Author Topic: S&P 500 Index Movements  (Read 651885 times)

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Re: S&P 500 Index Movements
« Reply #50 on: January 16, 2016, 05:15:41 AM »



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Re: S&P 500 Index Movements
« Reply #51 on: January 16, 2016, 05:19:08 AM »



Offline einvest88

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Re: S&P 500 Index Movements
« Reply #52 on: January 16, 2016, 06:01:29 AM »
S&P500 confirm broken the 2 yr Head & Shoulder neckline ...with tp 1280...

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Re: S&P 500 Index Movements
« Reply #53 on: January 16, 2016, 06:02:56 AM »

Stocks close down 2% after hitting a near 15-month low on oil rout
Evelyn Cheng   | @chengevelyn
55 Mins Ago
COMMENTSJoin the Discussion

U.S. stocks closed sharply lower Friday ahead of a long weekend and the onslaught of earnings season, after a slew of disappointing U.S. data, a plunge in oil to below $30 a barrel, and a sell-off in Chinese stocks added to mounting concerns about slowing global growth.

Stocks ended more than 2 percent lower, well off session lows, but the S&P 500 and Dow Jones industrial average still posted their worst two-week start to a year on record.

The S&P 500 held above its August low of 1,867 in the close. The index briefly fell 3.5 percent in midday trade to below that level, to its lowest since mid-October 2014. ( Tweet This )

Read MoreRecession, bear market fears lead to market rout

"Momentarily, yes, it is encouraging and it will not be a negative anecdote for the day, but you've got some pretty good catalysts in China GDP and the fact that we're closed for the day (Monday). The sense is that this is a longer process," said Ryan Larson, head of equity trading, U.S., RBC Global Asset Management (U.S.).

U.S. stock markets are closed Monday for Martin Luther King, Jr. Day. China GDP is among the few data points from the country due out ahead of Tuesday's U.S. trading session. Friday also marked an options expiration day that likely contributed to some volatility.

"Obviously it started with growth concerns overseas and now we're (hitting) ourselves with the same growth concerns as retail sales were weak and Empire manufacturing that collapsed," said Peter Boockvar, chief market analyst at The Lindsey Group.
The Dow Jones industrial average closed about 390 points lower after earlier falling nearly 537 points. The Dow closed below the psychologically key 16,000 level for the first time since Aug. 25, with Goldman Sachs contributing the most to declines.

"I think some of that was overselling. Still, (about) 400 points is pretty serious. I think going into the close I think things could possibly get better," said Douglas Cote, chief market strategist at Voya Investment Management. He's telling investors, "stick to global diversification and don't panic."

Read MoreBuying opportunities, volatility ahead: El-Erian

"This seems overdone, (but) oil under $30 raises a lot of concern about the impact to not only energy but also the banks and their exposure," he said.

U.S. crude oil settled down $1.78, or 5.71 percent, at $29.42 a barrel, the first settle under $30 in 12 years. WTI lost 11.3 percent for the week, its worst in more than a year.

An oil pump jack in Russia
US oil plunges 5.7% on China, closes at $29.42 a barrel
Bond traders at CME Group
US Treasurys mixed after 30-year bond sale

Dollar slumps on poor US data; aussie, loonie drop
Gold bullion bars and coins.
Gold climbs on weaker dollar, equities

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, briefly topped 30 for the first time since Sept. 1.
"Taking out that August low is definitely concerning," said John Caruso, senior market strategist at RJO Futures. "It may not happen in the near term, (but) definitely low prices are coming."

Financials closed down 3.4 percent to lead all S&P 500 sectors lower. Information technology and energy were the second and third greatest decliners, respectively.
"The fact that financials are leading it after positing good earnings is troubling," said JJ Kinahan, chief strategist at TD Ameritrade.

Read MoreEarly movers: GE, INTC, YHOO, GS, C, BLK, & more

The Dow transports closed down 1.6 percent after earlier falling more than 3 percent. Avis Budget led decliners.
Oil fell sharply to hit fresh lows amid the China stock sell-off and concerns about more oversupply from possible lifting of international sanctions within days that could increase Iranian oil exports. The weekly rig count showed a decline of 1, according to Baker Hughes.
Brent crude settled down 6.28 percent at $28.94 a barrel, its lowest in nearly 12 years. Brent lost 13.7 for the week, its worst weekly decline since 2008.

Dow futures briefly fell 400 points and the 10-year Treasury yield dipped below 2 percent after retail sales declined 0.1 percent in December. Ex-autos, retail sales also fell 0.1 percent.
The 10-year yield was near 2.03 percent and the 2-year yield around 0.84 percent around the U.S. stock market close.

"We suffered some real technical damage and the thing that worries me is this systemic lack of confidence. I still think the fundamentals are solid," said Brad McMillan, chief investment officer at Commonwealth Financial. "The U.S. economy is not going into a recession anytime soon."

Read MoreFANG bites back: Amazon, Netflix dictate sell-off

In economic news, the January Empire manufacturing index was minus 19.4.

Industrial production for December fell 0.4 percent. Capacity utilization was 76.5 percent.
The Producer Price Index fell 0.2 percent in December after rising 0.3 percent in November.
November U.S. business inventories fell 0.2 percent.
January U.S. Michigan preliminary Consumer Sentiment was 93.3.
Read MoreInvestor hopes sag to worst in 11 years: Survey

"What (the data) is saying is the U.S. economy in the fourth quarter is slowing and the data is in line with that expectation of that slowdown. However, the market's concerns of recession are much more elevated than they were a few days ago because of emerging markets, China and commodities," said Krishna Memani, chief investment officer at OppenheimerFunds.

"Because investors don't trust underlying data coming out of (emerging market) countries much, they are looking at market indicators as proxies," he said, noting he thinks concerns about emerging markets are overblown.

The iShares MSCI Emerging Markets ETF (EEM) closed nearly 4 percent lower.

Overseas, the Shanghai composite fell about 3.5 percent after Chinese loan data renewed concerns about the pace of economic slowdown. The People's Bank of China set the yuan mid-point fix at 6.5637, comparatively flat relative to Thursday's fix of 6.5616.

European stocks closed down more than 2.5 percent.
Read MoreBuckle up: China could rock markets next week

The U.S. dollar index was down about 0.2 percent. The euro was at 1.09 and the yen at at 116.94 yen against the greenback.
"Simply put, we're not talking about a wall of worry right now. We're talking about a mountain," Larson said.

"It's not anything new. It's the continued persistence of global growth concerns," he said.

White House spokesman Josh Earnest said Friday the market action is "closely watched at the Treasury Department" and that financial markets around the world are under watch. The White House does not usually comment on market moves.
New York Federal Reserve President William Dudley said that future rate hikes depend on data and that rates are set to continue on gradual upward path. He added that overseas economies pose risk to the United States and there's little change in outlook since the Fed meeting.

Core inflation is quite stable despite lower energy, Dudley said, noting 2016 growth is to be slightly above 2 percent.

Read MoreFed fund futures push first expected rate hike to July: CME data
San Francisco Federal Reserve Bank President John Williams told Reuters Friday the stock market's swoon does not change the economic outlook and is merely market participants trying to make sense of global developments,

"If the Fed is not going to be underpinning the market, the valuations have to fall into line with fundamentals," said Quincy Krosby, market strategist at Prudential Financial.

"This (sell-off) should not be a surprise to the market. This has been telegraphed to the market for some time. ... This is not abnormal for four years of no pullbacks," she said.

DJIA   Dow Jones Industrial Average   15988.08       -390.97   -2.39%
S&P 500   S&P 500 Index   1880.33       -41.51   -2.16%
NASDAQ   Nasdaq Composite Index   4488.42       -126.59   -2.74%
The Dow Jones industrial average closed down 390.97 points, or 2.39 percent, at 15,988.08, with Intel leading all constituents lower.
The Dow lost 2.19 percent for the week. DuPont was the greatest decliner on the week, while Exxon Mobil was the best performer.

The S&P 500 closed down 41.55 points, or 2.16 percent, at 1,880.29, with financials leading all 10 sectors lower.

The index fell 2.17 percent for the week, with materials the worst performer and utilities the only gainer.

The Nasdaq composite closed down 126.59 points, or 2.74 percent, to 4,488.42.

The Nasdaq lost 3.34 percent for the week, with Apple up 0.18 percent for the week but the iShares Nasdaq Biotechnology ETF (IBB) down nearly 6 percent.

About five stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of nearly 1.5 billion and a composite volume of almost 5.5 billion in the close.

High-frequency trading accounted for 49 percent of January's daily trading volume of about 8.97 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.
Gold futures for February delivery settled up $17.10 at $1,090.70 an ounce.

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Re: S&P 500 Index Movements
« Reply #54 on: January 16, 2016, 06:04:48 AM »

Prepare for stocks to fall another 10%: Larry Fink
Matthew J. Belvedere   | @Matt_Belvedere
9 Hours Ago
COMMENTSJoin the Discussion

BlackRock Chairman and CEO Larry Fink said Friday the stock market could fall another 10 percent and oil prices could test $25 per barrel.

"We're in the midst of a real market decline, bordering on a bear market," he told "Squawk Box" on CNBC. "But the speed at which this is happening is just a reassessment of the risk, reassessment of where we're going."

Read MoreBob Doll: I don't see a bear market, but ...
U.S. stock futures were crumbling Friday morning, with Dow futures down nearly 300 points, as oil tanked. The resumption of the decline follows Thursday's sharp increase on Wall Street.

Despite Thursday's gains, the Dow Jones industrial average and the Nasdaq composite remained in correction, a threshold of 10 percent or more to the downside from all-time highs. But the S&P 500 was able to narrowly escape correction territory ahead of Friday's trading.

If the market were to fall another 10 percent, as predicted by Fink, that would put stocks in a bear market, as defined by a decline of 20 percent from new highs.

"I believe there's not enough blood in the street. We'll probably going to have to test the markets lower," he said. "When we test the markets lower, it's going to be a pretty good buying opportunity."

Read MoreBlackRock earnings miss, revenue beats estimates

Fink does not believe stocks will enter what he calls a classic bear market. "I always look at a bear market ... [as] persistent water torture, day after day after day after day. I'm not sure this is what we call a classic bear market.

But by the second half of the year, Fink said, the stock market should be higher. "Over the course of the next six months, we think it's going to feel a lot better."

"There's not that much leverage in the system," he said. "That's why all the analogies to 2008 and 2009 are erroneous. We don't have that type of leverage."

As for oil, prices were plunging Friday morning, with West Texas Intermediate crude down more than 5 percent. WTI was trading under $30 per barrel, after posting the first significant gains for 2016 in the previous session.

"But my worry about oil prices today I'm sure nine out 10 of your guests talk about oil is going lower now so it's a very heavy trade," Fink said.

Read MoreTHIS will bring oil producers to their knees: Kilduff

These sharp moves in oil and the dismal start of the year for the stock market put negativity across the U.S. economy, he said. "It's] a negativity to every CEO who is looking at his or her stock price [as well as] a negativity related to business and the forward thinking about businesses."

"I actually believe you're going to start seeing more layoffs in the middle part of the first quarter, definitely the second quarter." he warned

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Re: S&P 500 Index Movements
« Reply #55 on: January 16, 2016, 06:18:10 AM »

U.S. stocks post worst 10-day start to a year in history

By Joseph Adinolfi and Barbara Kollmeyer
Published: Jan 15, 2016 4:28 p.m. ET

Dow industrials sinks nearly 400 points
Getty Images
Markets can’t get around a wall of China worry
U.S. stocks closed sharply lower Friday, locking in the worst 10-day start to a calendar year ever, as oil prices plunged and investors worried about slowing growth in the U.S.

During the course of the session, the S&P 500 broke below its Aug. 24 low—which several market strategists said would be tantamount to a major sell signal—to trade at its lowest level since October 2014. The Dow Jones Industrial Average was briefly down as much as 537 points.

Dow Jones Industrial Average
15 Jan
Oil appeared to be the main driver of concern. Both the U.S. CLG6, -4.81% UK:LCOG6 and global benchmarks settled below $30 a barrel, as investors feared that supplies will continue to rise as Iran prepares to enter the market ad Russia continues pumping oil to help support its flagging economy.

”There’s not a lot of people willing to take their foot off the gas and prices are adjusting accordingly,” said David Meier, portfolio manager at Motley Fool Asset Management. “As a result of that you’re seeing fear just creep in.”

The Dow DJIA, -2.39% slumped 390.97 points, or 2.4%, to 15,988.08, while the S&P 500 SPX, -2.16% slid 44.85 points, or 2.3%, to 1,876.99, led lower by the financial, technology and energy sectors. The Nasdaq Composite COMP, -2.74%  tumbled 126.59 points, or 2.7%, to 4,488.42.

All Dow components ended in negative territory, as were all 10 sectors on the S&P 500.

Follow MarketWatch’s stock market live blog.

Read: Why oil could plunge to $20 a barrel, but probably not $10

Selling began in China after official data showed that new bank loans were lower than expected in December as lenders sharply curtailed activity amid worries about slowing growth and bad debt. In a bid to boost liquidity, China’s central bank said it pumped $15 billion of funds into the market via a medium-term lending facility on Friday.

The Shanghai Composite SHCOMP, -3.55%  dropped 3.5% and is down 20% from a Dec. 22 high, which by one definition puts it in a bear market.

All of this was exacerbated as options stopped trading ahead of their expiration on Saturday. Dave Lutz, head of ETFs at JonesTrading, said because of how the market was positioned, options dealers needed to sell more futures to hedge their positions as stocks fell.

Intel Corp. INTC, -9.10% was the biggest loser among Dow components, plunging 8.9%, after earnings late Thursday, and major oil companies Chevron Corp. CVX, -2.11% and Exxon Mobil Corp. XOM, -1.95% also were big losers.

Both the Dow and S&P 500 finished the week down more than 2%, while the Nasdaq shed more than 3% of its value this week.

Read: Goldman’s Abby Joseph Cohen says stocks are the best place to be

Trump and Cruz clashes dominate Republican debate(2:34)
GOP front-runners Donald Trump and Sen. Ted Cruz exchanged jabs and dominated the airtime at the sixth Republican presidential debate.

Economic signals: A spate of disappointing U.S. data show that both manufacturing and consumer spending are in trouble. Empire State factory index declined sharply in January to its lowest level since the recession. Retail sales declines by 0.1% in December a report on industrial production compiled by the Federal Reserve showed that activity declined for the third straight month.

The cost of producing goods and services dropped again.

The lone bright spot was a report on consumer sentiment in January, which rose to 93.3 from a preliminary reading of 92.6 in the University of Michigan’s preliminary January reading.

Read: Why U.S. retail sales will be weak again in December

New York Fed President William Dudley remained upbeat when he spoke Friday, saying he still expected the economy to push the unemployment rate down further and for growth to be slightly above the long-term trend.

Stocks to watch: Despite J.P. Morgan Chase & Co.’s JPM, +0.18%  upbeat results, the bank’s shares were off 2%.

Shares of BlackRock Inc. BLK, -4.33%  were down 4.3% even after the firm said its earnings rose on the back of higher fees.

Wells Fargo & Co. WFC, -3.59% shares were 3.6% lower, after the bank posted a profit that was flat as low oil prices hurt the country’s fourth-largest bank by assets.

Citigroup Inc. C, +0.09%  profit soared last quarter as litigation costs fell. But its shares were ended 6.4% lower.

Shares of Analog Devices Inc. ADI, -1.35%  slumped 1.4% after it cut its revenue outlook late Thursday.

General Electric Co. GE, -1.96%  said it has made a deal to sell its appliance unit to Shanghai-listed Qingdao Haier Co. 600690, +1.43% in which Chinese appliance maker Haier Group owns a key stake, for $5.4 billion. Shares of GE finished down 2%.

Other markets: European stocks were unable to escape the downward trend from other markets, and the Stoxx Europe 600 index SXXP, -2.82%  lost 2.8%. The dollar USDJPY, -0.88% fell to a one-year low vs. the yen. Gold GCG6, +1.40%  rose $22.40, or 2.1%, to $1,096.20 an ounce.

Treasury yields fell to a 3-month low TMUBMUSD10Y, -2.52% with the 10-year yield briefly falling below 2%

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Re: S&P 500 Index Movements
« Reply #56 on: January 16, 2016, 06:20:00 AM »

Stock market bloodbath wasn’t the final flush, indicator suggests

By Tomi Kilgore
Published: Jan 15, 2016 4:44 p.m. ET

NYSE’s Arms Index fell short of levels associated with panic-like selling that often precedes a stock market recovery
Everett Collection
Jodie Foster and Kristen Stewart in “Panic Room”
The stock market’s bloodbath Friday was not the final flush needed to clear the way for a recovery, according to a widely-watched indicator of selling intensity.

Many technicians, as well as old-school fundamental investors like Warren Buffett, say that the time to start buying in a falling market is after signs of panic, or capitulation by the bulls.

But after the Dow Jones Industrial Average DJIA, -2.39%  plunged 391 points, or 2.4% on Friday--the biggest one-day percentage decline in 3 1/2 months--the New York Stock Exchange’s Arms Index suggested bulls were anxious, but not quite scared enough to throw in the towel.

The Arms Index is a volume-weighted measure of market breadth, which is calculated by dividing the ratio of the number of advancing stocks to declining stocks by the ratio of advancing volume to declining volume. When the market is declining, the Arms Index usually rises, as the volume in declining stocks tends to increase faster than the number of stocks that are declining.

In other words, sellers tend to hit the sell button a little harder when the market is falling, then when it isn’t.

An Arms reading of 1.0 implies buying and selling is in complete balance. Technicians see a rise to the 2.0-to-3.0 range as the threshold to imply panic, or capitulation.

On Friday, the NYSE’s Arms rose to just 1.791.

In comparison, last year’s high for the NYSE Arms was 4.95 on Sept. 1, when the Dow plunged 470 points. The Dow rose 293 points the next day, and ran up 1,830 points over the next three months.

Meanwhile, when the Dow tumbled 392 points last Thursday, and the NYSE Arms rose to just 1.28, the Dow slumped another 168 points the next day.

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Re: S&P 500 Index Movements
« Reply #57 on: January 16, 2016, 06:24:49 AM »

Bill Gross warns: ‘Stay out of the bathroom’

By Ellie Ismailidou
Published: Jan 15, 2016 4:47 p.m. ET

Gross blames the Fed for “talking tough”
Bloomberg News/Landov
Bill Gross says “wealth effect constructed with paper” can sometimes resemble a toilet.
On Friday, as U.S. stocks plunged, with the S&P 500 SPX, -2.16%  tumbling to its lowest level since October 2014, Bill Gross, the billionaire investor and founder of PIMCO who now runs a fund at Janus Capital Group, took to Twitter to try and identify the root cause of the selloff.

Gross has never hidden his concern about wealth and growth being based on inflated asset valuations, not the real value of a goods-and-services producing system.

But while some of the insights he shared were no doubt perceptive, others were typically cryptic.

Like when he warned investors to “stay out of the bathroom.”

After a close reading, it’s likely that Gross probably meant this as a warning investors to be judicious when deciding where and how to invest.

He also pointed to actions that he said have distorted markets.

The bond guru pointed to an important element of the market rout, the so-called carry trade, a strategy in which investors borrow money at a low interest rate in order to invest in an asset that is likely to provide a higher return.

But the hidden danger of buying on margin is that when prices plummet, portfolio managers get so-called margin calls, which force them either to deposit more money in the account to cover the decreased value or to sell off other assets, including high-quality ones like Treasury Inflation Protected Securities (TIPS).

He added that the Fed is partly to blame:

When referring to central banks, the so-called put is the notion that the Fed will rush in to rescue tanking markets.

This notion was denied on paper by Alan Greenspan and Ben Bernanke, former Fed chairme both, but reinforced by the central bank’s aggressive actions following the 2008 financial crisis.

New York Fed President William Dudley on Friday gave no signal that the carnage in the stock market has led to any reconsideration of the central bank’s stated goal to lift interest rates as much as 1% this year

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Re: S&P 500 Index Movements
« Reply #58 on: January 16, 2016, 12:55:54 PM »

On the verge of

Death Cross ??

Don't Ignore This Chart

Another Death Cross Looms for the S&P 500
Arthur Hill | January 11, 2016 at 12:04 PM
Stocks took it on the chin over the last two weeks with the S&P 500 falling over 7% in just seven trading sessions (30-Dec to 8-Jan). The depth of this decline forced the 50-day moving average down and it is currently below the 200-day moving average. This death-cross, however, is not the only negative on the chart. In addition to comparing price levels to a moving average, chartists can also analyze the direction of the moving average for directional clues. I added a "zoom thumbnail" so we can better see these two moving averages over the last three weeks. The 50-day SMA is clearly pointing down and the 200-day SMA is also moving lower over the last three weeks. Thus, we have an array of bearish trend indications on this chart. The index is below both moving averages, the 50-day is below the 200-day and both moving averages are pointing down. Such a bearish event also occurred in early September. Note that moving averages are lagging indicators and prone to whipsaw when there is no trend. Prior to the recent whipsaws, the 50-day held above the 200-day from February 2012 to August 2015 (strong uptrend).

Note that there was a golden cross as recently as December 21st when the 50-day SMA moved above the 200-day SMA. The S&P 500 also moved above both moving averages in late December, but failed to hold above these moving averages for very long. Should December's golden cross be negated today, it would mark the shortest golden cross signal in over 50 years

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Re: S&P 500 Index Movements
« Reply #59 on: January 16, 2016, 01:00:28 PM »

Opinion: 7 reasons not to be pessimistic about stocks today

By Jeff Reeves
Published: Jan 15, 2016 2:04 p.m. ET

Panic has set in, but the economy and equity valuations are ought to make investors bullish
The stock market rout has given investors plenty to fret about, as the S&P 500 Index has slumped more than 7% so far this year.

Worse, some high-fliers, like AMZN, -3.85% and Netflix NFLX, -2.82% have been under pressure in recent weeks, making many wonder if there’s anything worth owning.

Hysterical headlines haven’t helped. And short-term declines on Wall Street aren’t the whole story. There are, actually, a lot of reasons to have confidence in stocks this year.

I’m not saying 2016 will see double-digit gains, or that the declines in certain stocks, notably energy companies, aren’t warranted. But there are many more opportunities than you might think.

Read: Are small-cap stocks the canary in the coal mine?

Here are seven reasons you shouldn’t give up on stocks this year, despite the short-term volatility:

Jobs: The rebound in the U.S. job market since the Great Recession has been nothing short of remarkable. The headline unemployment rate is holding strong at 5%, and the December jobs report showed an impressive 292,000 jobs created, trouncing expectations and building nicely on previous job creation. There are, indeed, serious problems in the global economy, but the U.S. labor market is not one of them.

Housing: An equally big driver of the U.S. economy is the housing market, and most indicators continue to point upward for the industry. In the latest “Beige Book” report from the Federal Reserve, “residential construction activity was described as modest or moderate” in most areas. And from a price perspective, the latest S&P/Case-Shiller composite of home prices rose again month-over-month and posted a 5.2% annual increase. Top that off with December data on housing starts that showed double-digit growth in both new construction and permitting, and it adds up to a healthy real estate market.

Also see: A bear market in stocks can be over before you know it

Oil: Cheap energy prices are causing plenty of pain, from lost jobs across the industry to the threat of bankruptcy for overleveraged companies. However, the rough math on Wall Street is that every penny we see shaved off from gas prices equals an extra $1 billion in discretionary income for American consumers. Separately, a recent study showed that for every dollar consumers save at the pump, they spend an extra 73 cents elsewhere in their communities. Since consumer spending is the lifeblood of the U.S. economy, cheap oil has enough benefits in broad economic stimulus to outweigh the specific troubles of energy companies.

Insulation from China: I recently wrote a column on why China’s crash isn’t as bad as you think, and the most compelling reason is the relative insulation of the U.S. economy and stocks from the Chinese market. Citigroup estimates that only 0.7% of overall GDP has direct China exposure, and the very nature of China “A” shares limit foreign investors from deploying too much capital in that country. While China’s slowdown matters, it matters much more to trading partners in emerging markets than the U.S.

Valuations: While there will always be stocks that trade for nosebleed price-to-earnings ratios, the market as a whole looks more fairly valued with each passing day. Currently, the forward P/E of the S&P 500 is only 15.8 or so, down from a peak close to 19 last year. Digging into specific picks, a host of big-name financial stocks including insurer MetLife MET, -0.97% and Bank of America BAC, -3.54% are trading for more than 30% discounts to book value. Elsewhere, automaker General Motors GM, -2.41% and retailer Best Buy BBY, +2.57% are trading for less than a third of next year’s sales. This is a long way of saying that there are challenges out there, but that Wall Street is starting to price many of these shortcomings into a host of stocks across all sectors.

U.S. dollar: The persistently strong U.S. dollar has acted as a big anchor on corporate profits for about a year, and a surge in the currency in the final months of 2015 added to concerns. However, the U.S. Dollar Index peaked at the beginning of December and has actually rolled back modestly even in the face of a Fed interest-rate increase. The fact that the U.S. dollar isn’t running much higher means that the currency headwinds faced by multinational companies at least won’t get any worse, even amid tightening policy at home and easy-money policies abroad.

The long term: It’s worth noting, of course, that a bad January does not a bad year make. It’s fashionable to cite the “January effect,” where the gain or loss in the first month of the year dictates the overall direction of the market 75% of the time. But investors who really care about statistics and trends should also listen to the preponderance of evidence that shows market timing doesn’t work. There has literally never been a 20-year period in the past century or so that has resulted in a negative return for stocks, so investors with the patience and constitution to see their portfolio through an admittedly rough start to the year should be rewarded regardless of the gloom and doom

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Re: S&P 500 Index Movements
« Reply #60 on: January 16, 2016, 01:03:23 PM »

Opinion: The stock market is freaking out about Trump and Sanders

By Brett Arends
Published: Jan 15, 2016 4:49 p.m. ET

Political uncertainty and the prospect of outsider candidates are panicking Wall Street
Getty Images/ Scott Olson
Republican presidential candidates Donald Trump, left, and Sen. Ted Cruz clashed at Thursday night’s debate.
Donald Trump wants to slap tariffs on China — and maybe Japan. He’d build a wall with Mexico. He promises a more pugnacious American posture in the world, and probably a lot more unilateralism.

Bernie Sanders wants to jack up the federal minimum wage, tax short-term stock market trading, and probably raise other taxes and regulations as well.

Both men are rising in the polls.

And as they’re going up, the stock market is going down.

Surprised? Don’t be.

Stock markets hate three things in this world. The first is anyone who dissents from the orthodoxy of MBA economics. The second is anyone they can’t control. The third is uncertainty.

In a worst-case scenario (for investors, at any rate), voters will pick one or two heterodox outsiders who will threaten to turn everything upside down.
And both Trump and Sanders are offering all three. We’re talking Wall Street Nightmare Bingo.

It may be no coincidence that the Dow Jones Industrial Average tanked on Friday, the day after another Republican debate. Trump confirmed his commanding lead in the race, while Jeb Bush went under for the third and, surely, final time.

Yes, of course, there are lots of reasons why stock markets are down so far this year. People are worried about the slowing Chinese economy. They’re worried about falling oil prices, rising interest rates and the dangers of overpriced stocks.

But as a money manager explained to me over lunch this week, he and his clients are also focusing now on a fifth worry: politics.

Even in Wall Street’s best-case scenario, the parties will only pick establishment candidates after months of bruising primary battles.

In a worst-case scenario (for investors, at any rate): They’ll pick one or two heterodox outsiders who will threaten to turn everything upside down.

The political establishment — in places like New York, Washington and Los Angeles — has been waiting for months for the Trump movement to flame out of its own accord. In the past few weeks they have finally woken up to the shock that this may not happen. Voting begins in Iowa and New Hampshire in a few months.

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Re: S&P 500 Index Movements
« Reply #61 on: January 17, 2016, 08:34:49 AM »

Bear market is here—expect another 15% plunge: Technician
Amanda Diaz   | @CNBCDiaz
2 Hours Ago
COMMENTSJoin the Discussion

Stocks were hit by a rush of selling this week that landed all major indices back in correction territory. The S&P 500, Dow and Nasdaq are down a respective 12 percent, 12.7 percent and 12.4 percent from their 52-week high. As investors weigh on whether stocks will resume their bull run, one technician warns there could be significant downside ahead.

"Our 2016 outlook was 'stealth bear market is revealed' and we think very quickly that it's becoming apparent that we are in a bear market," Jonathan Krinsky, MKM Partners' chief technician, told CNBC's "Fast Money" recently. "The S&P 500 is now down more than 11 percent from its May high."

Read More Bob Doll: I don't see a bear market, but...
"I think that ultimately this third test of the August low probably gives way and the next level [of support] is 1,820," added Krinsky. During Friday's swoon, the broad market index had its worst day since Aug. 24, and pierced that month's lowest levels.

"But more importantly, for the first time in three years we are in a downtrend," Krinsky added. "The 200-day moving average is firmly to the downside, so if you are trying to buy the dips it's equivalent of selling the rallies over the last three years."

For Krinsky, the worst-case scenario for the S&P 500 could be a re-test of the breakout from 2007, which comes in around 1,575. "It seems scary but that's only about 25 percent off the highs and that's well within the confines of normal pullbacks," he said. That's a more than 16 percent move from Friday's price of around 1,885.

Furthermore he pointed to the Russell 2000, which is already in a bear market, as a "leading indicator" for where large-cap stocks are heading.

"The Russell 2000 is already down 22 percent from its highs," Krinsky said. "When the S&P 500 didn't take out its August low, the Russell did. It's making lower lows and we think the Russell goes back and re-tests its 2011 highs of 875." He said it's when the small-cap index gets to that 875 level when the S&P 500 is in real jeopardy.

Read More Market near a bottom. S&P to 2,350: Strategist

In this kind of tumultuous environment, Krinsky suggested investing in low-volatility names like utilities and consumer staples and avoiding high beta stocks

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Re: S&P 500 Index Movements
« Reply #62 on: January 17, 2016, 08:38:55 AM »

When the market starts down 8 percent, it usually comes back
Eric Chemi   | Mark Fahey
Friday, 15 Jan 2016 | 4:02 PM ET
COMMENTSJoin the Discussion

The S&P 500 is down about 8 percent to start the year. That's an infrequent situation — in fact, this is the first time we've been so far down this early in the year in three decades, but it doesn't mean the market is doomed.

The market often bounces back when it's this far down in the first quarter. Hover on the chart below to see the odds change during the course of the year. Notice it keeps going down, which makes sense. The longer the market stays negative during the course of the year, the harder it is to end up finishing positive.

months into the year
We've bounced back before
The probability of bouncing back from a -8% YTDreturn, based on historical data.
chance of finishing the year positive
chance of finishing the year better than -8%
Source: FactSet (1978 to 2015)
The chart is a bit wild because there haven't been a lot of instances with an 8 percent drop to start the year. For days that have only one or two sample years that are this bad, the calculated probability jumps is either zero, 50 or 100 percent.

About half the time a year started off this bad, it ended up bouncing back to positive territory by the end of the year. The curve smooths out later in the year, when a year-to-date return of negative 8 percent ends with a gain about 30-40 percent of the time.

All hope isn't lost until late into the third quarter of the year. The market has never recovered from an 8 percent drop that late. The first and second quarters, though, aren't so much of a hurdle to overcome.

S&P 500 historical data since 1978 was used to build a probability curve for each weekday of the year

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Re: S&P 500 Index Movements
« Reply #63 on: January 17, 2016, 08:46:46 AM »

Exclusive: Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears
Tyler Durden's pictureSubmitted by Tyler Durden on 01/16/2016 14:21 -0500

Dallas Fed default goldman sachs Goldman Sachs Jamie Dimon Reflexivity Regional Banks Regions Financial Warren Buffett Wells Fargo

Earlier this week, before first JPM and then Wells Fargo revealed that not all is well when it comes to bank energy loan exposure, a small Tulsa-based lender, BOK Financial, said that its fourth-quarter earnings would miss analysts’ expectations because its loan-loss provisions would be higher than expected as a result of a single unidentified energy-industry borrower. This is what the bank said:

“A single borrower reported steeper than expected production declines and higher lease operating expenses, leading to an impairment on the loan. In addition, as we noted at the start of the commodities downturn in late 2014, we expected credit migration in the energy portfolio throughout the cycle and an increased risk of loss if commodity prices did not recover to a normalized level within one year. As we are now into the second year of the downturn, during the fourth quarter we continued to see credit grade migration and increased impairment in our energy portfolio. The combination of factors necessitated a higher level of provision expense."
Another bank, this time the far larger Regions Financial, said its fourth-quarter charge-offs jumped $18 million from the prior quarter to $78 million, largely because of problems with a single unspecified energy borrower. More than one-quarter of Regions’ energy loans were classified as “criticized” at the end of the fourth quarter.

It didn't stop there and and as the WSJ added, "It’s starting to spread" according to William Demchak, chief executive of PNC Financial Services Group Inc. on a conference call after the bank’s earnings were announced. Credit issues from low energy prices are affecting "anybody who was in the game as the oil boom started,” he said. PNC said charge-offs rose in the fourth quarter from the prior quarter but didn’t specify whether that was due to issues in its relatively small $2.6 billion oil-and-gas portfolio.

Then, on Friday, U.S. Bancorp disclosed the specific level of reserves it holds against its $3.2 billion energy portfolio for the first time. "The reason we did that is that oil is under $30" said Andrew Cecere, the bank’s chief operating officer. What else will Bancorp disclose if oil drops below $20... or $10?

It wasn't just the small or regional banks either: as we first reported, on Thursday JPMorgan did something it hasn't done in 22 quarter: its net loan loss reserve increased as a result of a jump in energy loss reserves. On the earnings call, Jamie Dimon said that while he is not worried about big oil companies, his bank has started to increase provisions against smaller energy firms.


Then yesterday it was the turn of the one bank everyone had been waiting for, the one which according to many has the greatest exposure toward energy: Wells Fargo. To be sure, in order not to spook its investors, among whom most famously one Warren Buffett can be found, for Wells it was mostly "roses", although even Wells had no choice but to set aside $831 million for bad loans in the period, almost double the amount a year ago and the largest since the first quarter of 2013.

What was laughable is that the losses included $118 million from the bank’s oil and gas portfolio, an increase of $90 million from the third quarter. Why laughable? Because that $90 million in higher oil-and-gas loan losses was on a total of $17 billion in oil and gas loans, suggesting the bank has seen a roughly 0.5% impairment across its loan book in the past quarter.

How could this be? Needless to say, this struck us as very suspicious because it clearly suggests that something is going on for Wells (and all of its other peer banks), to rep and warrant a pristine balance sheet, at least until a "digital" moment arrives when just like BOK Financial, banks can no longer hide the accruing losses and has to charge them off, leading to a stock price collapse.

Which brings us to the focus of this post: earlier this week, before the start of bank earnings season, before BOK's startling announcement, we reported we had heard of a rumor that Dallas Fed members had met with banks in Houston and explicitly "told them not to force energy bankruptcies" and to demand asset sales instead.

We can now make it official, because moments ago we got confirmation from a second source who reports that according to an energy analyst who had recently met Houston funds to give his 1H16e update, one of his clients indicated that his firm was invited to a lunch attended by the Dallas Fed, which had previously instructed lenders to open up their entire loan books for Fed oversight; the Fed was shocked by with it had found in the non-public facing records. The lunch was also confirmed by employees at a reputable Swiss investment bank operating in Houston.

This is what took place: the Dallas Fed met with the banks a week ago and effectively suspended mark-to-market on energy debts and as a result no impairments are being written down. Furthermore, as we reported earlier this week, the Fed indicated "under the table" that banks were to work with the energy companies on delivering without a markdown on worry that a backstop, or bail-in, was needed after reviewing loan losses which would exceed the current tier 1 capital tranches.

In other words, the Fed has advised banks to cover up major energy-related losses.

 Why the reason for such unprecedented measures by the Dallas Fed? Our source notes that having run the numbers, it looks like at least 18% of some banks commercial loan book are impaired, and that’s based on just applying the 3Q marks for public debt to their syndicate sums.

In other words, the ridiculously low increase in loss provisions by the likes of Wells and JPM suggest two things: i) the real losses are vastly higher, and ii) it is the Fed's involvement that is pressuring banks to not disclose the true state of their energy "books."

Naturally, once this becomes public, the Fed risks a stampeded out of energy exposure because for the Fed to intervene in such a dramatic fashion it suggests that the US energy industry is on the verge of a subprime-like blow up.

Putting this all together, a source who wishes to remain anonymous, adds that equity has been levitating only because energy funds are confident the syndicates will remain in size to meet net working capital deficits. Which is a big gamble considering that as we firsst showed ten days ago, over the past several weeks banks have already quietly reduced their credit facility exposure to at least 25 deeply distressed (and soon to be even deeper distressed) names.


However, the big wildcard here is the Fed: what we do not know is whether as part of the Fed's latest "intervention", it has also promised to backstop bank loan losses. Keep in mind that according to Wolfe Research and many other prominent investors, as many as one-third of American oil-and-gas producers face bankruptcy and restructuring by mid-2017 unless oil rebounds dramatically from current levels.

However, the reflexivity paradox embedded in this problem was laid out yesterday by Goldman who explained that oil could well soar from here but only if massive excess supply is first taken out of the market, aka the "inflection phase."  In other words, for oil prices to surge, there would have to be a default wave across the US shale space, which would mean massive energy loan book losses, which may or may not mean another Fed-funded bailout of US and international banks with exposure to shale.

What does it all mean? Here is the conclusion courtesy of our source:

If revolvers are not being marked anymore, then it's basically early days of subprime when mbs payback schedules started to fall behind. My question for bank eps is if you issued terms in 2013 (2012 reserves) at 110/bbl, and redetermined that revolver in 2014 ‎at 86, how can you be still in compliance with that same rating and estimate in 2016 (knowing 2015 ffo and shutins have led to mechanically 40pc ffo decreases year over year and at least 20pc rebooting of pud and pdnp to 2p via suspended or cancelled programs). At what point in next 12 months does interest payments to that syndicate start to unmask the fact that tranch is never being recovered, which I think is what pva and mhr was all about.
Beyond just the immediate cash flow and stock price implications and fears that the situation with US energy is much more serious if it merits such an intimate involvement by the Fed, a far bigger question is why is the Fed once again in the a la carte bank bailout game, and how does it once again select which banks should mark their energy books to market (and suffer major losses), and which ones are allowed to squeeze by with fabricated marks and no impairment at all? Wasn't the purpose behind Yellen's rate hike to burst a bubble? Or is the Fed less than "macroprudential" when it realizes that pulling away the curtain on of the biggest bubbles it has created would result in another major financial crisis?

The Dallas Fed, whose new president Robert Steven Kaplan previously worked at Goldman Sachs for 22 years rising to the rank of vice chairman of investment banking, has not responded to our request for a comment as of this writing.

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Re: S&P 500 Index Movements
« Reply #64 on: January 17, 2016, 08:50:26 AM »

The Deflation Monster Has Arrived
Tyler Durden's pictureSubmitted by Tyler Durden on 01/16/2016 12:04 -0500

Bear Market Central Banks China Chris Martenson Equity Markets Federal Reserve Housing Bubble Ludwig von Mises Main Street Real estate

Submitted by Chris Martenson via,

As we’ve been warning for quite a while (too long for my taste): the world’s grand experiment with debt has come to an end. And it’s now unraveling.

Just in the two weeks since the start of 2016, the US equity markets are down almost 10%. Their worst start to the year in history. Many other markets across the world are suffering worse.

If you watched stock prices today, you likely had flashbacks to the financial crisis of 2008. At one point the Dow was down over 500 points, the S&P cracked below key support at 1,900, and the price of oil dropped below $30/barrel. Scared investors are wondering:  What the heck is happening? Many are also fearfully asking: Are we re-entering another crisis?

Sadly, we think so. While there may be a market rescue that provide some relief in the near term, looking at the next few years, we will experience this as a time of unprecedented financial market turmoil, political upheaval and social unrest. The losses will be staggering. Markets are going to crash, wealth will be transferred from the unwary to the well-connected, and life for most people will get harder as measured against the recent past.

It’s nothing personal; it’s just math. This is simply the way things go when a prolonged series of very bad decisions have been made. Not by you or me, mind you. Most of the bad decisions that will haunt our future were made by the Federal Reserve in its ridiculous attempts to sustain the unsustainable.

The Cost Of Bad Decisions

In spiritual terms, it is said that everything happens for a reason. When it comes to the Fed, however, I’m afraid that a less inspiring saying applies:

Yes, it’s easy to pick on the Fed now that it’s obvious that they’ve failed to bring prosperity to anyone but their inside coterie of rich friends and big client banks. But I’ve been pointing out the Fed’s grotesque failures for a very long time. Again, too long for my tastes.

I rather pointlessly wish that the central banks of the world had been reined in by the public before the crash of 2008. However the seeds of their folly were sown long before then:


Note the pattern in the above monthly chart of the S&P 500. A relatively minor market slump in 1994 was treated by the then Greenspan Fed with an astonishing burst of new money creation -- via its ‘sweeps” program response, which effectively eliminated reserve requirements for banks .That misguided policy created the first so-called Tech Bubble, which burst in 2000.

The next move by the Fed was to drop rates to 1%, which gave us the Housing Bubble. That was a much worse and more destructive event than the bubble that preceded it. And it burst in 2008.

Then the Fed (under Bernanke this time) dropped rates to 0%. The rest of the world’s central banks followed in lockstep (some going even further, into negative territory, as in Europe’s case). This has led to a gigantic, interconnected set of bubbles across equities, bonds and real estate -- virtually everywhere across the globe.

So the Fed's pattern here was: fixing a small problem with a bad decision, which lead to an even larger problem addressed by an even worse decision, resulting in an even larger set of problems that are now in the process of deflating/bursting.  Three sets of increasingly bad decisions in a row.

The amplitude and frequency of the bubbles and crashes are both increasing. As is the size and scope of the destruction.

The Even Larger Backdrop

The even larger backdrop to all of this is that the developed world, and recently China, have been stoking growth with debt, and have been doing so for a very long time.

Using the US as a proxy for other countries, this is what the lunacy looks like:

As practically everybody can quickly work out, increasing your debts at 2x the rate of your income eventually puts you in the poor house. As I said, it’s nothing personal; it’s just math.

But somehow, this math escaped the Fed’s researchers and policy makers as a problem. Well, turns out it is. And it’s now knocking loudly on the world’s door. The deflation monster has arrived.

The only possible way to rationalize such an increase in debt is to convince oneself that economic growth will come roaring back, and make it all okay. But the world is now ten years into an era of structurally weak GDP and there are no signs that high growth is coming back any time soon, if ever.

So the entire edifice of debt-funded growth is now being called into question -- at least by those who are paying attention or who aren't hopelessly blinkered by a belief system rooted in the high net energy growth paradigms of the past.

At any rate, I started the chart in 1970 because it was in 1971 that the US broke the dollar’s linkage to gold. The rest of the world complained for a bit at the time, but politicians everywhere quickly realized that the loss of the golden tether also allowed them to spend with wild abandon and rack up huge deficits. So it was wildly popular.

As long as everybody played along, this game of borrowing and then borrowing some more was fun. In one of the greatest circular backrubs of all time, the central banks and banking systems of the developed world all bought each other’s debt, pretending as if it all made sense somehow:


The above charts show how hopelessly entangled the worldwide web of debt has become. Yes, it's all made possible by the delusion that somehow being owed money by an insolvent entity will endlessly prevent your own insolvency from being revealed. How much longer can that delusion last?

All of this is really just the terminal sign of a major credit bubble -- a credit era, if you will -- drawing to a close.

I will once again rely upon this quote by Ludwig Von Mises because apparently its message has not yet sunk in everywhere it should have:

“ There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
~ Ludwig Von Mises
Well, the central banks of the world could not bring themselves to voluntarily end the credit expansion – that would have taken real courage.

So now we are facing something far worse.

Why The Next Crisis Will Be Worse Than 2008

I’m not just calling for another run of the mill bear market for equities, but for the unwinding of the largest and most ill-conceived credit bubble in all of history. Equities are a side story to a larger one.

It’s global and it’s huge. This deflationary monster has no equal in all of history, so there’s not a lot of history to guide us here.

At Peak Prosperity we favor the model that predicts ‘first the deflation, then the inflation’ or the "Ka-Poom! Theory" as Erik Janszen at iTulip described it. While it may seem that we are many years away from runaway inflation (and some are doubting it will or ever could arrive again), here’s how that will probably unfold.

Faced with the prospect of watching the entire financial world burn to the figurative ground (if not literal in some locations), or doing something, the central banks will opt for doing something.

Given that their efforts have not yielded the desired or necessary results, what can they realistically do that they haven't already?

The next thing is to give money to Main Street.

That is, give money to the people instead of the banks. Obviously puffing up bank balance sheets and income statements has only made the banks richer. Nobody else besides a very tiny and already wealthy minority has really benefited. Believe it or not, the central banks are already considering shifting the money spigot towards the public.

You might receive a credit to your bank account courtesy of the Fed. Or you might receive a tax rebate for last year. Maybe even a tax holiday for this year, with the central bank monetizing the resulting federal deficits.

Either way, money will be printed out of thin air and given to you. That’s what’s coming next. Possibly after a failed attempt at demanding negative interest rates from the banks. But coming it is.

This "helicopter money" spree will juice the system one last time, stoking the flames of inflation. And while the central banks assume they can control what happens next, I think they cannot.

Once people lose faith in their currency all bets are off. The smart people will be those who take their fresh central bank money and spend it before the next guy.

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Re: S&P 500 Index Movements
« Reply #65 on: January 17, 2016, 08:57:50 AM »

Earthquake Economics - Waiting For The Inevitable "Big One"
Tyler Durden's pictureSubmitted by Tyler Durden on 01/16/2016 13:15 -0500

Bureau of Labor Statistics Consumer Prices CPI Federal Reserve President Obama PrISM Recession

Submitted by MN Gordon (via Prism Economics), annotated by's Pater Tenebrarum,

Beyond Human Capacity

“The United States of America, right now, has the strongest, most durable economy in the world,” said President Obama, in his State of the Union address, on Tuesday night.  What performance metrics he based his assertion on is unclear.  But we’ll give him the benefit of the doubt.


A collapsed building is seen in Concepcion , Chile, Thursday, March 4, 2010. An 8.8-magnitude earthquake struck central Chile early Saturday, causing widespread damage.  (AP Photo/ Natacha Pisarenko)



Maybe this is so…right now.  But it isn’t eternal.  For at grade, hidden in plain sight, a braid of positive and negative surface flowers indicate an economic strike-slip fault extends below.  What’s more, the economy’s foundation dangerously straddles across it.



Actually, it probably isn’t so – the Atlanta Fed’s GDP Now measure, which has proven surprisingly accurate thus far, indicates that the US economy is hanging by a thread – and the above chart does now yet include the string of horrendous economic data released since January 8.


Something must slip.  A massive vertical rupture is coming that will collapse everything within a wide-ranging proximity.  It is not a matter of if it will come.  But, rather, of when…regardless of what the President says.

Here at the Economic Prism we have no reservations about the U.S. – or world – economy.  We see absurdities and inconsistencies.  We see instabilities perilously pyramided up, which could rapidly cascade down.  We just don’t know when.

Comprehending and connecting the infinite nodes and relationships within an economy are beyond even the most intelligent human’s capacity.  Cause and effect chains are not always immediately observable.  Feedback loops are often circuitous and unpredictable.  What is at any given moment may not be what it appears.


Not Without Consequences

For instance, the Federal Reserve quadrupled its balance sheet following the 2008 financial crisis, yet consumer prices hardly budged.  Undeniably, the Bureau of Labor Statistics’ consumer price index is subject to gross manipulation.  We’re not endorsing the veracity of the CPI.

We’re merely pointing out policies have been implemented that have massively increased the quantity of money, yet we can still get a hot cup of donut shop coffee for less than a buck.  Obviously, the effects of these policies have shown up in certain assets…like U.S. stocks.  That’s not to say they won’t still show up in consumer prices.  They most definitely will.


2-Core CPI

One should perhaps not be too surprised that most prices are far from declining – even when measured by government methods that are specifically designed to play price increases down in order to lower the growth rates of so-called COLA expenses (and leaving aside the fact that the so-called “general level of prices” is a myth anyway and actually cannot be measured) – click to enlarge.


The point is no one really knows when consumer prices will rapidly rise.  The potential is very real.  Like desert scrub tumbling along a highway edge, one little spark could send prices up in a bush fire.  Moreover, the longer the Fed can seemingly get away with their efforts to inflate in perpetuity, the greater the disaster that awaits us.

In the meantime, their policies are not without consequences.  Price distortions flourish to the extent they appear normal.  Nevertheless, upon second glance, apparent incongruities greet us everywhere we look.

The sad fact is an honest day’s work has been debased to where it’s no longer rewarded with an honest day’s pay.  At the same time the positive effects of productive labor, diligent savings, and prudent spending now take a lifetime – or more – to fully manifest.

Conversely, the negative effects of borrowing gobs of money and taking abundant risks can masquerade as shrewd business acumen for extended bubble periods.


3-Real Median Household Income

Even when deflated by the government’s own flawed “inflation” measurements, real median household income is back to where it was 20 years ago already. This is definitely not a sign of economic progress. In fact, this datum is testament to how much capital has been malinvested and hence wasted due to Fed policy-inspired serial credit and asset bubbles – click to enlarge.


Earthquake Economics

During an economic boom, particularly a boom puffed up with the Fed’s cheap credit, madmen get rich.  They borrow money at an artificial discount and place big bets on rising asset prices.

They don’t care they are placing those bets within a dangerous seismic zone.  The rewards are too great.  Eventually asset bubbles always exhaust themselves.  Price movements reverse.  They stop inflating.  They start deflating.

Subsequently, as the bubble exhales, the risk taking beneficiaries of the expansion are exposed.  The downside, no doubt, is less pleasant than the upside.  Ask U.S. oil shale producers.  Just 18 months ago they were raking in cash hand over fist.  Lenders were tripping over themselves to extend credit for fracked wells.

But how quickly things change.  Oil prices fell below $30 per barrel on Tuesday.  Break-even costs for many producers are double that – or more.  In other words, lenders and borrowers alike are staring the downside into the face now.


4-Oil Debt

Sitting on a powder keg: oil-related debt has experienced staggering growth – reaching a new peak at what appears to be an exceptionally inopportune juncture, to put it mildly.


In fact, according to a report from AlixPartners, North American oil-and-gas producers are losing nearly $2 billion every week at current prices.  Naturally, capital could only be misdirected to this extent under errant central bank policies of mass credit creation.

Several more slips like this one and the President’s strongest, most durable economy in the world could backslide into recession. On top of that, ‘the big one’ could rupture at any moment

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Re: S&P 500 Index Movements
« Reply #66 on: January 17, 2016, 01:54:10 PM »

Not just oil and China, tech is falling apart
Tae Kim   | @firstadopter
Friday, 15 Jan 2016 | 3:37 PM ET
Justin Sullivan / Staff | Getty Images News
Although the plunge in oil prices and China's stock market dominate the headlines, new developments this week show another key leg is faltering — technology stocks.

Nasdaq is down more than 10 percent for the month, on pace for its worst monthly performance since October 2008, during the financial crisis. The Market Vectors Semiconductor ETF is down more than 12 percent year-to-date. Both are tracking significantly worse than the general market.

Intel dropped more than 8 percent Friday after reporting weaker than expected data center segment sales and financial guidance. After taking account of the $400 million revenue benefit from the recent Altera acquisition, Intel's first quarter forecast was lower than historical seasonality norms.

"This outlook represents a soft start to the year, as we remain cautious on the level of economic growth, particularly in China," Intel's chief financial officer Stacy Smith said on the earnings conference call Thursday, according to a FactSet transcript.
Intel's disappointing news follows the market research firm IDC's report Tuesday, which stated 2015 was the worst annual decline for PC shipments in history.

It's not just the computer business that is fading. The vaunted smart-phone business is starting to sputter too.

Best Buy disheartened technology investors looking for an end-market bottom Thursday, when it announced weaker-than-expected holiday sales. The largest electronics retailer reported a domestic comparable sales decline of 7.2 percent year-over-year in the computing and mobile phones segment, during the nine weeks ending Jan. 2.

Analog Devices, a key component supplier for Apple's iPhone, revised lower January quarter revenue guidance Thursday from its previous forecast of $805 million to $855 million to a new range of $745 million to $765 million.

The company blamed, "weaker than forecast customer demand in the company's portable consumer business unit, which began in December, and is expected to continue into the second fiscal quarter."

As computer and smartphone chip fundamentals worsen, investors should stay cautious on companies reliant on the sectors. Here are tech stocks investors may want to avoid

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Re: S&P 500 Index Movements
« Reply #67 on: January 17, 2016, 02:11:27 PM »

CNN Reassures Investors: "Don't Panic... America's Economy Is Still In Good Shape"
Tyler Durden's pictureSubmitted by Tyler Durden on 01/16/2016 20:00 -0500

China Great Depression Real estate Shadow Stats Unemployment

Submitted by Mac Slavo via,

Forget for a moment that U.S. stock markets have seen their worst start to a new year since the Great Depression or that some $2.5 trillion in wealth has been evaporated in less than two weeks.

CNN says it’s hardly the time to panic:

Time to panic? Hardly.
There are plenty of reasons to relax, especially if you are a U.S investor. Here are the top two:
1. America’s economy is still in good shape.
2. Staying in stocks pays off. Since World War II, investors who remained in stocks for at least 15 years made money
Right now, the U.S. economy is growing. It’s not rock star growth, but 2% to 2.5% a year is good, and the Fed is being very cautious.
More importantly, businesses are still hiring. Over 2.3 million jobs were added last year (the latest data on hiring comes out Friday and it’s widely expected to show more jobs added).
Pay no attention to the fact that last week not a single cargo ship was transporting raw materials in the South China Sea, the first time in history that it has happened. The economy is is great shape and this is not proof that global commerce has literally stopped.

Worry not that Walmart, Macy’s and scores of other retailers had an abysmal holiday season and are now set to lay off tens of thousands of workers. Unemployment, when calculated using models that were used during the Great Depression and that were defined out of existence by the government in 1994 show that some 23% of Americans are out of work. But we don’t calculate like that anymore, so we actually have an employment rate of about 95% in America right now.

And though the economy is officially growing at 2.5% per year based on the government’s trustworthy data, we should absolutely not look at the inflation numbers, which according to Shadow Stats are running about 4% per year. If we did, however, go totally fringe and consider inflation within the context of the economy we might notice that this purported growth is actually negative 2% if not worse.

In fact, we’re doing so well that just 45 million of America’s population of 320 million people are on food stamps right now. By all accounts, a really good sign of not just economic growth, but more jobs and an increase in personal incomes.

And with oil trading at under $30 per barrel, we can see nothing but blue skies going forward because, hey, we’re all paying a dollar less for gas now. We’re sure this will have no effect on the domestic real estate market in places like Texas and North Dakota. Nor will this collapse in oil prices cause debt burdened domestic oil companies to close up shop, potentially leading to a domino affect across the entirety of the U.S. economy. Nor will it have any impact on periphery businesses that service those companies, including all of those restaurants that saw below-minimum wage job growth explode last year.

You have absolutely nothing to worry about. The notion that an economic and financial catastrophe of historic proportions is playing out right before our eyes is the fantasy of internet conspiracy fanatics.

At this point, we encourage our readers to take no action to prepare for the coming calamity, because there is no coming calamity.

Carry on. Everything is awesome. It really is different this time.

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Re: S&P 500 Index Movements
« Reply #68 on: January 17, 2016, 02:25:39 PM »

Barron’s 2016 Roundtable, Part 1: A World of Opportunities
Our nine investment pros see lots of cheap stocks, but little chance that the market will rally sharply in 2016. Why global growth is challenged, rates will stay low, and India could prosper.

Order Reprints
January 16, 2016
Serious, substantive, sobering. Alas, we’re not referring to any of this year’s presidential contenders, but to the thoughtful talk of economics, markets, and investments that dominated the 2016 Barron’s Roundtable. Turbulent times demand such an appraisal, and that’s what our nine investment panelists delivered in spades.

Optimism was in short supply at our annual gathering, held last Monday at the Harvard Club of New York, probably owing, in part, to stocks’ horrific swoon the prior week. Opinions were as plentiful as troubled energy bonds, however. Broadly speaking, these Wall Street luminaries see more stock market turmoil, junk-bond mayhem, and global strife in the year ahead. They also see Hillary Clinton winning the White House—except for those who think the vote will go to Donald Trump.

Photo: Brad Trent for Barron's
Some ’round the table expect U.S. stocks to end the year flat or down, while others see modest gains on the order of 7%. Nearly all agree that judiciously buying undervalued equities will yield far greater returns than sticking with index funds. Our panelists expect the U.S. economy to expand only modestly this year, by a bit more than 2%, while China’s economy will continue to struggle, leading to further devaluation of the Chinese currency and continued pressure on commodities and emerging markets.

2015 Roundtable Report Card

2015 Mid-Year Roundtable Report Card

The group thinks the Federal Reserve, which finally lifted interest rates in December for the first time in seven years, won’t hike four more times during 2016, notwithstanding its stated intentions. That’s because market conditions simply won’t allow it. Indeed, Fed Chair Janet Yellen might even be forced to ease again after lifting rates one more time, says Jeffrey Gundlach, one of the world’s best bond investors, co-founder of Los Angeles–based DoubleLine Capital, and a newcomer to the Roundtable. The other fresh face in the crowd is that of William Priest, CEO and co-chief investment officer of New York’s Epoch Investment Partners, who boasts a long and successful record of mining macroeconomic trends to identify smart investments.

Gundlach is bracingly bearish, Priest only slightly less so. Brian Rogers, however, chairman of T. Rowe Price and one of this week’s two featured stockpickers, is an optimist by nature. These days, he is buying shares of companies that have been excessively punished by investors, and that sport healthy dividends and strong financials. American Express (ticker: AXP) and Macy’s (M) are high on his list.

Oscar Schafer, chairman of Rivulet Capital in New York, is also a stockpicker, who bargain-hunts among mid- and small-cap names. He notes that the market’s smaller fry have been in a stealth bear market for the past year, even as the Facebooks and Amazons of the world have gone to the moon. Yet Oscar likes the prospects for three smaller stocks, including Calpine (CPN), the merchant power producer, which he highlights in this week’s Roundtable issue, the first of three.

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Re: S&P 500 Index Movements
« Reply #69 on: January 18, 2016, 07:28:34 AM »

Oil about to get bullish, but stocks another story: Analyst
Leanne Miller   | @LeanneBMiller
2 Hours Ago
COMMENTSJoin the Discussion

On Friday, U.S. Brent crude hit a fresh 12-year low as fears that the lifting of Iranian sanctions could flood an already oversupplied market for crude.

In spite of the sell-off, the man who correctly saw the steep market correction in August told CNBC that investors would be smart to buy oil at these levels — and short the stock market.

"Markets estimate the probability of a spike in oil, and a bear market at about 3 percent," JPMorgan's Marko Kolanovic, told the "Fast Money" last week. "But we think it's actually much higher."

Kolanovic's theory comes from looking at past instances of when crude has dramatically underperformed the equities market, as it is on Friday. In each of the 10 instances in the last 30 years this happened, oil eventually came back with a vengeance.

By the end of the year, the Global Head of Derivative and Quantitative strategy says $45-$50 oil is fully reasonable to expect while "the doubling of oil prices to $60 is actually quite possible."

Shareholders observe the stock market at a stock exchange corporation in Nantong, China.
Buckle up: China could rock markets next week

China's yuan could tumble 10% or more

Late Friday, analysts at Goldman Sachs told clients in a research note that a key theme for the year will be "real fundamental adjustments that can rebalance markets to create the birth of a new bull market, which we still see happening in late 2016." The bank expects U.S. crude prices to rebound to $40 per barrel sometime before July.
So what exactly could send crude higher?
Potential drivers of oil, Kolanovic told CNBC, are a large covering of record shorts, or investor bets that crude will continue to slide. Additionally, the stabilization of many emerging markets that may lead to an uptick in demand, and the prospect that markets could finally see supply cuts agreed upon by oil producers, could also boost prices, he added.
"This convergence can happen in two ways," the analyst said. "You can have oil going higher or you can have S&P 500 Index going lower, or some combination of the two," Kolanovic said. "We think this time isn't different than history, and we do think we'll see some convergence of that spread."

Bear market coin toss

In equities, there are even more forces at play that could send the S&P into a bear market.
Triggers that will send the index lower are everything from stagflation, an "earnings recession" for S&P 500 stocks, change in investor sentiment, China's slowdown and consistent Fed hikes, Kolanovic says.
In his estimation, when you take a close look at the history of bull and bear markets over the last 50 years, there are a total of 20 cycles that correlate highly to the current market, both in size and duration. The average bull market lasts four years with returns of 90 percent, while the average bear market lasts one year, with an average pullback of 33 percent.
"If the bull market is to end now, it would be in line with history," Kolanovic told "Fast Money" producers. "I'm reading that there is more of a 50/50 chance rather than a 25 percent chance of going into a bear market."

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Re: S&P 500 Index Movements
« Reply #70 on: January 18, 2016, 08:40:17 AM »

The Fed's Stunning Admission Of What Happens Next
Tyler Durden's pictureSubmitted by Tyler Durden on 01/17/2016 11:31 -0500

Bank of America Bank of America Bank of International Settlements Bill Gross Bond Bridgewater Federal Reserve France Great Depression Monetary Policy Money Supply Nikkei None Quantitative Easing Recession recovery Switzerland

Following an epic stock rout to start the year, one which has wiped out trillions in market capitalization, it has rapidly become a consensus view (even by staunch Fed supporters such as the Nikkei Times) that the Fed committed a gross policy mistake by hiking rates on December 16, so much so that this week none other than former Fed president Kocherlakota openly mocked the Fed's credibility when he pointed out the near record plunge in forward breakevens suggesting the market has called the Fed's bluff on rising inflation.

All of this happened before JPM cut its Q4 GDP estimate from 1.0% to 0.1% in the quarter in which Yellen hiked.

To be sure, the dramatic reaction and outcome following the Fed's "error" rate hike was predicted on this website on many occasions, most recently two weeks prior to the rate hike in "This Is What Happened The Last Time The Fed Hiked While The U.S. Was In Recession" when we demonstrated what would happen once the Fed unleashed the "Ghost of 1937."

As we pointed out in early December, conveniently we have a great historical primer of what happened the last time the Fed hiked at a time when it misread the US economy, which was also at or below stall speed, and the Fed incorrectly assumed it was growing.

We are talking of course, about the infamous RRR-hike of 1936-1937, which took place smack in the middle of the Great Recession.

Here is what happened then, as we described previously in June.

[No episode is more comparable to what is about to happen] than what happened in the US in 1937, smack in the middle of the Great Depression. This is the only time in US history which is analogous to what the Fed will attempt to do, and not only because short rates collapsed to zero between 1929-36 but because the Fed’s balance sheet jumped from 5% to 20% of GDP to offset the Great Depression.
Just like now.
Follows a detailed narrative of precisely what happened from a recent Bridgewater note:

The first tightening in August 1936 did not hurt stock prices or the economy, as is typical.
The tightening of monetary policy was intensified by currency devaluations by France and Switzerland, which chose not to move in lock-step with the US tightening. The demand for dollars increased. By late 1936, the President and other policy makers became increasingly concerned by gold inflows (which allowed faster money and credit growth).
The economy remained strong going into early 1937. The stock market was still rising, industrial production remained strong, and inflation had ticked up to around 5%. The second tightening came in March of 1937 and the third one came in May. While neither the Fed nor the Treasury anticipated that the increase in required reserves combined with the sterilization program would push rates higher, the tighter money and reduced liquidity led to a sell-off in bonds, a rise in the short rate, and a sell-off in stocks. Following the second increase in reserves in March 1937, both the short-term rate and the bond yield spiked.
Stocks also fell that month nearly 10%. They bottomed a year later, in March of 1938, declining more than 50%!
Or, as Bank of America summarizes it: "The Fed exit strategy completely failed as the money supply immediately contracted; Fed tightening in H1’37 was followed in H2’37 by a severe recession and a 49% collapse in the Dow Jones."

* * *

As it turns out, however, the Fed did not even have to read this blog, or Bank of America, or even Bridgewater, to know the result of its rate hike. All it had to do was to read... the Fed.

But first, as J Pierpont Morgan reminds us, it was Charles Kindleberger's "The World in Depression" which summarized succinctly just how 2015/2016 is a carbon copy of the 1936/1937 period. In explaining how and why both the markets and the economy imploded so spectacularly after the Fed's decision to tighten in 1936, Kindleberger says:

"For a considerable time there was no understanding of what had happened. Then it became clear. The spurt in activity from October 1936 had been dominated by inventory accumulation. This was especially the case in automobiles, where, because of fears of strikes, supplies of new cars had been built up. It was the same in steel and textiles - two other industries with strong CIO unions."
If all off this sounds oddly familiar, here's the reason why: as we showed just last week, while inventories remain at record levels, wholesale sales are crashing, and the result is that the nominal spread between inventories and sales is all time high.

The inventory liquidation cycle was previewed all the way back in June in "The Coming US Recession Charted" long before it bacame "conventional wisdom."

Kindleberger continues:

When it became evident after the spring of of 1937 that commodity prices were not going to continue upward, the basis for the inventory accumulation was undermined, and first in textiles, then in steel, the reverse procees took place.
Oil anyone?

And then this: "The steepest economic descent in the history of the United States, which lost half the ground gained for many indexes since 1932, proved that the economic recovery in the United States had been built on an illusion."

Which, of course, is what we have been saying since day 1, and which even such finance legends as Bill Gross now openly admit when they say that the zero-percent interest rates and quantitative easing created leverage that fueled a wealth effect and propped up markets in a way that now seems unsustainable, adding that "the wealth effect is created by leverage based on QE’s and 0% rates."

And not just Bill Gross. The Fed itself.

Yes, it was the Fed itself who, in its Federal Reserve Bulletin from June 1938 as transcribed in the 8th Annual General Meeting of the Bank of International Settlements, uttered the following prophetic words:

The events of 1929 taught us that the absence of any rise in prices did not prove that no crisis was pending. 1937 has taught us that an abundant supply of gold and a cheap money policy do not prevent prices from falling.
If only the Fed had listened to, well, the Fed.

What happened next? The chart below shows the stock market reaction in 1937 to the Fed's attempt to tighten smack in the middle pf the Great Depression.

If the Fed was right, the far more prophetic 1937 Fed that is not the current wealth effect-pandering iteration, then the market is about to see half its value wiped out.

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Re: S&P 500 Index Movements
« Reply #71 on: January 19, 2016, 07:17:41 AM »

Here's something unusual about the sell-off: Trader
Amanda Diaz   | @CNBCDiaz
8 Hours Ago
COMMENTSJoin the Discussion

Stocks are swimming in a sea of red as the S&P 500 Index plunged to levels not seen since October 2014.

Despite the jarring move lower, the market's so-called fear gauge, or VIX, has remained unusually calm.

"What we've seen out of the options market is the lack of expectation of this sell-off that came, volatility was really muted," Harvest Volatility Group's Dennis Davitt told CNBC's "Trading Nation" last week.

"Most of the conversations on options trading desks this week up and down Wall Street were about the lack of the performance that we're seeing in the VIX," he added.

The VIX, which trades inversely with the S&P 500, briefly peeked above 30 on Friday. Yet the index has steadily traded near 25 for the majority of this year's brutal tumble. That's significantly lower than the levels seen during the August swoon.
"With the worst market opening in the last 100 years, we're certainly not seeing that in the options space," he added.
For Davitt, that could mean that this is an orderly pullback rather than something more, but the technicals are telling a different story.

Read MoreThese are risks for markets in week ahead

'More and more'

"What we've noticed in the past two weeks is a loss of momentum that's more than just short term," said BTIG technician Katie Stockton. "More and more stocks are participating in the down move."

Out of the 30 stocks in the Dow Jones Industrial average, Wal-Mart is the only one able to eke out a gain in 2016, with many stocks trading at their August lows.
"It's very much a top-down move, it's a market driven move, not company specific," added Stockton. "We have a lot of breakdowns on the charts. Stocks are taking out levels where they previously had buying interest and that includes a lot of the major indices."
The S&P 500, Dow and Nasdaq closed last week firmly in correction territory, with each index down roughly 12 percent from their respective highs

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Re: S&P 500 Index Movements
« Reply #72 on: January 19, 2016, 07:22:13 AM »

One reason this selloff may not mean a crisis is coming

By Barbara Kollmeyer
Published: Jan 18, 2016 10:38 a.m. ET

The bear growls alone sometimes.
While a stock market selloff and a recession have gone hand in hand in the past, investors would be wise to not automatically assume the two are joined at the hip.

That’s the latest wisdom from A Wealth of Common Sense blogger Ben Carlson, who tackled the “recession watch” that has started to grip many investors on the heels of the worst start for U.S. stocks in history. For 2015 so far, the Dow industrials DJIA, -2.39%  and S&P 500 index SPX, -2.16%   are down at least 8%, and the Nasdaq Composite Index COMP, -2.74%  has shed more than 10%.

Four of the last eight economic downturns have come alongside big market crashes — 1929-32, 1937-38, 1973-74, 2000-2002 and 2007-2009 — he noted in a blog post Sunday. For that reason, some investors have started watching for signs of an economic downturn.

He himself doesn’t see a recession on the cards, noting that “we don’t generally go into a recession until excesses have built up in the system. It’s the old adage that you can’t kill yourself jumping off of a 2-foot ledge.”

As for the solidity of that relationship, he says pullbacks for stocks have also occurred without an accompanying recession. “Double-digit losses and even bear markets can certainly occur without a big economic downturn,” said Carlson, who notes that that’s been the case around one out of every five years since the late 1930s.

His chart shows the number of double-digit declines the S&P 500 has seen that haven’t come with a recession:

Wealth of Common Sense
Now, just to keep you from weeping in your beers too copiously, Carlson has also charted what the markets have done five and 10 years after those no-recession double-digit drops for stocks — such as a 103% bounce for the S&P 500, five years after melting down in 2010:

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Re: S&P 500 Index Movements
« Reply #73 on: January 19, 2016, 07:32:56 AM »

With Bulls At A Decade Low An Oversold Bounce Is Imminent, But JPM Repeats To Sell Any Rips
Tyler Durden's pictureSubmitted by Tyler Durden on 01/18/2016 14:57 -0500

Bear Market Recession Yield Curve

One week ago, and just days before Kolanovic again warned - correctly - that a market slump is imminent, JPM's "other" Croat, Mislav Matejka said to "Use Any Bounces As Selling Opportunities." Any bulls who listened to him are in less pain than those who didn't. So what does Matejka think now that all indices are in correction territory and a majority of stocks are in a bear market?

The short answer: an oversold bounce is imminent. Here's why:

A number of tactical indicators we follow are suggesting the market is getting close to being oversold in the very short term. The Bull-Bear spread hit -28%, one of the lowest readings since March ’09.

Over that period, every time Bull-Bear moved to this level, equities were up on 1, 3 and 6 months.

Within the survey, the proportion of bulls fell to the lowest level since ’05.

Also, S&P500 RSI  last week dipped below 30, to oversold territory.

Equities were on average up 4% over the next 1 month, on most occasions, from these levels of RSI.

Finally, Macro HF beta has moved closer to zero – suggesting that investors have de-risked.


To be sure a rebound higher to close the "gaps" is also the current case of Loic Schmid, head of asset management at Geneva Swiss Bank, who anticipates a 6-8% rebound higher, in line with JPM's expectations.

How big does JPM believe the bounce will be: "perhaps up to half of the earlier decline could be unwound."

What happens next? As JPM itself admits: fade any initial rebound, and STFD. Here is JPM again:

The key message in our view stays to use any short term, few weeks, market stabilization as an opportunity to sell on a 6, 12 and perhaps even 24 month horizon. At end November we cut our long held structural OW on equities, and believe the regime has shifted to the bearish one for stocks.
The big picture is that we have entered the bear market – we think rallies should ultimately be sold. While oversold markets suggest a near term bounce is likely, we would recommend using any strength as a selling opportunity from a medium term perspective.
Our structural stance on equities has changed at end November. In a nutshell, we believe that the bull market is finished, and find the risk-reward for stocks not attractive anymore over a medium term horizon.

In addition, the Fed typically doesn’t start hiking after a period of worsening credit spreads, in contrast to what is happening currently.
Finally, the yield curve is flattening post the latest hike, and bonds are rallying, in contrast with past observations. We think these are ominous signals.

In our view, one doesn’t need growth weakness to materialize in order to justify a bearish equity call. Of course, if the US is slipping into a recession, and consequently profit margins are about to fall, the significant downside can be very easily imagined.
We fear though that equities could perform poorly even in the case of US growth staying resilient for longer. The continued Fed hiking will likely prop up the USD, which in turn would put additional pressure on CNY to depreciate, and on credit spreads to widen, as well as on commodities to fall => resulting in lower equities. This is what defines a worsening risk-reward for stocks.
To summarize: BTFD is dead, long live BTFD... or in this case STFR.

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Re: S&P 500 Index Movements
« Reply #74 on: January 19, 2016, 08:51:30 PM »

Opinion: The U.S. stock market’s fate hangs on this critical number

By Howard Gold
Published: Jan 19, 2016 5:22 a.m. ET

Equities are falling to a support level that will determine if there’s a bear market

If stocks fall below 1867.61, stock market technicians say, the bull market is over.
The U.S. stock market faces a crucial test Tuesday after the long weekend.

After the worst 10-day start of a calendar year ever, the major stock market averages are on the cusp of the first real bear market since the financial crisis.

Bullish and bearish technicians agree on one make-or-break number as the threshold that will determine whether this latest correction will become a bear market, generally defined as a 20% decline from a previous peak.

What’s the number? The S&P 500 Index’s Aug. 25 correction closing low of 1867.61. That, technicians agree, is the support level the market must hold for the bull to continue. It’s the market’s answer to Powerball, though this time it’s winner take all.

“The support break will occur if and when the index falls below its August low of 1,867, to the nearest penny,” wrote the bearish Michael Kahn in his “Getting Technical” column in

‘For me, almost everything is in place for the third cyclical bear market of the 21st century.’
Michael Kahn in his ‘Getting Technical’ column
“The S&P below 1,875-1,925 spells ‘bear market’ and above 2,135 … spells ‘continuation of the bull market,’ ” wrote the bullish Ron Meisels in his Phases & Cycles newsletter.

That support level is about 13% below the S&P 500’s all-time closing high of 2130.82 on May 21. Since then, the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite index have had a couple of sell-offs and rallies but have been unable to match their previous highs.

That may turn out to be a critical failure for the bulls.

“… The bull needs to re-assert itself soon in a visible up trend,” wrote Meisels. “The S&P 500 recovered well from its August/September lows, but … the inability of bullish forces to put together a concerted rally and break out above this recovery high [of 2,116 in November] remains a big concern.”

In fact, the major averages have been in technical down trends for months.

“The percent of [New York Stock Exchange] stocks trading above their 200-day moving averages has been less than 50% since June … and the NYSE composite index itself has been in decline since May, telling us that the average stock already is in a bear market,” wrote Kahn. “For me, almost everything is in place for the third cyclical bear market of the 21st century.”

Meisels, however, cited the high percentage of stocks below their 10- and 30-week moving averages as contrarian indicators; they’re at levels nearly identical to where they were at the August lows, which were followed by the big September-October rally that Meisels called correctly when we spoke last fall.

As of last week, Meisels was expecting the final leg of the bull market to take the S&P 500 above its previous highs.

“A move above 2,116 would change the pattern of gently declining highs that has been in force since last May and would place the S&P 500 firmly above its 200-day moving average,” he wrote.

But that could happen only if the S&P 500 holds current support levels and keeps from falling, and staying, below 1,867.

What if it doesn’t? According to some technicians, the next major support level would be the previous S&P 500 all-time high of 1,575, which it first surpassed in March 2013. That would mark a 26% decline from its June 2015 all-time high.

As I wrote last week, the combination of a struggling global economy, weak earnings, a strong dollar and higher interest rates should be enough to push the markets into the next bear.

I think that 26% drop is about what we’ll get in a classic cyclical bear market, which I don’t expect to be accompanied by a financial crisis like the last one was.

So watch that magic number of 1,867 in the coming days; it may tell you all you need to know about where the market is going in 2016.

Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers exclusive market commentary and low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold

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Re: S&P 500 Index Movements
« Reply #75 on: January 20, 2016, 05:37:19 AM »



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Re: S&P 500 Index Movements
« Reply #76 on: January 20, 2016, 07:16:02 AM »

Why This Slump Has Legs
Tyler Durden's pictureSubmitted by Tyler Durden on 01/19/2016 10:14 -0500

Brazil Capital Markets Central Banks China Circuit Breakers ETC Eurozone Federal Reserve France Germany Greece Housing Market Ireland Mars Portugal Reality recovery Shadow Banking St Louis Fed St. Louis Fed Testimony

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

We’ve only really been in two weeks of trading in the new year, things are looking pretty bad to say the least, so predictably the press are asking -and often answering- questions about when the slump will be over. Rebound, recovery, the usual terminology. When will we get back to growth?

For me personally, but that’s just me, that last question sounds a bit more stupid every single time I hear and read it. Just a bit, but there’s been a lot of those bits, more than I care to remember. Luckily, the answer is easy. The slump will not be over for a very long time, there will be no rebound or recovery, and please stop talking about a return to growth unless you can explain what you want to grow into.

I’m sorry, I know that’s not what you want to hear, but life’s a * and so’s the economy. You’ve lived on pink fumes for a long time, most of you for their whole lives, but reality dictates that real ‘growth’ stopped decades ago, and you never figured that out because, and I quote here (see below), you and the world you’re part of became “addicted to borrowing money, spending it, and passing this off as ‘growth'”.

That you believed this was actual growth, however, is on you. You fell for a scam and you’re going to have to pay the price. If there’s one single thing people are good at, it’s lying. It’s as old as human history, and it happens every day, so you’re no exception to any rule. You’re perhaps just not particularly clever.

How do we know a ‘recovery’ is so far off it’s really no use to even talk about it? As I said, it’s easy. Let me lead this in with a graph I saw just today, which deals with a topic the Automatic Earth has covered a lot: marginal debt, or more precisely, the productivity/growth gained from each additional dollar of debt.

Please note, this particular graph deals with private non-financial debt only, we’ll get to other kinds of added debt, but that restriction is actually quite illuminating.

Now of course, you have to wonder about the parameters the St. Louis Fed uses for its data and graphs, and whether ‘growth’ was all that solid in the run up to 2008. There’s plenty of very valid arguments that would say growth in the 1960’s was a whole lot more solid than that in the naughties, after the Glass-Steagall repeal, and after the blubber.

However, that’s not what I want to take away from this, I use this to show what has happened since 2008, more than before, when it comes to “passing debt off as ‘growth'”.

But it’s another thing that has happened since 2008, or rather not happened, that points out to us why this slump will have legs. That is, in 2008 a behemoth bubble started bursting, and it was by no means just US housing market. That bubble should have been allowed to fully deflate, because that is the only way to allow an economy to do a viable restart.

Instead, all that has been done since 2008, QE, ZIRP, the works, has been aimed at keeping a facade ‘alive’, and aimed at protecting the interests of the bankers and other rich parties. That facade, expressed most of all in rising stock markets, has allowed for societies to be gutted while people were busy watching the S&P rise to 2,100 and the Kardashians bare 2,100 body parts.

It was all paid for, apart from western QE, with $28 trillion and change of newfangled Chinese debt. The problem with this is that if you find yourself in a bubble and you don’t go through the inevitable deleveraging process that follows said bubble in a proper fashion, you’re not only going to kill economies, you’ll destroy entire societies.

And that is not just morally repugnant, it also works as much against the rich as it does against the poor. It’s just that that is a step too far for most people to understand. That even the rich need a functioning society, and that inequality as we see it today is a real threat to everyone.

Recognizing this simple fact, and the consequences that follow from it, is nothing new. It’s why in days of old, there were debt jubilees. It’s also why we still quote the following from Marriner Eccles, chairman of the Federal Reserve under FDR and Truman from 1934-1948, in his testimony to the Senate Committee on the Investigation of Economic Problems in 1933, which prompted FDR to make him chairman in the first place.

It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they cannot save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying.
It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.
Everything would all be so much simpler if only more people understood this, that you need a – fleeting, ever-changing equilibrium- to prosper.

Instead, we’re falling into that same trap again. Or, more precisely, we already have. We have been fighting debt with more debt and built the facade put up by the Fed, the BoJ and the ECB, central banks that all face the same problems and all take the same approach: save the rich at the cost of the poor. Something Eccles said way back when could not possibly work.

Anyway, so here are the graphs that prove to us why the slump has legs. There’s been no deleveraging, the no. 1 requirement after a bubble bursts. There’s only been more leveraging, more debt has been issued, and while households have perhaps deleveraged a little bit, though that is likely strongly influenced by losses on homes etc. plus the fact that people were simply maxed out.

First, global debt and the opposite of deleveraging:


And global debt from a longer, 65 year, more historical perspective:


It’s a global debt graph, but it’s perhaps striking to note that big ‘growth’ spurts happened in the days when Reagan, Clinton and Obama were the respective US presidents. Not so much in the Bush era.

Next, China. What we’re looking at is what allowed the post 2008 global economic facade to have -fake- credibility, an insane rise in debt, largely spent on non-productive overinvestment, overcapacity highways to nowhere and many millions of empty apartments, in what could have been a cool story had not Beijing gone all-out on performance enhancing financial narcotics.


Today, the China Ponzi is on its last legs, and so is the global one, because China was the last ‘not-yet-conquered’ market large enough to provide the facade with -fleeting- credibility. Unless Elon Musk gets us to Mars very soon, there are no more such markets.

So US debt will have to come down too, belatedly, with China, and it will have to do that now. because there are no continents to conquer and hide the debt behind. We’re all going to regret engaging in the debt game, and not letting the bubble deflate in an orderly fashion when we still could, but all those thoughts are too late now.


What the facade has wrought is not just the idea that deleveraging was not needed (though it always is, after every single bubble), but that net US household worth rose by 55% in the 6-7 years since the bottom of the crisis, an artificial bottom fabricated with…more debt, with QE, and ZIRP.


Meanwhile, in today’s world, as stock markets go down at a rapid clip, China, having lost control of a market system it never had the control over that Politburos are ever willing to acknowledge they don’t have, plays a game of Ponzi whack-a-mole, with erratic ‘policies’ such as circuit breakers and CIA-style renditions of fund managers and the like.

And all the west can do is watch them fumble the ball, and another one, and another. And this whole thing is nowhere near the end.

China bad loans have now become a theme, but the theme doesn’t mean a thing without including the shadow banking system, which in China has been given the opportunity to grow like a tumor, on which Beijing’s grip is limited, and which has huge claims on local party officials forced by the Politburo to show overblown growth numbers. If you want to address bad loans, that’s where they are.

Chinese credit/debt graphs paint only a part of the picture if and when they don’t include shadow banks, but keeping their role hidden is one of Xi’s main goals, lest the people find out how bad things really are and start revolting. But they will anyway. That makes China a very unpredictable entity. And unpredictable means volatile, and that means even more money flowing out of, and being lost in, markets.

The ‘least worst’ place to be for what money will be left is US dollars, US treasuries and perhaps metals. But there’ll be a whole lot less left than just about anyone thinks. That’s the price of deleveraging.

The price of not deleveraging, on the other hand, is what we see in the markets today. And there is no cure. It must be done. The price for keeping up the facade rises sharply with each passing day, and the effort will in the end be futile. All bubbles have limited lifespans.

I’ll close this with a few recent words from Tim Morgan, who puts it so well I don’t feel the need to try and do it better.

The Ponzi Economy, Part 1

In order to set the Ponzi economy into some context, let’s put some figures on it. In the United States, total “real economy” debt (which excludes inter-bank borrowing) increased by $19.4 trillion – in real, inflation-adjusted terms – between 2000 and 2014, whilst real GDP expanded by only $3.7 trillion. Britain, meanwhile, added £1.9 trillion of new debt for less than £400bn on “growth” over the same period. I spent part of the holiday period unearthing quite how much debt countries added for each dollar of “growth” over a period starting at the end of 2000 and ending in mid-2015.
Unsurprisingly, the league is topped by Portugal ($5.65 for each $1 of growth), Ireland ($5.42) and Greece ($5.39). Britain’s ratio ($3.46) is somewhat flattering, in that the UK has used asset sales as well as borrowing to sustain its consumption. The average for the Eurozone ($3.54) covers ratios as diverse as Germany (just $1.87) and France ($4.22).
China’s $2.56 looks unexceptional until you note that the more recent (post-2007) number is much worse. Economies which seem to have been growing without too much borrowing (such as Brazil and Russia) are now experiencing dramatic worsening in their ratios, generally in the wake of tumbling commodity prices.
In the proverbial nutshell, then, the world has become addicted to borrowing money, spending it, and passing this off as “growth”. This is a copybook example of a pyramid scheme, which in turn means that the world’s most influential economic mentor is neither Keynes nor Hayek, but Charles Ponzi.
[..] How, in the absence of growth, can inflated capital values be sustained? The answer, of course, is that they can’t. Like all Ponzi schemes, this ends with a bang, not a whimper. This is why I find forecasts of a ‘big fall’ or ‘sharp correction’ in markets hard to swallow. Ponzi schemes don’t end gradually, any more than someone can fall off a cliff gradually, or be “slightly pregnant”.
The Ponzi economy simply continues for as long as irrationality prevails, and then implodes. Capital markets, though, are the symptom, not the cause. The fundamental problem is an inability to escape from an addictive practice of manufacturing supposed “growth” on the basis of borrowed money.
There may be shallow lulls in the asset markets, nothing ever only falls down in a straight line in the real world, but the debt will and must come down and be deleveraged.

The process will in all likelihood lead to warfare, and to refugee movements the likes of which the world has never seen just because of the sheer humbers of people added in the past 50 years.

When your children reach your age, they will not live in a world that you ever thought was possible. But they will still have to live in it, and deal with it. They will no longer have the facade you’ve been staring at for so long now, to lull them into a complacent sleep. And the Kardashians will no longer be looking so attractive either.

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Re: S&P 500 Index Movements
« Reply #77 on: January 20, 2016, 07:17:55 AM »

The Market Stubbornly Refuses To Believe A Crash May Be Coming: Here's Why
Tyler Durden's pictureSubmitted by Tyler Durden on 01/19/2016 14:30 -0500

Bear Market Central Banks Cognitive Dissonance Credit Suisse EuroDollar Evercore Insurance Companies Investment Grade Investor Sentiment Market Manipulation Volatility

The fabric of the market is showing signs of fracturing, as 9 years of declining policy rates and 6 years of QEs failed to kick-off growth, while, as Fasanara Capital's Francesco Filia notes, further easing has a visibly decreasing marginal effectiveness. It is end-of-cycle-type policymaking and market responsiveness and while some markets and sentiment reflect the concerns of a tail-risk-like collapse, stocks remain dissonant in the medium-term to the ongoing rioting against monetary activism and market manipulation by global Central Banks.

As we detailed previously, demand for short-term crash protection increased last week to record highs...

The CS Fear Barometer (which measures 3M sentiment) fell to near a 1-year low of 26%, suggesting constructive medium-term investor sentiment...

And the volatility of VIX is entirely unphased...

So, CS Fear Barometer and vol-of-vol do not show signs of panic and suggest market participants are not protecting for a crash.

Furthemore, S&P 500's 12% drop from top is "simply not enough" given the cross asset collapse around the world, Evercore ISI technical analyst Rich Ross said in note to clients today.

Credit markets, however, have started to suggest some notable concerns growing. As Goldman shows, even Investment grade credit has started to collapse...

Flashing a big warning for stocks in the last week...

And despite the record skews, the cost of downside tail-risk protection in stocks is still notably lower than in credit...

Credit Suisse explains:

Our desk has seen only short-term hedging.
Particularly interesting, insurance companies are buying puts that knockout down 20%.
These puts are cheaper because they go away at the point you may want it most. It suggests insurance companies think the market has 5-10% downside but are not worried about a 20%-plus crash.
The market does not believe there is a systemic pullback/crash coming, so if you are bullish, that's a datapoint to hold onto.
However, if this kind of cognitive dissonance makes you wnat to hedge even more, we remind readers of the stealthy way in which some market particpants are betting on a collapse in stocks... it appears many market participants are piling into par Eurodollar calls:

[the chart shows the cumulative open interest in par calls on eurodollar futures contracts that expire in 2016 and 2017 - basically options on short-term interest rates with a strike price of zero, such that they pay out if the Fed takes rates negative]

When queried whether this is indeed a trade to bet on a market drop, Michael Green responded as follows:

[A reader] thought  this might be an attempt by hedge funds to hedge out their exposure to rising interest rates very cheaply.
My initial idea was that it actually could be a bet on negative rates (if for some reason the Fed had to come back into the picture with QE4).
The bottom line: "Deep OTM puts on the S&P are very expensive while par ED calls are relatively cheap.  In my view, we are that inflection point where the Fed is going to start to waffle…the bear market beckons and they will not be able to stick with their interest rate guidance. Of course, markets tend to frown on Central Bankers revealed as less than omniscient..."
So in short: stock market participants remain convinced that long-lasting 'significant' downside is impossible (despite short-term 'small-drop' hedging), because they expect The Fed to save the world once again. That's why sentiment is extreme but positioning is not and the equity market is simply far from prepared for further (or lower for longers) downside.

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Re: S&P 500 Index Movements
« Reply #78 on: January 20, 2016, 08:53:17 AM »

How to emerge from a ‘death spiral’ in stocks

By Wallace Witkowski
Published: Jan 19, 2016 3:41 p.m. ET

‘High quality’ only real play for those wanting to stay in stocks
Can stocks pull out of their current dive?
As stocks give up their early session gains Tuesday and continue to race south, strategists are reminding investors that a big correction was overdue in the current bull market and that high quality is key for those who want to stay in equities.

The current correction is the kind of sharp one Brian Belski, chief investment strategist at BMO Capital, predicted back in late November in his 2016 forecast.

Belski said the S&P 500 index SPX, +0.05%  could drop as low as 1,800 before finding a bottom. The index is about 12% off its November high, and about 13% off its 52-week high from May. Much of the current selloff hit in January with the index off nearly 9% for the month.

“While the velocity and timing of the pullback is a surprise, the weakness is following normal market correction protocol,” Belski said in a Tuesday note. “Namely, most corrections traditionally occur when you least expect them. Remember, the market does not like change.”

Investors are coping with the December Fed rate hike and the timetable of future hikes, a slump in commodities, geopolitical uncertainty and the coming U.S. election.

However, Belski believes there is a bigger dynamic at work in stocks: The final unwinding of the current cycle that powered this leg of a much larger secular—or long term—bull market. That cycle included high growth in China and emerging markets, strong commodity prices, cheap credit, and a rush into low-quality stocks, he said.

In looking at an average of the last two long-term bull markets since the end of World War II, Belski found that a big correction was likely overdue.

Better late than never?
Investor focus needs to turn away from strategies that were based on central-bank easing and momentum, and back to fundamentals, Belski said, recommending overweight positions in large-cap financial, technology, and consumer-discretionary stocks.

But those fundamentals may be hard to come by as current earnings are already looking at a possible fourth straight quarterly decline.

Fundamentals are falling to their worst levels in years, according to Savita Subramanian, equity and quant strategist at Bank of America Merrill Lynch, in her Tuesday note entitled “What to own in an equity death spiral.”

What Subramanian is concerned about are two growing fundamental weaknesses: That more companies are beating earnings-per-share estimates and missing on revenue than they have since early 2009, and that the gap between reported and adjusted earnings is at its widest since 2008.

But while stocks are very much in correction territory, Subramanian said even growth stocks are underperforming, which is usually not the case ahead of a recession

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Re: S&P 500 Index Movements
« Reply #79 on: January 20, 2016, 08:54:59 AM »

Opinion: Doing nothing may be a sure bet as the stock market seesaws

By Chuck Jaffe
Published: Jan 19, 2016 1:08 p.m. ET

Investors plan to ‘get active’ on expectations of higher volatility
Venture Beat
If the stock market’s early-January action has you contemplating moves to make this year, consider whether increasing your activity is really doing the right thing by your long-term investment strategy.
No matter what the market does this year, investors are ready to be more active in it.

The question is whether that will help them get better results.

According to a survey released last week by the AMG Funds, more than 90% of affluent mutual fund investors plan to maintain or increase their allocations to active funds in 2016, in spite of — or perhaps because of — the sustained to increasing volatility they see over the next 12 months.

While the popular story in the media during the market’s rally from the financial crisis is that active management doesn’t work — and fund flows have shown investors loading up on index funds — the market’s volatility and concerns about a possible downturn make 2016 the kind of time when active management typically does what investors hope for when they take the chance.

When investors “get active,” it can mean a lot of things. While all of those actions are done with good intentions, the results aren’t always a plus.

investors faced with the choice of an investment mirroring the market — staying passive — or going with something ‘designed to reduce volatility and limit downside risk,’ 55% of respondents took the active option.
If the market’s early-January action has you contemplating moves to make this year, consider whether increasing your activity is really doing the right thing by your long-term investment strategy.

Active investing typically involves hiring a manager to make the investment decisions based on their insights, methodology and investment styles. Passive investing uses index funds, and forgoes trying to “beat the market” in favor of achieving the market’s results over time.

The problem with passive investing, for many investors, is that index funds ride the market rollercoaster, which can get nauseating when declines are fast and steep. A fund manager, typically, is expected to inject some downside protection, so that while their fund may not beat the market in good times, it avoids some of the pain in bad times.

Read: The U.S. stock market’s fate hangs on this critical number

With the market historically rising two-thirds of the time — and with active managers saddled with a higher expense ratio than the typical index funds — a majority of active fund managers lag behind their index benchmark over time, which has led to the generalization that passive management is superior.

The problem is that many index investors are active, just not at the fund level.

Using a money manager, financial adviser or their own instincts, they actively manage their passive investments, tilting the portfolio toward, say, large-cap growth stocks when the market is rising but perhaps moving away from stocks in times when the market gets scary.

China's growth is slowest in 25 years(1:32)
Making moves in the name of “tactical asset allocation” — changing index allocations or swapping one index fund for another — is active investing, and can have the same performance-reducing effects as investing in active funds to begin with.

This kind of “actively passive” investing is countered by people who buy and hold active funds, where they don’t chase performance and let managers do their work, so that they passively manage their active funds.

Also read: Here’s how share buybacks can come back to bite shareholders

Ultimately, investors come up with a lot of ways to explain their moves without ever having to fess up to market timing or giving into their fear or greed. They buy on dips or protect their profits against downturns, and thus become tactical; in the face of the market’s recent moves, they’re considering adding to the parts of the market that have gone on sale — like China or oil companies — or they’re steering clear of more pain.

The AMG study results showed that investors faced with the choice of an investment mirroring the market — staying passive — or going with something “designed to reduce volatility and limit downside risk,” 55% of respondents took the active option.

Sadly, there is no guarantee that the active moves an investor makes will actually reduce volatility or limit downside risk; only time will tell if they get what they want.

“The worry I have when I look at the results is if you are nervous about the market — and 95% expect moderate to high volatility this year and they say that high volatility makes them very uncomfortable — what happens by investor behavior is that people tend to withdraw with no sense of when to come back,” said Bill Finnegan, chief marketing officer for the AMG Funds. “You need a strategy as to how you will manage this, whether it is buy-and-hold or some investment policy … active or passive, because otherwise all you are doing is mixing strategies and making moves that feel right in the moment but that work against the long-term tactics that you know you should be following.”

Before getting active in 2016, look first at whether your portfolio needs to be changed.

Could it benefit from rebalancing — where the weight of each holding is put back onto your original plans — or from a new plan?

Whatever you decide, experts suggest making any moves with a plan, rather than simply reacting to the market’s news and volatility.

“You have to avoid chasing the dot; don’t do something for the sake of making a change,” said Jeffrey DeMaso, director of research at Adviser Investments. “You need to be more concerned with reaching your goals than with beating the market all the time. Sticking with what has worked for you is usually better than changing strategies just because the market’s getting scary.

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Re: S&P 500 Index Movements
« Reply #80 on: January 20, 2016, 02:15:35 PM »

Cramer: Charts showing a huge S&P correction could be coming
Abigail Stevenson   | @A_StevensonCNBC
6 Hours Ago
COMMENTSJoin the Discussion

After the vicious sell-off last week, Jim Cramer wanted to know how much more pain the S&P 500 has to endure before it finally bottoms. And what he discovered could be significant.

To answer this important question, he enlisted the help of Carolyn Boroden, a technician who runs and a colleague of Cramer's at

The reason Cramer turned to Boroden is she previously nailed calling the peak of the S&P. When Cramer last checked in with her in June, she said it was time to get cautious about the S&P. In June, she thought the rally for the S&P would peak around 2,138. Sure enough, it peaked at 2,134.

Boroden utilizes a mathematical methodology based on the medieval mathematician Leonardo Fibonacci. He discovered that a key series of ratios tend to repeat themselves over and over again in nature.

These ratios can also appear at key levels in the stock market. Boroden looks at past swings of a stock or index and then utilizes the Fibonacci ratios to find potentially important levels that could change a trajectory.

Given the recent volatility, Boroden believes that this market is vulnerable to the downside. Looking at the S&P 500's weekly chart, she did not like what she saw.

The one spark of hope that Boroden found were two key levels. First was a floor of support between 1,847 and 1,857, which is down 2 percent from current levels. She found a second floor running to 1,832 from 1,838, down about 3 percent.

Boroden noticed the Fibonacci timing cycles suggest that this could trigger a healthy bounce, and it could happen sometime this week.

However, if the S&P 500 breaks down below the floor of support in the 1,830s, then Boroden believes a brutal sell-off could happen. It could even be similar to the magnitude of what happened in the financial crisis.

Read more from Mad Money with Jim Cramer

Cramer Remix: This group is as bad as oil
Cramer: Don't bother buying. It's capital preservation time
Cramer's game plan: Cash is king next week

Projecting the levels from the peak in May 2015, Boroden thinks that the S&P could get hammered down to 1,350, or even as far as 1,225.

"In other words, if we don't hold above the current floor of support, Boroden is not ruling out a massive correction that could take us 28 percent or even 35 percent lower," Cramer said.

Boroden did not say that this will definitely happen, but she does think the potential risk could be enormous. That is why she recommended that if there is a near-term bounce, investors should use the strength to ring the register and raise cash to be prepared for a longer and deeper decline.

"I personally don't believe that this kind of a decline is in the cards, but you need to be aware that right now the charts are saying some very ugly things, and I think it accentuated the caution I've been trying to demonstrate," Cramer said.

Cramer doesn't want to be the bearer of bad news, but he thinks it is important for investors to be aware that the technician that nailed the market peak has found that the S&P's floor of support is in the 1,830s, and it could be a significant level to keep on the radar

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Re: S&P 500 Index Movements
« Reply #81 on: January 21, 2016, 05:48:52 AM »



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Re: S&P 500 Index Movements
« Reply #82 on: January 21, 2016, 05:56:28 AM »



Bounced fr
Intra day low of

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Re: S&P 500 Index Movements
« Reply #83 on: January 21, 2016, 06:01:09 AM »

Bounced fr
Intra day low of

Lowest 1812.22

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Re: S&P 500 Index Movements
« Reply #84 on: January 21, 2016, 07:09:38 AM »

道指瀉565點收市縮至249點 多位名宿嗌冷靜
01月21日(四) 05:01   




技術上,Bespoke Investment Group分析員稱,標指1,862點是「伊波拉低位(Ebola Low)」,今日收報1,859點,反映長達16個月的平穩上升軌遭破壞,並宣布跌穿2014年10月15日大冧市低位,技術上失守了極重大支持,投資者需密切注意該關口會否正式確認跌穿。

現時是否別人恐慌我貪婪時刻?大鱷或許回答是!據外國傳媒報道,億萬富豪、人稱「華爾街超級馬利奧」的Mario Gabelli表示,股市大跌是好事,投資者是時候篩選投資組合,好好選擇優質企業,現時是極佳時機。

投資年資已逾60年、現年86歲、有「基金之神」之稱的領航基金(Vanguard Group)創始人Jack Bogle表示,投資者之所以瘋狂拋售,只是因為市場兵荒馬亂,呼籲現階段想沽貨的投資者冷靜。他說:「請安然坐下,甚麼也不要做,保持原狀。這只是投機者給你的恐慌,不要給他們回應,不用理會他們的行動。」







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Re: S&P 500 Index Movements
« Reply #85 on: January 21, 2016, 07:21:11 AM »

Investors are better off flipping a coin than following Wall Street pros, data shows

By Shawn Langlois
Published: Jan 20, 2016 4:05 p.m. ET

MarketWatch photo illustration/Getty Images, Shutterstock
Hey, don’t let a few market hiccups to start the year *** you out too much. Strategists predict gains by the end of the year! Just like they did last year. And the year before that. And the year before that, all the way back to 1998, according to one Georgetown professor who crunched the numbers during that time frame to come to this conclusion: The Wall Street pros are “full of bull.”

Salil Mehta, in a deep dive for the Statistical Ideas blog, examined 186 public forecasts, which he culled from 19 years of media coverage. For starters, the strategists have called for a positive year more than 95% of the time, while the market has only been up 73% of the time.

In this table, the 10 calls associated with 2016 and 32 associated with flat years were removed.
“In some random circumstances, a predicting firm may be just OK,” he said. “But many of the times the firms’ prediction results over the past 18 years are generally slightly worse than if had you flipped a coin about your own fixed guess as to where markets are headed.”

In the 18 years of predictions, Mehta found that the average annual forecast has been for a gain of 9% a year, while the actual returns over that period have been half that. What’s more, the most optimistic of all the forecasts was nearly 7% more bullish than the best market year of 25%, while the most bearish forecast (-22%) was 26% more optimistic than the worst market year.

“The market provides random noise in all of these, and it’s foolish to act as if one can generally see into the future,” warned Mehta, who for years worked as a research analyst on Wall Street.

At the start of this year, 10 market strategists called for a higher finish, with an average projection of 8%, Mehta pointed out. Federated Investors’s Stephen Auth and his S&P SPX, -1.17%   call for 2,500 was by far the most bullish. Of course, a lot has happened since that initial roundup and targets are being slashed. Auth, for instance, cut his back to 2,150 on the S&P.

That still feels like a long way away considering what we’re seeing this week.

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Re: S&P 500 Index Movements
« Reply #86 on: January 21, 2016, 07:23:22 AM »

Opinion: The bear market in stocks has finally arrived

By Michael Sincere
Published: Jan 20, 2016 4:27 p.m. ET

Veteran investor Mark D. Cook gives three options for protecting your money
ABC News
Mark D. Cook: ‘Every rally in a bear market has no traction. In a bull market, rallies will hold for days or weeks. Now we’re getting sharp “one-day wonders” that fail. Every hope is dashed. That is a strong characteristic of a bear market.’
Investors have noticed that the stock market has gone through a radical change in the past few months.

Veteran investor Mark D. Cook, who pointed out red flags a year ago, feels vindicated. Finally, stock prices confirmed what he saw in 2014: We’re in a bear market and about to go over the cliff, he says. Here is a chat I had with Cook over the weekend.

Why do you still believe we’re in a bear market?

First, the oil and gas situation is a huge problem, and it will continue. We’re not getting bounces. Instead, oil investors just want to sell. The second problem, and it’s just getting started, is China. China is like an athlete that twisted his ankle and needs time to heal. If the ankle doesn’t heal, it will get worse, and that’s what is happening right now.

Is there anything technical that you are looking at?

Yes. First, every rally in a bear market has no traction. In a bull market, rallies will hold for days or weeks. Now we’re getting sharp “one-day wonders” that fail. Every hope is dashed. That is a strong characteristic of a bear market. Second, the NYSE Tick is registering no institutional activity on the buy side. Every rally is a chance for mutual funds to lighten positions. And this is only January. Wait until people look at their January statements. Many will be shocked.

If this is a bear market, how will investors react in the months ahead?

There are four psychological stages that people go through during a bear market. Right now, investors know the market is struggling but most believe it will come back. In fact, many see this as a buying opportunity. Here are the four stages:

Stage 1: Denial

Right now, we’re in the denial stage. Anyone who is bullish is too stubborn to change his or her view. Many people have their head in the sand, and some may not even look at their January statements. Many believe the market will come back. Right now, many are still buying the dips, which does not work in a bear market. This is similar to what has happened to oil.

Stage 2: High Anxiety

In this stage, many investors are like a deer in the headlights. They are frozen and nervous but don’t do anything. They are told by brokers and financial experts to stay calm and don’t panic. We haven’t reached this stage yet.

Stage 3: Fear

In this stage, the rampant bulls finally realize they are in trouble. If they have bought stocks on margin, they might be getting calls from their broker to add money to losing positions. In this stage, they are watching in fear as their portfolio burns. They reluctantly start to take action as fear increases. Often they say to themselves, “When my stock gets back to even, I will sell.”

Stage 4: Panic

This is what I call the “uncle” stage. This is when panicked investors throw in the towel and take action. They want to get out of the market while they still have something left. At this stage, there is huge downside volume and double-digit declines on the indexes. At the end of Stage 4, many people vow to never buy stocks again. We are not even close to this stage yet. Typically, we hit bottom when investors capitulate after losses of 20% to 50% in their stock portfolios

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Re: S&P 500 Index Movements
« Reply #87 on: January 21, 2016, 07:26:25 AM »

Here’s a reason to ignore this plunging market — it knows nothing

By Barbara Kollmeyer
Published: Jan 20, 2016 10:51 a.m. ET

Critical information ahead of the U.S. market’s open
Editors note: A previous version of this article had the wrong chart in Chart of the Day. That chart has been fixed.

How to ignore a market that’s showing all the hallmarks of getting butchered on Wednesday? Not so easy.

Futures point to a cratering for Wall Street at the open as oil gets pounded again, Middle East markets crumble and the dollar careens below ¥117. Asia had a disastrous session as the Nikkei fell into bear-market territory, and the FTSE 100 looks to be headed there soon. Some say the U.S. bear market is already here.

These are “worrying times for investors, as the market shows signs of pure panic and is being dominated by fear as each day brings its new set of challenges,” says James Hughes, chief market analyst at GKFX. The herd leading the herd.

That brings us to our call of the day. Oaktree Capital’s Howard Marks says sure, this market is in a panic — but what does it really know anyway? Read on for what he has to say about the dangers of investors putting too much trust in their screens, and not enough in their own common sense.

Gloomy markets seem to match the mood perfectly in snowy, beautiful Davos, Switzerland. All around the lookout towers, the cream of the global business crop are in an apparent race to see who can best wax lyrical about economic gloom. Check out our stat of the day to see just how downbeat CEOs are.

“The situation is worse than it was in 2007,” William White, chairman of the OECD’s review committee and former chief economist of the Bank for International Settlements (BIS), told The Telegraph. That toxic addition to debt gets an airing as well, as White says the Fed is in a “horrible quandary.”

“Things are so bad that there is no right answer. If they raise rates it’ll be nasty. If they don’t raise rates, it just makes matters worse,” he said.

On with the show.

Key market gauges
Futures for the Dow industrials YMH6, +0.10% and the S&P 500 ESH6, +0.11%  suggest Wall Street is set for a selloff after a brutal day for Asia stocks. The Shanghai Composite COMP, -0.12% fell just 1%, but Hong Kong stocks hit sub-19,000 for the first time since July 201 and the Nikkei NIK, -3.71%  entered bear-market territory, sinking 3.7%. This action has sent investors flocking back to the yen, which busted to a five-month high against the dollar and is crushing a bunch of other currencies. All this as U.S. crude CLH6, +0.25%  dropped below $28 a barrel for the February contract. Brent LCOH6, -3.37%  is nearing sub-$28 again.

Against that backdrop, Europe SXXP, -3.20%  is headed toward the lowest close in a year. And no one is exactly flocking to gold GCG6, -0.44%

The call of the day
Howard Marks, co-chairman of Oaktree Capital, was featured last Friday in this column, with a bullish call to buy while everyone else goes screaming for the exits. He just pushed out another note to clients, and he shows no signs of backing down from that position.

In the note sent out Tuesday, Marks is talking about how much importance should be placed on the current market rout.

“Does the market reflect what people know, or should people base their actions on what the market knows?” asks the investment manager. And his answer is that “if people follow the market’s dictates, they’re taking advice from...themselves!”

Marks stresses that he’s not saying the market is never right when prices go up or down, but “there’s no reason to presume it’s right.”

“Future price movements can only be predicted on the basis of the relationship between price and fundamentals. And, given the market’s short-term volatility and irrationability, this can only be done in the long-term sense. The market has nothing useful to contribute on this subject,” he writes.

Read his full thoughts on the subject here.

The economy
Consumer prices fell again in December are coming at 8:30 a.m. Eastern, while housing starts dropped in the final month of 2015.

The stat
27% — That’s the percentage of CEOs polled at Davos who are confident the global economy will pick up over the next twelve months. The survey comes from PwC’s 19th Annual Global CEO survey.

The buzz
In a market that was already down, banking giant Goldman Sachs GS, -1.96%  said its quarterly profit tumbled due to a $5 billion penalty over mortgage-bond sales in the financial crisis. Shares are off nearly 2%.

AMD AMD, -7.69% is down 7% after the chip maker’s forecast revenue range for the first quarter largely fell short of Wall Street’s expectations.

Netflix NFLX, -0.14%  is up 3% after the streaming giant blew away projections. The monthly price of Neftlix for some members is also going up around $2 for existing subscribers. See a Live Blog recap of Netflix earnings

Royal Dutch Shell RDS.A, -4.21%  is cutting 10,000 jobs in a cost-cutting drive as oil prices slump and as the oil producer eyes a drop in profit of as much as 50%.

A skim of iOS code has revealed that Apple AAPL, +0.08%  could be experimenting with light-based wireless data referred to as Li-Fi, being viewed as a long-term and much faster replacement for Wi-Fi, says blogger Apple Insider. “Unlike your television remote, Li-Fi uses visible light and the modulation happens in a manner imperceptible to the human eye: that means the same bulb that lights your hallway can act as a data access point,” says Sam Oliver, writing for Apple Insider.

Tesla Motors TSLA, -2.94% has filed a federal lawsuit against a German auto parts maker over the latter’s role in designing the “falcon wing” doors on its Model X electric sport-utility vehicle.

Yahoo YHOO, -3.23%  boss Marissa Mayer can’t stem the panic inside the struggling search giant that up to 25% of workers could get the pink slip.

Months after losing his son Beau to brain cancer, Vice President Joe Biden tells the World Economic Forum in Davos that technological and scientific efforts must double up to find a cure for cancer in five years instead to 10 and “eventually end cancer as we know it.”

The quote
Getty Images
Leonardo DiCaprio in Davos Tuesday.
“We simply cannot afford to allow the corporate greed of the coal, oil and gas industries to determine the future of humanity. Those entities with a financial interest in preserving this destructive system have denied and even covered up the evidence of our changing climate.” — Actor Leonardo DiCaprio ripping into Big Oil at the World Economic Forum in Davos Tuesday night. That was after accepting an award for his work on environmental projects.

The chart
When John Q. Public is panicking, is it time to look the other way? Chart-focused blog Daily Shot plugged “sell stocks” into Google Trends, which measures the popularity of specific search terms. This is what it threw up, looking at the period from 2008 to the present.

“The frequency is at the highest level since 2008, as the public wants to know if they should be dumping their portfolios. Scared? Don’t be. When the public is trying to find out if they should be selling their shares from a Google search, it tells us that it’s time to take a contrarian view,” said the newsletter.

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Re: S&P 500 Index Movements
« Reply #88 on: January 21, 2016, 05:37:58 PM »

Traders seem certain Federal Reserve won’t raise interest rates again this year

By Greg Robb
Published: Jan 20, 2016 4:10 p.m. ET

Some economists think market ignoring firmer core CPI
Fed Chairwoman Janet Yellen may be eyeing just one rate hike this year.
WASHINGTON (MarketWatch) — Turmoil in the stock market, falling oil prices and an uncertain outlook for the U.S. and global economy has convinced traders that Federal Reserve won’t be able to deliver on its planned four rate hikes this year.

In fact, trading on fed futures contracts now suggests the market barely expects the Fed to hike only once this year after lift rates for the first time in almost ten years in December.

But some economists think the market is ignoring fresh data released Wednesday by the Labor Department, which shows that core inflation, minus volatile food and energy prices, is grinding higher.

While weak on the surface due to falling costs for food and gasoline, the December CPI report showed that core consumer prices accelerated to a 2.1% rate over the past year, the strongest annual rate since July 2012.

Read more: Inflation falls again in December, CPI finds

The year-over-year increase in core CPI has been rising for seven straight months.

Robert Brusca, chief economist at FAO Economics, said the rise in core CPI likely “hardens the Fed’s resolve” to stick with its four-rate hike path.
“The Fed cannot control markets and now it has core prices in the 2% range for the CPI and still strong job growth. These are metrics to cause some [at the Fed] to stay the course,” he said.

Ham Bandholz, chief U.S. economist at UniCredit Research, said investors should take market views on the future path of rates with a “grain of salt” because they may say more about the state of the stock market than the U.S. central bank.

Last September, Bandholz noted, traders in fed futures contracts delayed their expectations of the first Fed rate hike when the U.S. stock market swooned, only to reverse course and pencil in a December rate hike when financial markets recovered.

With the stock market turmoil, the data suggests “a strong labor market and inflation grinding higher,” he said.

Pause next week
There is broad consensus among economists that the Fed will stand pat at its policy meeting next week.

All eyes will be on the statement issued next Wednesday to see if it contains any hints about March.

Bandholz thinks the Fed will be leery of making major changes. Instead the U.S. central bank will repeat that it “reasonably confident that inflation will rise, over the medium term, to its 2% target.”

Any word changes would take a March rate hike off the table even thought the meeting is 2 months away, he noted.

Not all economists are worried about the rise in core CPI.

Richard Moody, chief economist at Regions Financial Corp., said there is less inflationary pressure in the economy than implied by core CPI inflation. He said rents account for almost half of core CPI and has been driving it higher.

Stephen Stanley, chief economist at Amherst Pierpont, said whether there is a pickup in inflation “is likely to be the single most important issue that determines the pace of Fed rate hikes in 2016.”

Stanley said he expects there will be “a noticeable pickup in inflation this year” while the market mostly looks for little or no increase.

At the moment, the data are supportive of the market’s view, “but it is a long year and it is just getting started,” he said

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Re: S&P 500 Index Movements
« Reply #89 on: January 22, 2016, 05:44:47 AM »



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Re: S&P 500 Index Movements
« Reply #90 on: January 22, 2016, 07:16:03 AM »

Opinion: Dow could fall 5,000 points and still not be ‘cheap’

By Brett Arends
Published: Jan 21, 2016 9:56 a.m. ET

So says a certain stock-valuation analysis

Hard to believe, but the Dow Jones Industrial Average DIA, +0.63%  could fall by another 1,000 to 5,000 points and still not be “cheap” compared with long-term stock-valuation measures.

That’s the stark conclusion from an analysis comparing current stock prices to underlying measures such as per-share revenue, earnings and corporate net worth.

And it suggests that even if we are now overdue for a short-term bounce or rally of some kind, buying heavily into the latest sell-off isn’t the kind of one-way bet that value investors crave.

Stocks are certainly much cheaper than they were a few weeks ago. After the worst start to a new year in Wall Street history, the Dow Jones Industrial Average is down about 10% since Jan. 1. Small-company stocks are now deep in a bear market after falling more than 20% from last spring’s highs.

But cheaper doesn’t necessarily mean cheap.

Even after the sell-off, U.S. stocks are valued at around 1.4 times annual per-share revenue. FactSet says the average since 2001, when it began tracking the data, is 1.3 times revenue. So the Dow could fall another 7%, or over 1,000 points, and still be no lower than its modern-day average.

And the picture looks even worse when you also add in those companies’ soaring debts. According to the Federal Reserve, nonfinancial corporations have increased their total debts since 2007 from $6.3 trillion to over $8 trillion. As FactSet says, total shares plus total debts — the so-called “enterprise value” — of U.S. public companies are now 2.4 times annual per-share revenue, compared with an average of 2.1 times since 2001.

Data from the U.S. Federal Reserve, meanwhile, say U.S. nonfinancial corporate stocks are now valued at about 90% of the replacement cost of company assets, a metric known as “Tobin’s Q.” But the historic average, going back a century, is in the region of 60% of replacement costs. By this measure, stocks could fall by another third, taking the Dow all the way down toward 10,000. (On Wednesday it closed at 15,767.) Similar calculations could be reached by comparing share prices to average per-share earnings, a measure known as the cyclically adjusted price-to-earnings ratio, commonly known as CAPE, after Yale finance professor Robert Shiller, who made it famous.

Even when you compare stocks to the earnings of the past 12 months, it’s hard to say they are in any kind of bargain territory.

At best, depending on how you measure things, you could say they’re no longer wildly expensive.

None of this means the current slump must get worse anytime soon. The only short-term cause of a market selloff is the same: more sellers than buyers. At some point more buyers appear, while some sellers pause for breath. Wednesday afternoon’s turnaround, which saw the Dow erase half of an early 500-point slump, is at least a hopeful sign.

But it certainly casts a cloud over any bargain hunting. And note that these numbers only measure how far the market would have to fall to reach average levels. They do not reflect what would happen if the market did what it has done frequently in the past, and plunged back down to very cheap levels. Maybe that will never happen. Let’s hope. Because when you factor in those numbers, it’s a long way down.

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Re: S&P 500 Index Movements
« Reply #91 on: January 22, 2016, 07:18:08 AM »

Fund flows are sending a bearish signal to international equities

By Ciara Linnane
Published: Jan 21, 2016 2:12 p.m. ET

Investors have yanked billions of dollars from U.S. equity funds this year--but seem complacent about international funds
Getty Images
Investors aren’t that bearish on international equities after declines
A surprising move in non-U.S. fund flows in the first two weeks of the year is a bearish signal for international equities, according to fund tracker TrimTabs Investment Research.

Global equity mutual funds, which exclude U.S. equity funds, posted an inflow of $1.2 billion in January through Tuesday, according to TrimTabs. At the same time, global equity exchange-traded funds saw redemptions of $3.3 billion. That combines to create a net outflow of just $2.1 billion, a surprisingly small number given the heavy selling and losses posted across the world’s stock markets.

Don’t miss: Does the Great Reset of 2016 mean it’s time to buy?

“It’s amazing how hard investors are holding on to these poorly performing international funds,” David Santschi, chief executive officer, TrimTabs
Global equity mutual funds fell 9.1% in the period, while global equity ETFs shed almost 10%, according to TrimTabs data.

“It’s amazing how hard investors are holding on to these poorly performing international funds,” said David Santschi, chief executive officer at TrimTabs. “Perhaps they’re betting that global central bankers will ride to the rescue again, which is what they’ve been conditioned to expect over the past seven years.”

Read: Traders seem certain Federal Reserve won’t raise interest rates again this year

U.S. equity funds fared worse than global funds. U.S. equity mutual funds are down 10.4% in January through Tuesday, while U.S. equity ETFs have lost 11%. But investors have reacted by withdrawing far more money from them than from non-U.S. funds. TrimTabs estimates that investors have pulled $30.9 billion from U.S. equity mutual funds and ETFs in the period.

“Flows of global equity funds certainly aren’t indicative of panic, and they’re also not reflective of the worst ever start to the year for global equity markets,” said Santschi. “How deep do losses have to get before fund investors start bailing?”

To recap, Japan’s Nikkei 225 NIK, -2.43%   has fallen almost 16% in the year so far, and is more than 20% off its most recent high, meaning it has officially entered bear market territory. The Shanghai Composite SHCOMP, -3.23%  has tumbled almost 19% this year. The Hang Seng HSI, -1.82%  is down 15.4%.

In Europe, the FTSE 100 UKX, +1.77%   has lost 9% and entered bear market territory on Wednesday. The German DAX DAX, +1.94%  is down 11%, the Italian FTSE MIB FTSEMIB, +4.20%  is down almost 13% and Spain’s IBEX i IBEX, +1.97%  is down 18%.

In the U.S., the Dow Jones Industrial Average DJIA, +0.74%   has shed more than 8% of its value, while the S&P 500 SPX, +0.52%  is down 7.9%, the Nasdaq Composite COMP, +0.01%   is down about 10% and the Russell 2000 RUT, -0.20%  is down 11.2%.

Read: 7 key charts to watch as the stock market nosedives

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Re: S&P 500 Index Movements
« Reply #92 on: January 22, 2016, 07:19:29 AM »

ReTuRN OF THe BeaR...
Posted by: williambanzai7
Post date: 01/20/2016 - 12:10
What goes up...
Invest In Gold Now As Stock Market To Crash – Faber
Posted by: GoldCore
Post date: 01/21/2016 - 04:47
Faber warns that the S&P 500, which fell to 1,881 on the 19th of January, could drop to its 2011 low below 1,200.

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"Investors Should Sell Any Bounce Back" Top Investors See More To Come
Tyler Durden's pictureSubmitted by Tyler Durden on 01/21/2016 15:10 -0500

Bank Run Bill Gross Bond China Gundlach High Yield Janus Capital Morgan Stanley Ray Dalio Reality

Investment managers are warning that markets probably have further to fall as China’s growth slows, oil prices plunge and central bankers lack tools to prop up economies. As Bloomberg reports, from the largest asset manager in the world to the most niche investment expert, many of the best known 'gurus' are warning there is more to come just as Morgan Stanley's James Gorman warned this morning "the size of the correction suggests it's not temporary," adding that "it might be too soon to step back into the market."

"I expect a protracted decline in the S&P 500," Jeffrey Gundlach, co-founder of DoubleLine Capital, said in an e-mailed response to questions. "Investors should sell the bounce-back rally which could come at any time."
“Excessive risk exposure is adding to the selling pressure,” Gundlach said.

"You need to have some stabilization of fundamentals to give people conviction this has gone too far," Koesterich, whose firm is the world’s largest money manager, said in an interview. "Certainly you are getting closer to capitulation. The magnitude of the drop suggests that."
Hedge fund manager Ray Dalio said global markets face risks to the downside as economies near the end of a long-term debt cycle.

“When you hit zero, you can’t lower interest rates anymore,” Dalio said, according to a transcript of the interview. “That end of the long-term debt cycle is the issue that means that the risks are asymmetric on the downside because risks are comparatively high at the same time there’s not an ability to ease.”
The rout in global stocks is being fueled by investors seeking to reduce leverage as central bank run out of options to prop up economies, according to Janus Capital Group Inc.’s Bill Gross.
“Real economies are being levered with QEs and negative interest rates to little effect,” Gross, who manages the $1.3 billion Janus Global Unconstrained Bond Fund, said in an e-mail responding to questions from Bloomberg. “Markets sense this lack of growth potential and observe recessions beginning in major emerging-market economies.”
Credit folks are fretting too...

"The negative sentiment in the market has turned into a full-blown high yield selloff and more credits are going to run into trouble." said Kapil Singh, a money manager at DoubleLine. "High yield buyers are becoming choosier and choosier."
"A lot of funds limped into the new year hoping for a market rally but that just hasn’t happened," Mark Heron, head of distressed debt at hedge fund Ellington Management, said.
"You get the sense that there is a broader market issue," Heron said.
Complacency about the risks of contagion from the weakest segments of high yield is reminiscent of sentiment regarding subprime debt in mid-2007, Heron’s firm wrote in a November report.
And that means all those wonder M&A deals (and the premia they pumped into stocks) won't be there...

"I suspect there are a lot of deals that were teed up, ready to come to the market, that will just have to stay on the shelf for the foreseeable future," said money manager Margie Patel, at Wells Capital Management in Boston, which manages about $350 billion. "The pipeline is going to dramatically shrink."
And nor will the other pillar of support for stocks -  buybacks..

Simply put, the riskiest parts of corporate debt markets are inching closer to panic mode... and stocks are slowly waking to that reality (as the 'knowledge' leaks from professionals to the rest of the market).

But some remain hopeful - "This is a financial crisis and not an economic crisis," Aguilar said during a conference call. "The U.S. economy is stable."

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Re: S&P 500 Index Movements
« Reply #93 on: January 22, 2016, 06:06:19 PM »

道指收漲115點 雙「鱷王」齊高唱災難未完
01月22日(五) 05:00


【on.cc東網專訊】 美股昨日大驚嚇後,今日在歐央行暗示可能在3月加額放水,加上油價大反彈之下,3大指數做好。不過,「鱷王」索羅斯公開表示已沽空美股,更揚言中國會「硬着陸」,拖累大市尾段升幅收窄。
油價大反彈,油股埃克森美孚收市升1.26%;雪佛龍收市亦升2.62%;國際商業機器(IBM)昨日大跌近半成後,今日僅微彈0.86%。金融股高盛則逆市跌1.37%。技術上,標指暫時守穩1,862點「伊波拉低位(Ebola Low)」,反映後市暫未太悲。

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Re: S&P 500 Index Movements
« Reply #94 on: January 23, 2016, 05:42:05 AM »



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Re: S&P 500 Index Movements
« Reply #95 on: January 23, 2016, 08:36:01 AM »

Opinion: Investors are still too bullish despite the stock market correction

By Mark Hulbert
Published: Jan 22, 2016 5:24 a.m. ET

The proof: They cheered Wednesday’s late-day rally even though equities tanked

CHAPEL HILL, N.C. (MarketWatch) — The stock market’s plunge won’t come to an end until pessimism and despair become a lot more widespread.

And that could be a while, since the stock market timer community has been exhibiting a stubborn refusal to throw in the towel.

We saw this behavior in spades Wednesday, when the Dow Jones Industrial Average by the middle of the trading session had fallen by more than 500 points — only to recover and close down “only” 250 points. Rather than bemoan the loss for the session, many were quick to celebrate that late-day recovery, and some even declared that Wednesday was a so-called short-term reversal day, which would be positive from a technical perspective.

Read: Apple earnings optimism may be ‘detached from reality’

Such eagerness to believe any rally attempt as the real thing is characteristic of bear markets, according to contrarian analysis. As contrarians are fond of saying, bear markets like to descend a slope of hope, just as bull markets like to climb a wall of worry. From this contrarian perspective, therefore, a more sustainable bottom will come when there is no such eagerness.

UBS’s Axel Weber expects four U.S. rate increases in 2016(1:06)
Consider the average recommended equity exposure among a subset of short-term Nasdaq-oriented stock market timers monitored by the Hulbert Financial Digest (as measured by the Hulbert Nasdaq Newsletter Sentiment Index, or HNNSI). Since the Nasdaq responds especially quickly to changes in investor mood, and because those timers are themselves quick to shift their recommended exposure levels, the HNNSI is the Hulbert Financial Digest’s most sensitive barometer of investor sentiment.

The HNNSI through Wednesday of this week never fell below minus 37.5%. While this is low in absolute terms, it is not in relative terms: As you can see from the chart at the top of this column, this was well above the minus 50% level to which it fell during the market’s correction last summer.

To be sure, on Thursday, the HNNSI did drop down to minus 50%. But, given the market timers’ prior eagerness to jump on the bullish bandwagon, contrarians won’t entertain the notion of a tradeable bottom until the HNNSI stays at least that low for several days in a row.

An especially bullish development, from a contrarian perspective, would be for the market timing community to remain as bearish as it is now in the face of the market’s initial rally attempt. That would suggest that, finally, the market’s plunge over the past several weeks has led to a robust wall of worry that the market can climb.

Also read: What’s wrong about Cramer’s latest advice

By the way, the HNNSI is not the only sentiment measure that leads to a contrarian-based caution about the market’s rally attempts. During the market’s recent plunge, for example, the CBOE’s Volatility Index VIX, -16.30% never closed higher than $27.59, in contrast to spiking to over $40 in August

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Re: S&P 500 Index Movements
« Reply #96 on: January 23, 2016, 08:40:08 AM »

U.S. stocks post first weekly gain of 2016

By Joseph Adinolfi and Barbara Kollmeyer
Published: Jan 22, 2016 4:24 p.m. ET

Nasdaq soars, bolstered by rebound in tech shares
Oil drove gains in global stocks.
U.S. stocks posted their first weekly gain of the new year Friday as oil futures rebounded for a second day and hints of potential central-bank stimulus in Europe and Japan helped comfort nervous investors.

The tech-heavy Nasdaq Composite outperformed the other main U.S. indexes, recording a weekly gain of 2.3%, as some of its largest constituents, including Apple AAPL, +0.37% Facebook F, +1.08% and Alphabet Inc. GOOG, +2.64% rose sharply in a relief rally.

The Nasdaq NDAQ, +3.50% closed 119.12 points, or 2.7%, higher at 4,574.93.

The Dow Jones Industrial Average DJIA, +1.33% finished 210.83 points, or 1.3%, higher at 16,093.51, posting a 0.7% weekly gain. Meanwhile, the S&P 500 SPX, +2.03% jumped 37.91 points, or 2%, to finish at 1,906.90—up 1.4% on the week. Industrial shares and financial shares were the only two of the S&P’s 10 sectors to not finish in the green.

For all three indexes, it was the first weekly gain in four weeks.

Gains were largely driven by rising oil prices, as both West Texas Intermediate crude, the U.S. crude-oil benchmark CLH6, +9.21% and Brent crude LCOH6, +9.68% the international benchmark, soared to their highest levels in nearly two weeks after a report North American oil-drilling rigs showed that the number of active rigs decreased slightly. Oil futures earlier this week dropped below $27 a barrel for the first time since 2003.

Hints about a further loosening of monetary policy from European Central Bank President Mario Draghi and Japanese Prime Minister Shinzo Abe this week also encouraged market bulls.

“There’s a general whisper out there that there’s going to be coordinated central-bank action,” said Oliver Pursche, CEO of Bruderman Brothers. “That’s led to a certain amount of short-covering.”

“Oil prices being up 6%—that’s a big driver. The correlation [between stocks and oil] has certainly been high lately,” Pursche added.

Global stocks also benefited from the easing rumors and the recovery in oil. European stocks SXXP, +3.00%  booked their best daily gain in a month, while Asian markets finished with solid gains, including a nearly 6% rise for the Nikkei 225 index NIK, +5.88%

Stocks’ turnaround over the past two days comes after a rough start to the week that saw the S&P 500 slip to a nearly two-year intraday low on Wednesday.

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Re: S&P 500 Index Movements
« Reply #97 on: January 23, 2016, 08:43:09 AM »

Weekend Reading: The Bear Awakens
Tyler Durden's pictureSubmitted by Tyler Durden on 01/22/2016 16:25 -0500

Art Cashin Bear Market China David Bianco Deutsche Bank James Montier John Hussman John Williams Morningstar Ray Dalio Recession Richard Bernstein San Francisco Fed Tyler Durden Volatility

Submitted by Lance Roberts via,

Of the last several weeks, I have suggested that markets are oversold and that a bounce was likely. However, such a reflexive bounce should be used to sell into as it is now becoming clearer the markets have changed their trend from positive to negative. As I discussed earlier this week:

“The concept of the full-market cycle is critically important to understand considering the markets have very likely broken the bullish trend that began in 2009. Take a look at the first chart below.”

“This “weekly” chart of the S&P 500 shows the bullish trends which were clearly defined during their advances in the late 1990’s, 2003-2007 and 2009-present. Each of these bullish advances, despite ongoing bullish calls to the contrary, ended rather badly with extremely similar circumstances: technical breakdowns, weakening economics, and deteriorating earnings.
As I have shown in the chart above, when the markets broke the bullish trends (blue dashed lines), the subsequent bear market occurred rather rapidly. The conversion from the bull market to the bear market was marked by a breakdown in prices and the issuance of a very long-term “sell signal” as noted in the bottom of the chart.
We can look at this same analysis a little differently and see much of the same evidence.”

“The chart above shows something I discussed last week: ‘Markets crash when they’re oversold.’”
The inability for the markets to muster a rally from currently extremely oversold short-term conditions suggests market dynamics have indeed changed from a “buy the dip” to “sell the rally” mentality.

This weekend’s reading list is a collection of articles on the current state of the market. Is this just a correction within a bullish tend? Or, is this the beginning of the long awaited bear?

1) 7 Reasons Not To Be A Bear by Jeff Reeves via MarketWatch

Insulation From China
US Dollar
The Long Term
But Also Read:  Growth Fears Grip The Market by Robert Johnson via Morningstar

2) Charts To Retain Ones Sanity by Scott Grannis via Calafia Beach *

“Financial markets are once again swooning as oil prices collapse, stoking fears of another global financial crisis. Without trying to minimize the angst we all feel, I offer here some charts which are useful for retaining one’s sanity, along with some commentary.”

But Also Read: US Economy Slip-Sliding Away by Pater Tenebrarum via Acting Man Blog

Also Read: The Case For Chaos & Equity Bottoms by Anna-Louise Jackson via Bloomberg

3) The Deeper Causes Of The Market Rout by Mohamed El-Erian via Bloomberg

“To shed light on one of the worst starts to a new year for global stock markets, some analysts are turning to macroeconomic explanations, such as China’s economic slowdown and its uncharacteristic policy slips. Others prefer to focus on the cascading influence of unhinged markets, such as oil. Yet neither explanation is sufficiently comprehensive; and each fails to account for major changes in liquidity and volatility.”
But Also Read: Art Cashin – “This Is What You Get Before A Crisis” by Christoph Gisiger via Zero Hedge

And: 7 Numbers To Put The Market Madness Into Perspective by Paul Lim via Time

4) Who Let The Bulls Out? by Paul La Monica via CNN Money

“Deutsche Bank chief equity strategist David Bianco defended stocks in a report Tuesday called ‘Gotta swing when you see it.’ He must be eager for spring training to start.
Bianco wrote, ‘We are not panicked by this correction because we understand it. It’s driven by a profit recession centered at certain industries caused by factors that we’ve long flagged as risks.’
In other words, nobody should be surprised that the dramatic plunge in oil prices is bad news for the bottom lines of energy and industrial companies.
Bianco added that ‘this correction has overly punished other sectors and now we’re ready to take advantage of it.’  And he said the next 5% move in the S&P 500 is likely ‘to be up and soon.'”
Also Read: Stocks Could Fall 5000 Points by Brett Arends via MarketWatch

Further Read: Ray Dalio On Asymmetric Risk by Tyler Durden via Zero Hedge


Watch: Stocks Have Much Further To Fall


5) Will The Fed Rescue The Market by Anthony Mirhaydari via Fiscal Times

“It’s far from assured the Fed will ride to the rescue of investors this time.
On Friday, San Francisco Fed President John Williams said he doesn’t see signs that asset values are depressed or below normal and cited the strong dollar as more of a concern than low commodity prices. He defended the December rate hike decision — and he added that the Fed has met its full employment mandate, believes the labor market will continue to strengthen this year and that inflation should return to policymakers’ 2 percent target over the next couple of years.
We’ll know more when the Fed holds its next policy meeting on January 26 and 27. We’ll find out this week if the bloodbath continues.”

But Also Read: The Bright Side To Stock Rout by John Kimelman via Barron’s

And: Time To Be A Contrarian? by John Plender via


8 Investing Myths by Bob Seawright via Above The Market
The 50/30/20 Rule Of Markets by Ivaylo Inanov via Ivanhoff Capital
Don’t Believe Strong Jobs Numbers by Editorial Staff via
Things I’m Pretty Sure About by Morgan Housel via Motley Fool
Asset Allocation 2.0 by Richard Bernstein via Advisor Perspectives
A Perfect Storm by David Stockman via Contra Corner
Why Is Oil Plummeting by Karl Russell via NYT
The Dead Hand Of Debt by Buttonwood via The Economist
Why Politicians Are Ignorant About Economics by John Stossel via Fox News
An Imminent Likelihood Of Recession by John Hussman via Hussman Funds
Is It Time To Buy Stocks? No. by Jesse Felder via The Felder Report
Stock Correction Sets Lowly Record by Dana Lyons via Tumblr
Market Macro Myths -Debt, Deficits & Delusions by James Montier via GMO
“Better to preserve capital on the downside rather than outperform on the upside” – William J. Lippman

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Re: S&P 500 Index Movements
« Reply #98 on: January 23, 2016, 08:46:28 AM »

道指收漲210點單周轉向 技術大師話未驚完
01月23日(六) 05:00   


【on.cc東網專訊】美股2016年開局慘跌後,在憧憬日本及歐洲加大量化寬鬆(QE),以及油價大反彈下,本周出現「單周轉向」訊號。不過,市場僅視上升為「死貓彈」,其中有「技術分析教父」之稱的阿坎波拉(Ralph Acampora)表示,現時市場的自滿情緒令他想起2000年,較2008年金融海嘯更可怕。




專家大行對後市仍偏向悲觀。有「技術分析教父」之稱的阿坎波拉(Ralph Acampora)表示,現時市場的自滿情緒令他想起2000年,較2008年金融海嘯更可怕。他指出,投資者已忽略了一個最古老的技術指標,這就是「道氏理論」。「道氏理論」是根據運輸指數與工業指數的互動所得出,通常運輸指數會較工業指數具前瞻性。結果是:運輸指數去年累瀉25%,早已預示大家所熟悉的道指將會跟隨大跌!



不過,上周揚言美股恐要再跌10%的貝萊德主席及行政總裁芬克(Larry Fink)則表示,現時他對美股的看法較之前「牛」,但相信油價仍未見底。他稱,環球股市今年以來不斷遭拋售,但在本周三開始已見到買家入場,料美股年底時將高於現水平,呼籲投資者可繼續持股。

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Re: S&P 500 Index Movements
« Reply #99 on: January 23, 2016, 04:42:46 PM »

以史為鑑:美股1月開局差透 最悲時刻已過
01月23日(六) 04:52   


據外國傳媒報道,BMO Capital首席投資策略師Brian Belski表示,標指本月表現為2009年1月以來最差,並且是二次大戰後第11個最差月份,但歷史顯示,這或反映是長期牛市的開端,呼籲投資者不要沽貨。