It was a historic week on Wall Street. 2016 started with a nasty blow to markets. Investors liquidated as they ran for cover and headlines are painting a bleak picture.

Earnings season, China, crude and the major news that will move markets are all discussed. We also confirm our car sales theory with data that backs it up.

The Iranian affair and the State of The Union Address are up for commentary as well.

What is that coffee company that John can’t recall?

Show Notes and Links

President Obama’s final State of the Union… and?

THE WORST FIRST WEEK OF YEAR EVER – that is the headline that is being pushed around. Also seeing many compare the future to 2008…. Yes, it was bad…. How bad?

Some Stats:

XHB

SPDR S&P Homebuilders

-9.13%

XLB

S&P Sel Materials Spdr Fd

-7.74%

XTL

SPDR S&P Telecom ETF

-6.92%

XLF

S&P Sel Finl Spdr Fd

-7.26%

XLE

S&P Sel Energy Spdr Fd

-7.08%

XLK

S&P Sel Tech Spdr Fd

-6.40%

XLI

S&P Sel Industrial Spdr Fd

-6.21%

XLY

S&P Sel Consum Discretion’y Sp

-5.82%

SPY

SPDR S&P 500 ETF

-5.86%

XLV

S&P Sel Health Care Spdr Fd

-5.57%

XLP

S&P Sel Consum Staples Spdr Fu

-2.91%

XLU

S&P Sel Utilities Spdr Fd

-0.39%

Other markets around the world fared even worse last week:

China -13%, Africa -11%, Australia, -11%, Mexico -9%, Brazil -8%, Canada -6.75%….

Sectors that are getting beat up so far in 2016:

Homebuilders -9%, Materials -7.75%, Telcom -7%, Financials -7%, Energy -7%…

Utilities and Consumer Staples held up the best with only fractional losses.

Technical Conditions at end of last week:

* At the close of the week, only 101 stocks in the S&P 500 were above their 200 day moving average

* At the close of the week, only 61 stocks in the S&P 500 were above their 50 day moving average

* S&P 500 is under the 10-month and 12-month moving average

* Our Key Reversal Indicator (KRI) is flashing “oversold levels” consistent with near-term market turning points

* The Spearman Indicator is close to a low point that shows bottoming

Key Reversal Indicator

From Tom McClellan this week: “In a Dec. 11, 2015 Chart In Focus article, I posed the rhetorical question about whether the market was reliving its past from 2012, or from 2008.  The financial panic in China seems to have settled the question for us, and the market has decided on the 2008 scenario.”

Market Doomsday Chart

China is trying to get a grip on markets. After falling 7% and triggering circuit breakers on the first trading day of the year, the govy spent $20 billion to try to keep a bid under markets. In addition, the expiration of the share sale regulations is going to be moved further out. (not to mention that the govy may look to make selling a criminal action (of course the next 7% drop and mar...