11 October 2016 – Oil pulls back, Earnings season begins

Alcoa misses top and bottom results and plunged more than 10%. Oil pulls back slightly and the indices plunged at the beginning of the earnings season. Stocks were under selling pressure throughout the day.

The dollar index continues its uptrend after breaking out from its volatility Squeeze. Gold and Silver traded sideways within small ranges. Commodities pulled back slightly for the day and bond was flat for the day.

S&P 500 companies are expected to post their sixth straight quarter of declining earnings. The earnings recession is a leading indicator of things to the market conditions.

Dow Transportation attempted to rally and was met with a deluge of selling. It traded downward throughout the day and closed with bearish marubozu candle on its 8 EMA. Momentum remains upward. Volumetric buying pressure is at 81.1%. The index is in a monthly Squeeze.

Dow Industrial sold off on market open and came under sustained selling pressure throughout the day. It closed with a bearish marubozu candle below its moving averages. Short term volumetric buying pressure is at 81.5%. The index is in a daily and monthly Squeeze.

Russell 2000 sold off on market open and continued selling off throughout the day. It closed with a big bearish marubozu candle below its 8 EMA, 21 EMA and 50 SMA. Momentum remains upward. Volumetric buying pressure is at 42.6%.

Nasdaq 100 sold off on market open and found support at its 50 SMA. It closed with a big bearish marubozu candle below its 8 EMA and 21 EMA. Momentum remains upward. Volumetric buying pressure is at 87%. The index is in a monthly Squeeze.

S&P 500 came under sustained selling pressure on market open and throughout the day. It closed with a big bearish marubozu candle below it moving averages. Momentum is downward. Volumetric buying pressure is at 74.7%. The index is in a daily and monthly Squeeze.

Metals and Commodities
WTI Crude oil futures pulled back and is trading $50.79. It uptrend continues.

Gold futures is trading at $1255.2 per ounce and is trading sideways just below its 200 SMA. Momentum is downward.

Silver futures is trading at $17.520 per ounce in sideways trading.

Agriculture (DBA) ETF closed at 20.02 and continued its downtrend.

Commodities (DBC) ETF pulled back and closed at 15.26 above its moving averages and continued its uptrend.

Bonds
Bond futures (ZB) traded sideways at 164’06. Its downtrend continues.

High Yield bond ETF (HYG) closed at 86.91 with a bearish marubozu candle below its 8 EMA but above its 21 EMA. Momentum remains upward.

Bonds ETF (TLT) traded sideways and closed at 132.83 with a small doji candle below its moving averages. It has found support on its 200 SMA.

Currencies
The dollar index continues its uptrend and painted a big bullish marubozu candle and is trading at 97.635.

EUR/USD is trading at 1.10412 and is in a sharp downtrend. It is now below all its moving averages.

USD/JPY traded sideways above its 8 EMA, 21 EMA and 50 SMA at 103.661. Momentum remains upward.

Relative Strength – Sectors
On a monthly lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLE, XLF, XLK, XLY and XLI respectively.

On a 3-month lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLE, XLK, XLF, XLY and XLI.

Market Internals
Vix closed at 15.36. Vix futures is at 15.65 and has formed a Squeeze. Skew is at 119.79. Market sentiment has turned bearish. Market breadth is sloping downward. Volumetric accumulation/distribution is sloping downward.

The Week Ahead
The market continues its choppiness as it alternates between bullish and bearish days. S&P 500 is expected to continue its earnings recession. The indices came under sustained selling pressure and closed with above averages bearish candles. Vix futures is not pricing in further downside. Market internals continue to deteriorate. The prognosis is for the choppy market to continue.

Stock of the Day
The Stock of the Day is XOM. Exxon Mobil is engaged in the exploration and production of crude oil and natural gas, manufacturing of petroleum products and transportation and sale of crude oil, natural gas and petroleum products.

To YOUR wealth!