systemic Risk Is Rising For All Markets"
Tyler Durden's pictureSubmitted by Tyler Durden on 02/12/2016 15:30 -0500

Bond Deutsche Bank goldman sachs Goldman Sachs Great Depression Martin Armstrong Yen


 
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Submitted by Martin Armstrong via ArmstrongEconomics.com,

We are on the precipice of what can only be described as a rising systemic risk for all markets. The Fed is now hinting that banks should prepare for NEGATIVE INTEREST RATES. This insanity of following the crowd is undermining the entire world economy. The increasingly unstable footing that we find ourselves standing on is reflected in widening credit spreads that demonstrate that CONFIDENCE is indeed collapsing.

The EU Commission will no longer classify government bonds in bank balance sheets as “risky.” Banks would have government bonds on par with “equity” yet government bonds have proven risky and are inferior to what would, in some financial institutions, result in an increased capital requirement.
 
Turning to Goldman Sachs, we saw the so-called world’s greatest trader close out its long USD trade against a basket of euros and Japanese yen with a potential loss of around 5%, which is being bantered about on the street showing they too got this all wrong. This early 2016 destabilization is stopping out short gold positions, but it is not replacing them with any buying conviction. The euro trade of long Italian 5-year against short German 5-year has also turned into a bloodbath as the euro finally rallied begrudgingly to reach our first resistance target in the mid-113 area.
 
Global economic growth has been anemic at best; and in the US it is clearly turning down since Q3 2015.
This new world order of NEGATIVE INTEREST RATES is so insane and focuses solely on trying to stimulate borrowing. This is undermining pensions for the elderly and creating the economic storm of the century that is on the horizon that will be far worse than the Great Depression of the 1930s. Even the Japanese 10-year bond has gone NEGATIVE, demonstrating the total collapse in CONFIDENCE.

Why, you ask?  Because this time, the defaults will engulf all governments at all levels. Like a drunk who just won the lottery, all is always lost in a matter of time.

Bankers in German and Italian banks are looking rather pale in the face. The question is: will the ECB bail out Deutsche Bank or let it fall?

Bailout-R

They will probably blink and this will be part bailout/bail-in. They have no way out of this mess created by the euro without surrendering their own power. We are looking at a European credit crunch beginning in the periphery and spreading to the core, just as we are looking at the emerging market debt imploding and spreading to the rest of the world.

The Fed now sees the external threat as systemic and is considering abandoning domestic policy objectives for international policy objectives precisely as they did in 1927, which created a major crisis

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Re: S&P 500 Index Movements
« Reply #186 on: February 13, 2016, 02:20:59 PM »

Is it really 2008 all over again?

By Lawrence G. McMillan
Published: Feb 12, 2016 7:44 a.m. ET

     48 
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The broad stock market, as measured by the S&P 500 Index (SPX) is exhibiting some traits and movements that are very similar to those that existed in early 2008. Let’s look at those and then also review the current spectrum of indicators that we follow.

In early January, we wrote an column for this web site entitled “Santa Claus failure bodes poorly for the new year.” That turned out to be an understatement. That was partly based on the fact that there had been similar Santa Claus rally failures in 2007 and 2015.

The market action in early 2016 is very similar to that of early 2008. In both years, the market broke down badly, almost in a freefall, and bottomed just after Martin Luther King Day. And in both years, the January Seasonal bullish period at the end of the month of January produced a positive result. Immediately after the Jan Seasonal ended, the market began to fall again — in both years.


Also, in both years, the VIX didn’t really get too excited — barely reaching 30, and only for a brief period of time, at that.

So what comes next? In 2008, the SPX didn’t penetrate the January closing lows during February, but in March it did, and it went all the way down through the January lows — albeit briefly. The making of new lows also brought on new highs on the VIX. That seemed to be a bit of a washout, and from there, the SPX staged a two-month rally into May. After that, of course, a more serious selloff occurred — breaking to new lows in July. In the fall, the severe bear market followed.

I’m not saying the rest of the year will unfold in the same way, but the near-term action has been holding rather true. If that remains the case, the SPX will take out the 1810 lows in the near term, before finally embarking on a rally that might last for several weeks, or a couple of months.

The SPX chart is decidedly negative. There is resistance at 1880 (Wednesday’s high), 1940 (the peak of the January Seasonal rally), and 1980.


Support levels continue to be broken. In late January and early February, the SPX bottomed near 1870 several times in a 10-day period. But then that level was broken, and a temporary support level was created earlier this week in the 1830-1835 area. That level has now been breached, and the SPX is testing 1810 again. The 1810 area is important because it is not only the January 2016 lows, but it is also the lows of October 2014 and April 2014. If that level gives way, the next support level is 1740, which is the February 2014 low.

Despite the negativity of the SPX chart, the put/call-ratio charts are turning bullish. These ratios have risen to and above the heights of last October, thereby getting into deeply oversold territory. They are now rolling over, and that indicates buy signals. The weighted equity-only put/call ratio is usually a very reliable indicator, and the fact that it is turning bullish as least gives some hope for a short-term rally.


Other indicators, though, have failed to register buy signals. Market breadth has been terrible for a long time, and nothing has changed recently. Both of the breadth oscillators that we follow are on sell signals, and they are in deeply oversold territory too. It would likely take at least two consecutive days of strongly positive breadth in order to roll these over to buy signals.

Volatility derivatives and indices have been something of a conundrum. Considering the depth and speed of the broad market decline since the first of the year, I would have expected the VIX to rise much more sharply than it has.

During the decline last August, the VIX exploded toward 50 intraday, and closed above 40. This time there hasn’t been anything like that. In January, the VIX probed above 30 intraday a couple of times, but never closed above 28.

There are a couple of schools of thought as to why this has happened. One is that traders already have protection in place, and thus don’t need to buy SPX puts or VIX calls now (aggressive SPX put buying drives the VIX higher). The other is that traders are complacent and still aren’t convinced of the need to own protection. I am more inclined to agree with the second premise — that traders are complacent. That’s not good for the health of the stock market in general.

The trend of the VIX is higher, and that is bearish for stocks. In my opinion, the VIX will be in an uptrend unless it closes below 20. That could happen (a close below 20), but it doesn’t seem likely in the short term.

Many of the individual CBOE Volatility Indices are nearing short-term buy signals in one way or another. If the VIX forms a spike peak, that would be a buy signal. Also, if the VIX closes below VXV (the 90-day Volatility Index), that would be a buy signal. Finally, if VXST (the Short-Term Volatility Index) closes below all of the other CBOE Volatility Indices, that would be a buy signal, too. These potential volatility-index-based buy signals are all short term in nature. Most of them gave buy signals in late January, which were effective, but only for a very short-term rally that did not last.

Oversold rallies usually fail at or just above the declining 20-day moving average, and that was certainly the case with the oversold rally that occurred at the end of January this year.

The construct of the volatility products continues to have a negative connotation. The VIX futures are all trading at discounts once again, but the most damaging aspect is that the term structure continues to be negative — especially in the VIX futures. The fact that this downward-sloping term structure has persisted for most of this year is quite bearish. For years, the term structure sloped upward and the market generally continued to go higher. But that is no longer the case, as this downward-sloping, persistent term structure seems to be indicating that this is a longer-term bear market.

The put/call ratios are positive, and they are normally powerful. Several other short-term buy signals could occur, too. However, in the short term, the market is obsessed with oil, Yellen, the yen, the two-year note, etc. As a result, it may be necessary to see short-term oversold conditions build up again, to the point where they can exhaust some of the selling. In line with our thinking that early 2008 and early 2016 are very similar, it may be necessary to violate the January low (1810, in the current year) before finally setting off on a more sizeable rally. In any case, the longer-term outlook remains bearish.


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Re: S&P 500 Index Movements
« Reply #187 on: February 13, 2016, 09:44:18 PM »



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02月13日(六) 05:00   

1:00



 
【on.cc東網專訊】市場憧憬石油輸出國組織(OPEC)今次真的會合作減產,刺激油價狂飆逾10%,創2009年2月以來最勁升幅,加上摩通行政總裁斥逾2,600萬美元增持股份,挪威主權基金亦增持瑞信,帶動金融及能源股大反擊,美股全日做好,結束5連跌。市場對後市眾說紛紜,有技術大師預言美股2至3日內見底;大行則憂慮熊市漫漫。

美股以近全日最高位收市,道指收報15,973點,上升313點或2%;標指收報1,864點,上升35點或1.95%;納指收報4,337點,上升70點或1.66%。俗稱「恐慌指數」的VIX波動指數收報25.4,急跌9.74%。總結本周,道指仍累跌1.4%;標指跌0.8%,納指跌0.6%。

美股勁升,多得能源及金融股,埃克森美孚收市升1.8%;雪佛龍亦漲2.94%。高盛收市升3.87%;獲行政總裁大手增持的摩通勁升8.33%,雙雙成為表現最好的首兩隻道指成分股。

後市方面,大行與著名技術大師看法分歧。美銀美林發表最新報告標題為《量化肥佬了》(Quantitative Failure),指出自2008年金融海嘯以來,全球已泵了12.3萬億美元,但成效已失去,直言情況已差過2008年,相信與1998年長期資本管理公司(LTCM)危機相近,並有1937年聯儲局過早閂水喉而引發大蕭條的影子,以及似日本1990年代的通縮旋渦,料標指短期跌穿1,800點,但難言見底,呼籲投資者多持現金或黃金。

不過,自2013年開始不斷估中A股及國指大跌市的著名技術分析師迪馬克(Tom DeMark)表示,相信美股近見底,標指或於未來2至3日內找到底部,底位約1,797點;油價亦會於1至2日內見底。

一直看淡環球經濟的「債王」格羅斯仍保持其淡友本色,坦言全球已進入了「經濟新常態」。他表示,在新常態下,當名義國內生產總值(nominal GDP)跌至-3%,就可界定為經濟衰退,而美國去年第4季名義GDP是-2.9%。故此,他警告已進入衰退了。

面對市場動盪及憂慮衰退,聯儲局暫仍不為所動,該局「第3號人物」的紐約聯邦儲備銀行行長達德利稱,美國當前貨幣政策的寬鬆程度合適,談論負利率仍言之尚早。

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Re: S&P 500 Index Movements
« Reply #188 on: February 15, 2016, 07:26:07 AM »




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Home
"Killer Wave" Confirms Big Bear Market Looms
Tyler Durden's pictureSubmitted by Tyler Durden on 02/14/2016 13:45 -0500

Advance-Decline Bear Market China Dow Jones Industrial Average Equity Markets Market Bottom Market Breadth NASDAQ Nikkei Rate of Change Russell 2000


 
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Excerpted from James Stack's InvesTech.com,

Technical Evidence: Confirming a bear market

 It’s been 26 years since we developed our Negative Leadership Composite (NLC) to help identify the best buying opportunities, as well as the highest risk markets. It’s pure common sense that broad upside leadership (and absence of downside or negative leadership) signifies or confirms a new bull market. It usually does the same for second or third bull market legs. This is shown when a bullish “SELLING VACUUM” [*1] appears in the NLC. Conversely, broad and increasing downside leadership –shown by “DISTRIBUTION” [shaded region *2]– will always confirm high risk early in a bear market by dropping to -100.

Our challenge, at times like this, is distinguishing whether “DISTRIBUTION” might be caused by temporary factors, which was the case three times in the current bull market – the Congressional showdown over the debt limit, the market’s Fed “taper tantrum,” and the oil price collapse over a year ago. Judging by the depth, duration, and broadening sector contribution to the “DISTRIBUTION” in leadership, we must conclude that Wall Street is currently in a bear market.

 





 

The run up in margin debt has also become an increasing concern in the past few years. This represents “hot money” borrowed to buy stocks on margin… that will likely panic as selling in a true bear market progresses.



 

Note that past peaks in margin debt have coincided with, or led, peaks in the stock market. That was also the case a year ago when margin debt peaked a month before the blue chip indexes. But as we’ve pointed out, the final peak cannot clearly be identified until margin debt falls enough to make new highs or peaks unlikely. Based on the volatile, high volume down days we’ve experienced since the start of this year, we anticipate margin debt may confirm a bear market when reported later this month by tumbling decisively through the support levels of the past 18 months.

Two (almost three) major U.S. indexes already qualify as bear markets…

Investors might be surprised to learn that most foreign stock markets –including London’s FTSE (Financial Times Stock Exchange) Index, the German DAX, and Tokyo Nikkei– are all off more than 20% from last year’s highs. China’s Shanghai Composite has tumbled 46% from its peak last June.



Globally, one of the safest places to be has been in solid blue chip stocks in the U.S. The S&P 500 Index and Dow Jones Industrial Average are approximately 13-14% off their peaks last May. Meanwhile, the Nasdaq Index is within several percentage points of hitting the -20% threshold of qualifying as a bear market.

By comparison, the Dow Jones Transportation Average is already in bear market territory with a loss of -24%. And the premier small-cap Russell 2000 Index has tumbled over 25%.

In summary, the bear market damage to many investors’ portfolios has already proven significantly more severe than what is portrayed by the more resilient blue chip DJIA and S&P 500. Even within the S&P 500 Index, over 60% of component stocks are down 20% from their 12-month highs, while 37% are down more than 30%!

We also find little to cheer about in market breadth or participation. The Advance-Decline Line, which showed a bearish negative divergence with the S&P 500’s secondary peak in November, continues to weaken with –or ahead of– the blue chip indexes.



When the majority of “troops” are in retreat, it can become increasingly difficult for the “generals” to stand their ground. Without a measurable improvement in breadth, we believe this market will continue to struggle in the coming weeks and months.

More bad news...

The Coppock Guide, which has been weakening for almost 2 years, is now confirming a bear market. That’s bad news for the market in the near-term, but has positive implications down the road. This important indicator was developed more than 50 years ago by Edwin S. Coppock and has often been described as “a barometer of the market’s emotional state.” As such, it methodically tracks the ebb and flow of equity markets, moving slowly from one emotional extreme to the other. By calculation, the Coppock Guide is the 10-month weighted moving total of a 14-month rate of change plus an 11-month rate of change of a market index. While that sounds complicated, it’s actually an oscillator that reverses direction when long-term momentum in the market peaks in one direction or the other.

Historically, the value of the Coppock Guide lies in signaling or confirming low risk buying opportunities that emerge once a bear market bottom is in place (black dotted lines on the graph below). And since market bottoms are typically sudden V-shaped reversals, it works amazingly well – as it did shortly after the bottom in 2009.



Unfortunately, the Coppock Guide is generally not as useful in identifying market peaks. One reason is that bull market tops are usually slow, rounding formations in which momentum –and the Coppock Guide– peak up to a year or more ahead of the market. Yet there are certain instances when it has proven invaluable at a market top…

In the late 1960s a technician named Don Hahn observed another phenomenon about the Coppock Guide. When a double top occurs without the graph falling to “0” –a phenomenon that Hahn referred to as a “Killer Wave”– it confirms an extended bull market where psychological excesses can reach extremes. In those situations, the appearance of a second peak generally means a bear market has just begun or is not far off (see red dashed lines). The late 1990s was an exception.

Killer Waves are rare, and they can be dangerous. This is only the 8th bull market in the past 95 years to see a double top in the Coppock. The table at right shows that in 5 of the previous cases the second peaks were associated with the start of the more notorious bear markets of the past century: 1929, 1969, 1973, 2000, and 2007.



The Coppock Guide is now projected to drop through “0” in February, which in the past carries over a 75% probability that a bear market has taken hold. Of course, that does not mean the bear market will soon end, and it would be foolish to attempt to second guess when or where the Coppock might bottom. But the more important message for defensive investors is this: Once the Coppock Guide does hit bottom and turns upward –by even 1 point– we will be presented with one of those historical buying opportunities that comes around only once or twice a decade. We can’t rush it… and we certainly can’t forecast it… but we can look forward to it and quickly recognize it when it does occur. So be patient, stay defensive, and remember that there is light at the end of the tunnel

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Re: S&P 500 Index Movements
« Reply #189 on: February 15, 2016, 08:43:53 AM »


Fight or flight? Threat of black swan events spooks investors
Andrew Osterland, special to CNBC.com
Wednesday, 10 Feb 2016 | 8:00 AM ET
CNBC.com
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Black swans, it turns out, are not that rare a bird, after all. In Australia and New Zealand, there are hundreds of thousands of them. Imported by private collectors, black swans have also spread to the wild in the United Kingdom and are bullying their white (also called "mute") swan cousins for territory.

In the investment context, "black swan events" may also be less rare than formerly thought. The concept, popularized by New York University professor — and former derivatives trader — Nicholas Nassim Taleb, is intended to describe unexpected events that have very big consequences. They don't have to be negative, but they do have a profound effect on the economies and markets they disrupt.


Mayo5 | E+ | Getty Images
Usually, black swans in financial markets are meant to refer to big, bad panics characterized by massive waves of selling. Asset prices formerly thought to be uncorrelated fall en masse, and liquidity evaporates. In other words, something like 2008.

"These are extreme events characterized by massive outflows from all risky assets, creating a systemic financial crisis," said Roger Aliaga-Díaz, a senior economist with Vanguard's investment strategy group. "All risk assets tend to perform poorly, and there's a general flight to quality by investors."

With a bona fide black swan in our recent past, it's a fair question to ask whether others could be lurking in the weeds. Is the increase in volatility this year a prelude to a bigger fall in the markets? What might trigger a more severe loss of confidence, and how — if at all — can investors protect themselves from such a scenario?

Answers are hard to come by. Black swans, by definition, are hard to predict and typically cause a major shift in the prevailing perceptions of investors. Neither market analysts nor media outlets are likely to be reliable guides for when and where potential black swans might emerge again.

Businessman at fork of stone pathway in water
Investors keen to cut risk amid market turbulence
"Black swan events are things you don't imagine as you're going into them, but they seem logical in hindsight," said Wesley Phoa, a fixed-income portfolio manager at Capital Group, manager of American Funds. "Our job is to try to imagine what those things might be and to come up with game plans to deal with them."

A shortlist of potential events that Phoa thinks could cause major volatility in financial markets include the following:

A major devaluation of the Chinese yuan (likely sparking a wave of other currency devaluations).
The imposition of more draconian capital controls by Chinese policymakers.
The default of Petrobras, the giant energy company majority owned by the Brazilian government.
The U.K.'s votes to leave the European Union sometime this year or next.
A war between Saudi Arabia and Iran.
Any and all of these events could seriously affect investor sentiment across global markets and reduce their appetite for risk. Other political or economic developments could wreak similar havoc.


Whether they provoke a wholesale repricing of risk by the markets, however, depends as much on the environment as the event itself. "You have to think about not just what can go wrong but what kind of contagion it might cause across markets," said Phoa.

Leverage is almost always a key factor exacerbating panic in financial markets. As asset prices fall, leverage magnifies the losses and force institutions and investors to sell other assets in their portfolios.

The cascading effect can drive down the prices of even high-quality assets that would normally be considered safe havens for investors.

The situation gets much worse when the leverage is poorly disclosed or hidden. The growth of the "shadow banking" system in the early 2000s is arguably the biggest reason for the failure of the banking industry in the financial crisis.

Yuan China
Beijing's bumpy ride: Gauging China's ups, downs
Trillions of dollars in loans were extended by banks in "off-balance sheet" transactions that were never disclosed in their public filings.

The financial system in developed markets today is far more stable than it was prior to the crisis. The Dodd Frank Act may have deserved the criticism about regulatory overreach, but it has helped put the banking system on more solid footing.

The reserves of banks in the U.S. and euro zone are significantly higher, and leverage is significantly lower. "We've paid for it in terms of economic growth and flexibility, but systemic risk in the financial system has gone down a lot from pre-crisis levels," said Phoa.

It hasn't disappeared, however.

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The two areas most commonly cited as potential breeding grounds for the next black swan event are China and the uncertain outcomes of the ultraloose monetary policies in developed world markets.

The slowdown of the Chinese economy has been a source of concern for global investors for years. The emerging markets, with China as the linchpin, account for more than 50 percent of global domestic product now, and if the Chinese economy is slowing more dramatically than anticipated, the global economy will suffer.

Of late, however, the problem isn't just that the economy is slowing — and likely at a much faster pace than official stats suggest — but that Chinese policymakers are stumbling in their management of it.

The erratic behavior of government policymakers still learning to live with the often-erratic behavior of free markets has shaken the confidence of investors in China's commitment to reform its markets and economy.

Global economy
When China sneezes, Europe markets could catch cold
The government remains obsessed with setting and meeting growth targets and maintaining controlled currency-exchange levels. While it still has enormous foreign-exchange reserves, the Chinese government will be hard-pressed if capital outflows — $500 billion last year — accelerate further.

"Chinese policymakers are juggling a lot of balls now," said Vanguard's Aliaga-Díaz. "The quality of their policy and the communication of it to the markets is not the same as here."

The contagion that accompanies a black swan event is often a result of a major misread of a widely accepted belief. The more we believe in the illusion of control, the more vulnerable we are to losing it in catastrophic fashion. If the central planners in China continue to try and control their economy and resist market reforms, things could get very messy.

The issue of control also arises when it comes to the monetary policies of developed markets. In December the U.S. Federal Reserve ended its zero rate policy of the last seven years, but the real rate of return for risk-free assets has been negative since the financial crisis.
"When prices come down and spreads widen out, it fosters an environment for investors to do better, not worse."
-Jay Leopold, head of U.S. investment risk at Columbia Threadneedle Investments
While few economists would argue with the Fed's ultra-accommodative policy when the financial system was on the verge of collapse, the return to a more "normal" monetary policy is now fraught with uncertainty.

There is also the Fed's multitrillion-dollar securities portfolio amassed in the QE programs that sits like a giant blob astride the market. What happens if and when the Fed decides to stop reinvesting the funds from maturing bonds back into the market?

"We have no data points to suggest what could happen," said Jay Leopold, head of U.S. investment risk at Columbia Threadneedle Investments. "This has been unprecedented monetary policy."

He added, "It's a classic example of an environment that's difficult to model. We're in uncharted territory."

Interest rates
Uncertain liftoff as short-term rates start rising
Black swans are scary things, but if avoiding them were investors' sole concern, they would never put their money in the markets. "I'm a bond guy; my job is to worry. But if you spend too much time dwelling on the negatives, you become overly conservative," said Phoa at Capital Group.

The uptick in volatility over the past six months is a good reminder that investing involves risks, and it may be a form of inoculation against a more acute loss of confidence in financial markets.

"The volatility today is creating opportunities for more reasonable rates of return on risk," said Leopold at Columbia Threadneedle Investments.

Like all good financial advisors, Leopold suggests investors diversify their risks and stick to their investment process.

"When prices come down and spreads widen out, it fosters an environment for investors to do better, not worse," he said.

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Re: S&P 500 Index Movements
« Reply #190 on: February 15, 2016, 10:50:59 AM »



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字級設定: 小 中 大 特
美銀下修標普500展望近一成,避險基金積極加碼作空
回應(0) 人氣(57) 收藏(0) 2016/02/15 09:38
MoneyDJ新聞 2016-02-15 09:38:01 記者 陳瑞哲 報導
美股今年出師不利,標普500指數前六周跌掉近9個百分點,市值累計蒸發超過2兆美元,反映中國經濟形勢險峻和美國企業獲利前景堪憂,也導致越來越多人跟進下修美股展望甚至加碼做空進行避險。

美銀(Bank of America)上周五下修標普500指數目標價,成為最新下修美股展望的華爾街銀行。美銀預期標普500指數2016年末將來到2000點,雖然高於上周五收盤價7.7%,但較前一次預估值低9%,且意謂著美股將連續兩年收低。

另外據路透社報導,美國明星對沖基金操盤人羅布(Dan Loeb)已告訴客戶,面對全球股災,旗下基金已採防禦性策略,並大幅增加空單的佈局。在此同時,羅布還透露已減少對中國與原物料曝險過高企業的持股。

羅布的對沖基金規模達175億美元,他在致投資人的信上表示,截至目前為止,對股市放空的部位已逼近45億美元,占基金資產比重的25%。羅布是在去年開始放空美股,他表示這個決定使得客戶資本得以保全。

*編者按:本文僅供參考之用,並不構成要約、招攬或邀請、誘使、任何不論種類或形式之申述或訂立任何建議及推薦,讀者務請運用個人獨立思考能力,自行作出投資決定,如因相關建議招致損失,概與《精實財經媒體》、編者及作者無涉


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Re: S&P 500 Index Movements
« Reply #191 on: February 16, 2016, 06:55:57 AM »

Dow will peak March 23…just after lunch: Analyst
Kalyeena Makortoff   | @kalyeena
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Stocks have entered bear market territory, and any rallies from here are just opportunities to sell — not buy, a number of analysts have told CNBC.

Charles Newsome, a divisional director at Investec Wealth and Investment, told CNBC Monday that rising equity prices, including the 7.2 percent surge on the Nikkei and a two day rally across European stocks, are only temporary moves in a prolonged downward cycle that should be carefully considered.

He says the bear market — defined as a market condition where prices fall and negative sentiment causes the drop to become self-sustaining — was already in motion as of May 2015, after a seven-year upward trend. And if historical moves are any indication, Newsome said, investors have up to four months left where "any rallies are an opportunity to sell not buy," he wrote in a note to CNBC.

Not everyone believes markets are turning in though, with those like BMO Capital Markets' chief investment strategist Brian Belski telling CNBC just weeks ago that downward moves are just a healthy correction in a bull market set to last 15 to 20 years.


Traders work on the floor of the New York Stock Exchange.
We are in a 20-year bull market: BMO's Belski
Others, like Newsome suggest optimists just aren't facing the facts. He said investors have gone "overboard" with the recent market rally, forgetting too quickly that quantitative easing efforts by central banks have pushed asset prices too high, while global growth has stayed far too low.
Dumping the Dow?

But it may not be time to dump all your stocks just yet — at least not until current rally runs its course.

The Dow Jones Industrial Average , for example, will hit its peak on Wednesday, March 23rd, specifically "after lunch," Robin Griffiths, the chief technical strategist at the ECU Group told CNBC.

He says hedge funds, bargain-seeking traders, and investors who want to prove we're still in bull market territory, have helped drive up Dow stock valuations in recent sessions. But once the stock reaches overhead resistance levels — the price level which asset prices find difficulty breaking through — hedge funds will renew their short positions as the global economy continues to cool.

"The final low of the bear market isn't even this year, it's next year. But this is a ^ good rally and I think it will surprise people how good it is," Griffiths said.

"What you should be doing is using it as a selling opportunity to go defensive," he explained pointing out that it'd be wise to hold onto utilities, consumer staples, telecoms and even Google — that is, companies with services that stay essential, despite a downturn.


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Re: S&P 500 Index Movements
« Reply #192 on: February 16, 2016, 06:57:24 AM »



Only the Fed can save stocks now: Deutsche Bank
Matt Clinch   | @mattclinch81
10 Hours Ago
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The prolonged sell-off in risk assets across the globe will only abate if the U.S. Federal Reserve changes its path and begins to loosen its monetary policy once again, according to strategists at Deutsche Bank.

Chinese growth fears, stress in the U.S. energy sector and fragile balance sheets in European financial companies have all been credited in the last week for fueling the sell-off. However, there's only one real cure for this current bout of weakness, according to a team of European equity analysts at the German bank, led by Sebastian Raedler.

"Without policy intervention, there is more downside risk for equities," the bank said in a note entailed "The smell of default" on Monday.


Janet Yellen
Jonathan Ernst | Reuters
Janet Yellen
A major focus for the analysts has been rising bond yields on riskier corporate debt in the U.S.. This has been seen as a sign of an end of the current credit cycle, which in turn could that could pave way for a number of defaults in the country, the bank noted. Raedler said that U.S. high-yield spreads – the difference between investment grade and non-investment grade bonds - have risen above their 2011 peak and warned of the potential for a self-fulfilling "full default cycle." He highlighted the stress had started with energy firms - that have been hit by the oil price plunge – but added that it wasn't confined to this sector
"To avoid a further rise in U.S. defaults, we will likely need to see a Fed relent, leading to a sustainable drop in the dollar, higher oil prices and reduced energy balance sheet stress," the bank said in the report.
The problem for investors is that there is little sign of the Fed wanting to change course, Raedler added. Data last week from the Bureau of Labor Statistics showed that U.S. firms were continuing to hire with 5.6 million job openings in December 2015, up from 5.43 million job openings in November.


Federal Reserve Board Chair Janet Yellen testifies on Capitol Hill in Washington, Thursday, Feb. 11, 2016.
Yellen: Negative rates not 'off the table'
Sen. Pat Toomey, R-Pa.
Senator to Yellen: Forget stock drop, normalize
A trader on the floor of the New York Stock Exchange.
Can the Fed see eye to eye with markets?: Expert

Rather than cutting, these data are likely to leave the U.S. central bank on course for more rate hikes after it decided to tighten policy at its December meeting last year. However, Fed Chair Janet Yellen sounded a more cautious tone in her testimony to Congress on Thursday.
Equities have been roiled this year with the pan-European Euro Stoxx 600 index down 12 percent and the S&P 500 already losing nearly 9 percent, both on course for their worst year since the 2008 financial crisis. Deutsche Bank shares have been at the forefront of the selling in Europe with questions raised over the quality of its balance sheet.
A "full default cycle" in the U.S. would trigger a further 20 percent downside European equities, Raedler said, but would also increase the risk of a U.S. recession. He believes that this rising cost of debt for corporates would reduce their spend on investment and hiring. Falling equity prices would also urge people to save and thereby dent consumption growth, he added.


Recession talk has been a hot topic this year alongside the possibility of central banks using negative deposit rates to stimulate their economies. However David Absolon, Investment Director at Heartwood Investment Management believes that the U.S. economy is not in the "doldrums" yet.
"The Fed is walking a tightrope between being seen to show confidence in the U.S. economy and at the same time acting to navigate against difficult global headwinds," he said in a note Monday.
"The U.S. economy, while anemic, continues to expand," he added.

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Re: S&P 500 Index Movements
« Reply #193 on: February 16, 2016, 08:08:36 AM »



Central bankers 'don't have a clue' - Jim Rogers
by Alanna Petroff   @AlannaPetroff
February 15, 2016: 9:03 AM ET   


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Famed investor Jim Rogers is warning that financial Armageddon is just around the corner, and it's being fueled by moronic central bankers.
"We're all going to pay a horrible price for the incompetence of these central bankers," he said Monday in a TV interview with CNNMoney's Nina dos Santos. "We got a bunch of academics and bureaucrats who don't have a clue what they're doing."

The Singapore-based American investor said central bankers are doing everything they can to prop up financial markets, but it's all for naught. He predicts their unconventional monetary strategies will lead to a stock market rally in the near future, but deep trouble later this year and into 2017.
"This is going to be a disaster in the end," he said. "You should be very worried and you should be prepared."
Central bankers around the world have been increasingly using negative interest rates to prop up inflation and support their economies, but Rogers said the moves aren't working. He said they are simply trying to rescue stock markets and help brokers keep their Lamborghinis.
"The mistake they're making is, they've got to let the markets sort themselves out," he said.
"It's been over seven years since we've had a decent correction in the American stock market. That's not normal ... Markets are supposed to correct. We're supposed to have economic slowdowns. That's the way the world has always worked. But these guys think they're smarter than the market. They're not."
Related: Rogers wants to buy North Korea
Rogers made his fortune several times over by investing where others feared to tread. He made a name for himself in the 1970s after co-founding a top-performing fund with George Soros. He has also penned a range of investment books and become a fixture on the international speakers' circuit.
Rogers set a Guiness world record between 1999 and 2002 by visiting more than 100 countries by car.

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Re: S&P 500 Index Movements
« Reply #194 on: February 16, 2016, 08:12:46 AM »

财经  2016年02月15日
新恐慌指数预警 美陷衰退机率逾六成

(纽约15日讯)美国公债市场「殖利率曲线」益发平缓,预示未来12个月发生经济衰退的风险升高。

美银美林银行甚至表示,发生衰退的最高机率高达64%。年初以来全球股市出现大屠杀,公司债市场亦出现骚动,均可能衝击美国经济成长。尤其是公债的「殖利率曲线」趋平,预示经济衰退的能力更强。

从二次大战以来,每次美国经济衰退之前,都先出现殖利率曲线出现平缓或「倒转」,即长期殖利率接近或低于短期殖利率。一些经济学者已经称此为「新恐慌指数」。

目前美国殖利率曲线虽趋平缓,2年期与10年期公债殖利率差距缩小到接近100个基点,但迄未「倒转」。

由于目前联邦基金利率在0.25-0.5%之间,联储局虽预测2016年將升息4次,但利率期货显示,今年利率將不会上升,到2017年底也只会升息两次,即上升到1%,而目前10年期公债殖利率仍在1.5%以上,这表示短期利率將持续低于长期,而殖利率曲线「倒转」根本遥不可及


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Re: S&P 500 Index Movements
« Reply #195 on: February 16, 2016, 08:41:57 AM »



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市場還沒觸底!美倒債味四溢、指望FED佛祖拯救蒼生
回應(0) 人氣(13) 收藏(0) 2016/02/16 08:01
MoneyDJ新聞 2016-02-16 08:01:10 記者 陳苓 報導
歐美股市回神,連兩日大漲,是否表示今年年初以來的股災已經接近尾聲?有分析師說,恐慌性賣壓尚未出籠,意味市場還沒觸底,未來仍會續跌。德意志銀行更說,倒債臭味四溢,只有聯準會(FED)能拯救蒼生。
CNBC 15日報導,Convergex首席市場策略師Nicholas Colas報告指出,市場觸底有三個可靠指標:第一是標普500指數單日大跌5%,第二是芝加哥選擇權交易所(CBOE)的波動率指數(VIX)衝上40,第三是市場連續幾天出現拋售潮,所有股票的相關係數達到1,目前上述三者都還沒發生,他們決定繼續觀望。
儘管股市頻頻崩盤,用來衡量市場恐慌氣氛的VIX指數卻停留在30左右,不及去年8月的40,也低於2008年金融海嘯時的接近90。VIX交易員Brian Stutland說,他仍在等待VIX展現純然恐慌,股民搶買保險自救,要等到市場陷入此種地步,他才會進場。

CNBC另一篇報導稱,德意志銀行的歐洲證券分析師Sebastian Raedler等人報告表示,FED再次寬鬆,才能解決全球風險資產的拋售潮,FED若不干預,股票會有更多下行風險。德銀該篇報告以「倒債味飄散」為名。
德銀強調,美國高風險企業債的殖利率大增,垃圾債和投資等級債的殖利率利差超越2011年高點,顯示當前的信貸循環進入尾聲,未來恐有倒債潮。Raedler指出,能源業將首先違約,並可能蔓延到其他行業。要避免倒債企業ˇ暴增,FED需進行寬鬆,引導美元貶值,油價走升,減緩能源業資產負債表的壓力。
*編者按:本文僅供參考之用,並不構成要約、招攬或邀請、誘使、任何不論種類或形式之申述或訂立任何建議及推薦,讀者務請運用個人獨立思考能力,自行作出投資決定,如因相關建議招致損失,概與《精實財經媒體》、編者及作者無涉


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Re: S&P 500 Index Movements
« Reply #196 on: February 17, 2016, 05:00:55 AM »



+27

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Re: S&P 500 Index Movements
« Reply #197 on: February 17, 2016, 05:40:18 AM »



1895.58


+30.8

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Re: S&P 500 Index Movements
« Reply #198 on: February 17, 2016, 06:54:46 AM »


History says the S&P is headed to 1,670: Technician
Alex Rosenberg   | @CNBCAlex
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Stocks may be bouncing Tuesday, but if history repeats itself, the market is going way lower.

So argues technical analyst Todd Gordon. Gordon says the closest antecedent to the current stock market pain came in 2011, when it fell 21 percent from its high in May to its low in October.

"A lot of times, markets will repeat themselves," Gordon said. And if the market falls 21 percent from its all-time high in May 2015, that will bring the S&P 500 to about 1,670, he points out.



That level is "ultimately what we're going to target when this bounce is defeated," the technician said Friday on CNBC's "Power Lunch."

This might sound like an outlandish call — but it mirrored the method Gordon used to forecast crude oil in November. With oil trading at $40 per barrel, he predicted that it would fall to $26, based on the idea that it would repeat the 77 percent decline it suffered in the financial crisis.

Read MoreThe chart that says crude oil is going to $26

On Thursday, oil fell as low at $26.05, before rebounding somewhat in Friday and Tuesday trading

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Re: S&P 500 Index Movements
« Reply #199 on: February 17, 2016, 07:01:18 AM »



Home
The Most Hated Dead Cat Bounce Ever? Wall Street Is Throwing Up All Over This Rebound
Tyler Durden's pictureSubmitted by Tyler Durden on 02/16/2016 15:09 -0500

Bear Market Central Banks China Credit Conditions Davos Deutsche Bank Japan None Recession recovery Russell 2000 Technical Analysis Yield Curve


 
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For the longest time, it was "the most hated rally ever" and, as even the Davos crowd has now admitted, with good reason: it was all central bank manipulation and intervention, both of which are about to lose all potency forcing even the billionaires to admit that "the trade now is to hold as much cash as possible." As the WSJ summarized three weeks ago, the billionaires' "mood here was irritated, bordering on affronted, with what they say has been central-bank intervention that has gone on too long."

Well, be careful what you wish for, because as Deutsche Bank explained moments ago the central-bank intervention must go on, or else these billionaires will be even more irritated when their stocks crash and they become millionaires first, then hundred thousandaires, and so on.

In the meantime, the markets have rolled over, and after twice testing the key support level of 1,812 in the S&P 500, violent dead cat bounces have emerged every single time.

And yet in an unexpected twist, this time the majority of Wall Street "experts" is not only not cheering this rally on but is urging anyone who cares to listen to use it to liquidate positions; in fact thus may well be the "most hated repeat dead cat bounce ever."

Here are some observations, first from the technicians courtesy of BBG:

MKM’s Jonathan Krinsky says 1,810-1,820 support "unlikely to hold," next test at S&P 500 falling to 1,740. There are “some bullish divergences that give merit to this counter-trend rally, [but] we are hard pressed to think a major low has been put in” Resistance to kick in at 1,940-1,960
Oppenheimer’s Ari Wald says this will be “just another dead-cat bounce” unless internal breadth broadens, investors buy cyclicals, credit conditions improve; sees rally "capped" at 1,965-2,000; he adds that investors should buy large-cap Software & Service names, and sell: “value-based” sectors; Russell 2000; European, Japanese, emerging market stocks
BTIG’s Katie Stockton says breakdowns "abundant in the past several weeks;" views rally “as an opportunity to take down exposure” S&P breaking uptrend line from 2009 low is additional sign rally is merely
Then there are the fundamentals guys, who keeps pounding the drum on selling the rally. Here is JPM's Mislav Matejka:

The key strategy in our view remains to use the rebound as an opportunity to sell. We are cautious on equities for 2016 and look for further weakness in 2H. Equity valuations have improved following the latest bout of weakness, but P/E multiples remain above historical median levels in most regions. The crucial concern is that profits are rolling over. The trailing EPS growth of MSCI World is outright negative at -5%, the lowest since the Great Recession. This is important, as in our framework, the three key lead indicators of the cycle remain: credit spreads, profit margins and the shape of the yield curve, all of which are sending negative signals. The lagging indicators were typically the labour market, actual credit growth and inflation.... Buybacks stocks have been strong outperformers for a long time in the US, but we note that the market does not seem to be rewarding these anymore. The Buyback index has lost 10% relative to the S&P500 since last April.
Here is BofA's Savita Subramanian:

Our S&P 500 forecast framework includes fundamental, technical, sentiment and valuation approaches, and while most still point to further upside for US equities, risks have increased: models now suggests 2000 for year-end, down from 2200. While this still implies attractive upside to US stocks through year-end, unless we see signs of a growth recovery, there may be significant near-term downside to current levels, in our view. Our short-term estimate revisions model has been bearish since September and continues to point to near-term risks; management guidance has grown increasingly pessimistic; and the percentage of stocks with forecast losses is at levels that preceded the last two bear markets
And BofA's chief technicians, Stephen Suttmeier:

The S&P 500 once again attempts an oversold rally on a test of the 1820-1812 support (1800 area). Closing above first resistance at 1872-1882 would set the stage for 1947-1950 (1950 area). We continue to view rallies as sellable bear market bounces and stalling below 1950 would increase the risk for a decisive break of the 1800 area support. Above 1950 is required to put in a double bottom off the 1812-1810 lows, but the double bottom off the late-Aug/late-Sep lows did not lead to new S&P 500 highs
Let's be clear though: none of the above matters, because the second the rally fizzles (and if anything, this week's terrible GDP data from Japan and trade data from China merely made a central bank intervention that much more likely), speculation emerges that :bad news is great again", and stocks soar splatting shorts who are forced to cover, and sending the illiquid "market" surging on absolutely nothing fundamental. As such any technical analysis is particularly meaningless.

It is if and only if central banks make it clear that they will abstain from any market corrective phase, that any analysis based on rational, established metrics - whether fundamental or technical - matters. Until then, the only thing that does matter is whether Kuroda, or Yellen, or Draghi will once again panic and act ouf of sheer desperation, crushing anyone who had the right trade on, but miscalculated the wrong central planner.

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Re: S&P 500 Index Movements
« Reply #199 on: February 17, 2016, 07:01:18 AM »