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BETWEEN THE HEDGES



Portfolio Manager's Commentary on Investing and Trading in the U.S. Financial Markets



Updated: 2018-02-20T17:24:02.971-05:00

 



Stocks Lower into Final Hour on Russia Probe Worries, Earnings Jitters, US/European/Emerging Markets Debt Angst, Road & Rail/Metals & Mining Sector Weakness

2018-02-20T15:34:53.082-05:00

Broad Equity Market Tone:Advance/Decline Line: LowerSector Performance: Most Sectors DecliningVolume: Around Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 20.27 +4.16% Euro/Yen Carry Return Index 137.81 +.05% Emerging Markets Currency Volatility(VXY) 8.55 -.23% S&P 500 Implied Correlation 42.15 -.64% ISE Sentiment Index 106.0 +15.22%Total Put/Call .82 -10.87% NYSE Arms 1.13 -.97% Credit Investor Angst:North American Investment Grade CDS Index 53.76 +4.43% America Energy Sector High-Yield CDS Index 381.0 +.15%European Financial Sector CDS Index 54.52 +5.19%Italian/German 10Y Yld Spread 133.50 +5.5 basis pointsAsia Pacific Sovereign Debt CDS Index 12.59 +1.61%Emerging Market CDS Index 124.64 +3.86%iBoxx Offshore RMB China Corporate High Yield Index 147.23 -.39%2-Year Swap Spread 26.75 -.25 basis point TED Spread 27.75 unch.3-Month EUR/USD Cross-Currency Basis Swap -33.0 -.5 basis point Economic Gauges:Bloomberg Emerging Markets Currency Index 75.56 -.56% 3-Month T-Bill Yield 1.60% unch.Yield Curve 66.25 -2.25 basis pointsChina Iron Ore Spot 76.35 USD/Metric Tonne n/aCiti US Economic Surprise Index 48.80 -1.4 pointsCiti Eurozone Economic Surprise Index 23.60 -12.1 pointsCiti Emerging Markets Economic Surprise Index 4.20 +1.7 points 10-Year TIPS Spread 2.11 +1.0 basis point100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating -59 open in Japan China A50 Futures: Indicating +177 open in ChinaDAX Futures: Indicating -49 open in GermanyPortfolio: Slightly Lower: On losses in my retail/medical/biotech sector longsDisclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short Market Exposure: Moved to 50% Net Long[...]



Today's Headlines

2018-02-20T15:04:24.127-05:00

Bloomberg:Draghi Stays Silent as ECB Seeks Clarity on Latvia. (video) More than 48 hours since Latvian Governor Ilmars Rimsevics was detained by anti-graft authorities and pressed by the government to step down, the ECB is still unclear on the details of the case, the people said. The Governing Council expects to be briefed by the Executive Board at a scheduled meeting on Wednesday, they said, asking not to be identified as internal discussions are confidential. The ECB has been in contact with Rimsevics, one person said.How Japan's Central Bank Policy Is Driving Speculation About Stimulus.World's Biggest Container Liner Looks for Deals Outside Shipping. The world’s largest container company will start looking for takeover targets outside the shipping industry as it tries to pre-empt a new competitive landscape in which customers are morphing into rivals. Jakob Stausholm, A. P. Moller-Maersk A/S’s chief financial officer and head of transformation and strategy, says the company needs to expand its land-based activities to meet a growing need from clients. “We’re currently very big in the ocean segment, and we’d rather grow in non-ocean, so it may be a good idea to look for M&A targets there,” Stausholm said in an interview Tuesday.Buy the Dip Isn't Dead. In Fact, It's Just Getting Stronger. (video)Fear's Gone But Greed Hasn't Materialized in U.S. Stock Options. Warren Buffett once quipped that aspiring investors “should try to be fearful when others are greedy and greedy only when others are fearful.” Tell that to the options market. While the volatility-induced jolt of fear that rattled markets in early February has subsided, options buyers are sitting tight and betting on the status quo, even on the heels of the best week for U.S. equities since 2013. Put options that would pay off in mid-March if the SPDR S&P 500 ETF Trust (ticker SPY) re-eclipses its lowest closing level of 2018 have tumbled by more than 80 percent from their recent peak. Money Managers Think the Worst Is Yet to Come for S&P 500. About 57 percent of investors surveyed by Strategas Research Partners expect the S&P 500 Index to break the intraday low of 2,533 reached on Feb. 9, while the rest say the market has bottomed for the year after a two-week selloff sent the index to its first 10 percent correction since 2016. The poll, conducted Feb. 16, covered roughly 500 institutional investors.Wall Street Journal: Qualcomm(QCOM) Raises Bid for NXP(NXPI) to $44 Billion. Move could also help chip giant as it seeks to fend off takeover interest from Broadcom.Is a 3% Treasury Yield Good News or Bad? For Now, Investors Say Good. This year’s rise in yields points to a long-awaited return to economic normalcy, overcoming fears about the staying power of the postcrisis recovery.Syrian Forces Backed by Russia Bombard Hard-Hit Suburb of Capital. Airstrikes target hospitals, rescue centers in Eastern Ghouta, as rebel-held area appears ready to fall to Assad regime.Albertsons Scoops Up Remainder of Rite Aid as Retailers Face Online Threat. Transaction would create company with revenue of $83 billion and allow Albertsons to go public. Jihadists See a Funding Boon in Bitcoin. Cryptocurrencies come under increased U.S. scrutiny as militants seek anonymous donations. MarketWatch.com:  Home Depot(HD) sales lifted by tax cuts and booming housing market.BlackRock says it’s time to give U.S. stocks more love — try these sectors.Charting the market recovery attempt, S&P 500 holds firmer technical ground. (graph)Fox News: Dems fume as Trump pushes low-cost, ObamaCare alternative health plans. (video)CNBC: Investors might be freaking out about higher interest rates, but Credit Suisse says the stock market is not.Walmart(WMT) has big year of e-commerce investments planned to bring growth back to 40 percent. (video)The hottest toys from the New York Toy Fair.The Trump presidency has seen foreigners flock in as buyers of US government debt.Billionaire Richard Branso[...]



Bear Radar

2018-02-20T14:09:35.250-05:00

Style Underperformer: Small-Cap Value -.6%Sector Underperformers: 1) Gold & Silver -1.9% 2) Road & Rail -1.8% 3) Foods -1.2%Stocks Falling on Unusual Volume: UBNT, ADMS, WMT, CBRL, BBL, CTB, GCI and ATIStocks With Unusual Put Option Activity: 1) RAD 2) AXL 3) AAP 4) MDXG 5) DPZ Stocks With Most Negative News Mentions: 1) MDXG 2) UBNT 3) SNAP 4) GPS 5) GES Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2018-02-20T13:46:47.585-05:00

Style Outperformer: Large-Cap Growth +.3% Sector Outperformers: 1) Semis +2.2% 2) Disk Drives +1.5% 3) Papers +1.5% Stocks Rising on Unusual Volume:FOGO, NXPI, DIN, PAR, DPZ, MULE, TGH, EROS, DRNA, VYGR, RAIL, FBR, WBAI, RYAM, TVPT, NBL, X, OMAB, CAI, RNG, BL, ANET, URGN, SEDG, FICO, NBL, PGTI, EROS, UIS and COUPStocks With Unusual Call Option Activity: 1) UPL 2) RAD 3) DPZ 4) SMH 5) HD Stocks With Most Positive News Mentions: 1) RYAM 2) ADI 3) RIG 4) AGS 5) DPZ Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2018-02-20T10:40:28.683-05:00

NYSE Composite Index:
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Tuesday Watch

2018-02-19T22:01:54.620-05:00

Today's Headlines Bloomberg: Russia Warns U.S. Not to ‘Play With Fire’ in Syrian Conflict. Russian Foreign Minister Sergei Lavrov warned the Trump administration not to “play with fire” as he lashed out at the U.S. over what he described as its “provocative” support for autonomy-seeking Kurds in Syria. “The U.S. should stop playing very dangerous games which could lead to the dismemberment of the Syrian state,” Lavrov said at a Middle East conference in Moscow on Monday, alongside his Iranian counterpart Mohammad Javad Zarif and a top adviser of Syrian President Bashar al-Assad. “We are seeing attempts to exploit the Kurds’ aspirations.”U.K. Has a Secret Plan to Hold Brexit Cash If EU Refuses to Trade. Prime Minister Theresa May’s team is eyeing up a contingency plan to hold back billions of pounds in Brexit payments, if the European Union refuses to give the U.K. the trade deal it wants. Senior British officials have privately discussed the idea as a fall-back option that could be triggered if negotiations go wrong, three people familiar with the matter said.Asia Stocks Track U.S. Futures Down; Dollar Steady. (video) Asian stocks took their cue from a decline in U.S. futures to open lower and the yen consolidated after its biggest drop in two weeks. The dollar steadied and oil climbed in holiday-thin trading. Japan’s Topix index dropped after staging it’s second-best performance this year, while shares in Australia and South Korea also fell after the Stoxx Europe 600 Index declined for the first time in four days. The yen steadied after retreating from a 15-month high. Treasuries declined. European markets were the center of investor attention on Monday as U.S. stocks and Treasuries took a break for Presidents’ Day holiday. Traders return to their desks in Hong Kong on Tuesday, while Chinese markets reopen on Thursday. The Topix fell 0.7 percent as of 9:25 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average declined 0.8 percent. Australia’s S&P/ASX 200 Index fell 0.3 percent. South Korea’s Kospi index was down 0.4 percent. Futures on the S&P 500 lost 0.1 percent. The MSCI Asia Pacific Index fell 0.4 percent.Five Things You Need to Know to Start Your Day. (video)Oil Rises Above $62 as Risk Assets Recover From Global Rout. U.S. Oil Exports Go Up a Gear as Supertanker Sets Sail for China. (video) The flood of U.S. oil exports stepped up a gear on Monday after the first fully laden supertanker sailed from an American port, alleviating a bottleneck that’s limited overseas shipments.Hedge Funds Turn Short on Tech Just as Stock Rally Intensifies. A key group of investors has just missed out on the biggest tech-stock rally since 2014. Hedge funds and other large speculators turned net short on Nasdaq 100 Index futures for the first time in 21 months, according to weekly data compiled by the Commodity Futures Trading Commission through Feb. 13. In fact, they became the most bearish since 2011. Meanwhile, the tech-heavy index gained 5.6 percent in the five days through Friday, the most since October 2014.Coinbase Runs From One Fire to the Next. Coinbase Inc. is one of the most popular online exchanges for digital currencies. But last year, it started seeing complaints soar on the U.S. Consumer Financial Protection Bureau’s website. Unfortunately for the San Francisco business and its customers, things have only gotten worse.Wall Street Journal: The Parkland Massacre and the Air We Breathe. What’s gone wrong with our culture that produces such atrocities? It’s a very long list.Oil Producers Buying Back Shares After Years of Selling New Stock. Energy companies turn focus to shareholder returns amid higher oil prices and asset sales.World’s Biggest Miners Emerge From Their Hole in a $200 Billion Comeback. Rio Tinto, BHP and Glencore dig up boom-era profits again, rewarding investors and looking for deals.[...]



Weekly Outlook

2018-02-19T21:59:29.203-05:00

BOTTOM LINE: I expect US stocks to finish the week mixed as positive earnings outlooks, oil gains and economic optimism offset higher long-term rates, profit-taking and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.
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Today's Headlines

2018-02-18T16:12:53.512-05:00

Bloomberg:Bezeq Probe Is Said to Widen, Ensnaring Netanyahu Associates. The Israel Securities Authority and police are questioning five suspects over involvement in a plan whereby the Communications Ministry allegedly crafted rules to benefit Bezeq Israeli Telecommunication Corp. in exchange for positive coverage of Netanyahu and his wife on Bezeq’s Walla! news outlet, said the person, who requested anonymity as the matter is sensitive. Two of the detainees worked closely with Netanyahu in the past, the person said.Wall Street Journal:  Like Peter Thiel, Entrepreneurs Feel Alienated by Silicon Valley ‘Echo Chamber’. Venture capitalists say they are defecting away from the high-tech cradle in part because of resistance to different values, ideologies.Silicon Valley Explores A New Investment: Your Home. Startups backed by deep-pocketed investors are looking at a new way to profit from rising home prices.Household Debt Sees Quiet Boom Across the Globe. A decade after the crisis, a number of economies face a familiar problem—but regulators are better prepared.Fed Chairman Powell Taps Two Advisers. Monetary policy specialists Jon Faust and Antulio Bomfim will serve as senior advisers.After Florida School Shooting, Some GOP Lawmakers Renew Gun-Control Talk. Students who survived the shooting at Marjory Stoneman Douglas High School have blasted lawmakers for taking contributions from the NRA and called on them to enact new gun-control laws. Fox News: Trump slams FBI over 'missed signals' on Florida shooting, asserts Russia was distraction.Nikolas Cruz showed no warning signs before Florida school shooting, say couple who took him in. (video) CNBC: Crude's pullback appears done for now, with gasoline set to spur prices higher: Tom Kloza. (video)Prepare for a good year on Wall Street, but not a repeat of 2017, says JP Morgan Private Bank. (video)Zero Hedge: Trump Lashes Out At FBI And HR McMaster In Saturday Night Tweets.'Ring Of Fire' Quake-Cluster Prompts Scientists To Warn Of "Large Rupture Sooner Than Later"."He Has Her Blood On His Hands" - Father Of Florida Shooting Victim Viciously Attacked Online For Supporting Trump.CIA Argues The Public Can't See Classified Information It Has Already Leaked To Favored Reporters. "There Is An Acute Crisis Coming": Apartment Developer.NYSE's Most Iconic Stockbroker Admits He's "Never Owned A Share Of Stock In My Life".Hezbollah Leader Threatens "We Will Open Fire" On Disputed Israeli Offshore Oil & Gas Operations. Business Insider:  Silicon Valley parents are raising their kids tech-free — and it should be a red flag.[...]



Today's Headlines

2018-02-17T16:56:36.730-05:00

Bloomberg: Trump Must Weigh Retaliation Risk in Deciding Tariffs on Steel. (video)Winn-Dixie and Tops Owners Are Said to Prepare for Bankruptcy. Two U.S. supermarket chains are readying bankruptcy filings, according to people with knowledge of the matter, a sign of the mounting pressures in the grocery industry.Wall Street Journal: The Russian Indictments. Where were James Clapper and John Brennan when the Kremlin was meddling?Russian Influence Operation Allegedly Ran Like a Propaganda Startup. A federal indictment describes the Internet Research Agency as having a deep understanding how to use Silicon Valley technology to sow discord.Budget Deal Likely to Deliver Hefty Business to Defense Companies. Increase in planned spending looks to benefit Lockheed Martin, Northrop Grumman, Raytheon and even Boeing.The Robots Are Coming for Garment Workers. That’s Good for the U.S., Bad for Poor Countries.Wall Street’s Five CEOs Get Biggest Payday Since 2006. Combined compensation for chiefs of the biggest banks hit $126 million, the highest annual tally since before financial crisis.Barron's: Had bullish commentary on (CMI), (GOOGL), (BXP), (SLG), (SPG), (TCO), (DEI), (LRCX) and (C).MarketWatch.com: Walmart(WMT) preview: It has a competitive moat in food that even Amazon may have trouble crossing.Fox News:  McMaster: FBI indictments prove Russia meddled in US elections. (videoCNBC: Stock rebound could continue as long as the Fed doesn't spook markets.Trump backs Facebook's VP of ads, who says Russia's meddling was designed to divide America. Cisco(CSCO), Intuit(INTU) and 31 other stocks are leading the market out of correction.The bull case for Dow stock Home Depot ahead of earnings next week. (video)Walmart(WMT) rolls out new apparel brands for women, kids and plus sizes.Volatility is back, and that could lead to a late ‘90s-style market rally, Barclays says. (video)Wall Street veteran who predicted sell-off says bull market has 'years left'. (video)Amazon(AMZN) threat to FedEx(FDX) overblown, it's the postal service that's in trouble, JP Morgan says. (video)These are the most popular cruises for partying, relaxing and dining, according to Instagram.This bricklaying robot works five times faster than a human. (video)This self-driving ship could be the future of military warfare. (video)Zero Hedge: This Year's Stock Buybacks Are Already Bigger Than All Of 2009's.DOJ Complaint: The Russians Organized A Rally Called "Trump Is NOT My President".Trump Responds: Mueller Indictment Shows "Campaign Did Nothing Wrong. No Collusion!"George Soros To EU: Fight Populism, Regulate Social Media. Tech Start-Up Launches 'Active-Shooter' Mobile App For Schools. Turkish Forces Hit Kurds With Toxic Gas After Crossing Into Syria: Report.How WaPo, BuzzFeed, And Soros-Backed Group Pushed The Phrase "Fake News" Until It Backfired. Peter Thiel "Makes A Killing" With Massive Vol-Spike Bet.Florida Governor Says FBI Chief Chris Wray Should Resign.Weekend Reading: Hurricane Boost Dissipates.Massive Squeeze Sparks Best Week For Stocks In 7 Years As Dollar Crashes. Business Insider:  Visa(V) takes the blame for a glitch that hit Coinbase cryptocurrency investors with thousands of dollars in 'ghost' charges.Trump's defense budget is a wishlist for a massive military buildup — these are the planes, ships, and missiles he wants.Twitter users are being called out for posting fake claims of racially motivated assaults at 'Black Panther' showings.Ethereum founder warns cryptocurrencies 'could drop to near zero at any time'.Amazon(AMZN) is quietly coming after dollar stores — and it's a brilliant move.These are the sneaky ways apps like Instagram, Facebook, Tinder lure you in and get you 'addicted'.[...]



Weekly Scoreboard*

2018-02-16T17:09:36.483-05:00

S&P 500 2,732.22 +4.30%* The Weekly Wrap by Briefing.com.   IndicesDJIA 25,219.38 +4.25%NASDAQ 7,239.46 +5.31%Russell 2000 1,543.55 +4.45%S&P 500 High Beta 43.17 +4.66% Goldman 50 Most Shorted 145.70 +6.16% Wilshire 5000 28,221.77 +4.34%Russell 1000 Growth 1,411.48 +5.0%Russell 1000 Value 1,226.40 +4.17%S&P 500 Consumer Staples 572.90 +3.54%Vanda Cyclicals-Defensives 1.6230 +.63% NYSE Technology 1,840.52 +6.90%Transports 10,534.20 +4.0%Utilities 682.20 +3.18%Bloomberg European Bank/Financial Services 101.47 +2.42%MSCI Emerging Markets 48.85 +4.87%HFRX Equity Hedge 1,297.73 +1.43%HFRX Equity Market Neutral 1,012.19 +.59%Sentiment/InternalsNYSE Cumulative A/D Line 312,231 +1.48%Bloomberg New Highs-Lows Index 159 +521 Bloomberg Crude Oil % Bulls 19.1 +4.79% CFTC Oil Net Speculative Position 739,097 +.62% CFTC Oil Total Open Interest 2,589,270 -2.06% Total Put/Call .92 -30.30%OEX Put/Call .78 -59.38%ISE Sentiment 96.0 +37.14% NYSE Arms 1.05 +82.76%Volatility(VIX) 19.90 -30.87%S&P 500 Implied Correlation 41.47 -11.66%G7 Currency Volatility (VXY) 8.74 -3.53%  Emerging Markets Currency Volatility (EM-VXY) 8.55 -8.2% Smart Money Flow Index 19,294.16 +4.58%ICI Money Mkt Mutual Fund Assets $2.829 Trillion +.07%ICI US Equity Weekly Net New Cash Flow -$15.176 BillionAAII % Bulls 48.5 +31.0%AAII % Bears 21.4 -38.9% Futures Spot PricesCRB Index 193.58 +2.71%Crude Oil 61.64 +4.32%Reformulated Gasoline 175.14 +2.75%Natural Gas 2.57 -1.57%Heating Oil 191.30 +3.15%Gold 1,348.40 +2.58%Bloomberg Base Metals Index 216.64 +4.85% Copper 323.95 +6.15%US No. 1 Heavy Melt Scrap Steel 319.40 USD/Metric Tonne-.5%China Iron Ore Spot 76.44 USD/Metric Tonne +2.95% Lumber 510.0 +4.87%UBS-Bloomberg Agriculture 1,025.15 +1.23%EconomyAtlanta Fed GDPNow Forecast +3.2% -80.0 basis points ECRI Weekly Leading Economic Index Growth Rate 8.5% -30.0 basis pointsPhilly Fed ADS Real-Time Business Conditions Index -.0675 +4.53% US Economic Policy Uncertainty Index 153.03 +10.9% S&P 500 Blended Forward 12 Months Mean EPS Estimate 159.36 +.72%Citi US Economic Surprise Index 50.20 +7.5 points Citi Eurozone Economic Surprise Index 35.70 -7.0 points Citi Emerging Markets Economic Surprise Index 2.5 +3.4 points Fed Fund Futures imply 0.0% chance of no change, 100.0% chance of 25 basis point hike on 3/21US Dollar Index 89.10 -1.44%MSCI Emerging Markets Currency Index 1,719.08 +.84%Bitcoin/USD 10,005.81 +16.6% Euro/Yen Carry Return Index 137.51 -1.0% Yield Curve 68.5 -9.25 basis points10-Year US Treasury Yield 2.87% +5.0 basis pointsFederal Reserve's Balance Sheet $4.394 Trillion +.32%U.S. Sovereign Debt Credit Default Swap 20.14 unch. Illinois Municipal Debt Credit Default Swap 252.80 -.03% Italian/German 10Y Yld Spread 128.0 -2.25 basis pointsAsia Pacific Sovereign Debt Credit Default Swap Index 12.62 -8.25%Emerging Markets Sovereign Debt CDS Index 32.84 -5.60%Israel Sovereign Debt Credit Default Swap 52.97 -1.12% South Korea Sovereign Debt Credit Default Swap 52.20 -11.78% Russia Sovereign Debt Credit Default Swap 109.49 -15.12% iBoxx Offshore RMB China Corporate High Yield Index 147.72 +.21%10-Year TIPS Spread 2.10% +4.0 basis pointsTED Spread 27.75 +2.0 basis points 2-Year Swap Spread 27.0 -.5 basis point 3-Month EUR/USD Cross-Currency Basis Swap -32.75 +8.5 basis pointsN. America Investment Grade Credit Default Swap Index 52.70 -12.59%America Energy Sector High-Yield Credit Default Swap Index 382.0 -5.99% European Financial Sector Credit Default Swap Index 51.39 -6.4%Emerging Markets Credit Default Swap Index 119.33 -10.95%CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 159.0 +1.0 basis pointM1 Money Supply $3.635 Trillion -.13% Commercial Paper Outstanding 1,117.60 -1.1%4-Week Moving Average of Jobless Claims 228,500 +4,000Continuing Claims Unemployment Rate 1.4% unch.Average 30[...]



Stocks Slightly Higher into Final Hour on Less US/European/Emerging Markets Debt Angst, Economic Optimism, Oil Gain, Pharma/Homebuilding Sector Strength

2018-02-16T14:57:39.696-05:00

Broad Equity Market Tone:Advance/Decline Line: Modestly HigherSector Performance: MixedVolume: Above Average Market Leading Stocks: UnderperformingEquity Investor Angst:Volatility(VIX) 19.39 +1.36% Euro/Yen Carry Return Index 137.33 -.72% Emerging Markets Currency Volatility(VXY) 8.55 -.93% S&P 500 Implied Correlation 43.74 +2.93% ISE Sentiment Index 100.0 +6.38%Total Put/Call .89 -3.26% NYSE Arms 1.11 +34.3% Credit Investor Angst:North American Investment Grade CDS Index 52.72 -3.23% America Energy Sector High-Yield CDS Index 382.0 -.84%European Financial Sector CDS Index 51.20 -3.56%Italian/German 10Y Yld Spread 128.0 -2.25 basis pointsAsia Pacific Sovereign Debt CDS Index 12.62 -.98%Emerging Market CDS Index 120.21 -2.25%iBoxx Offshore RMB China Corporate High Yield Index 147.72 +.02%2-Year Swap Spread 27.0 -.75 basis point TED Spread 27.75 +1.0 basis point3-Month EUR/USD Cross-Currency Basis Swap -32.5 -.25 basis point Economic Gauges:Bloomberg Emerging Markets Currency Index 76.01 -.03% 3-Month T-Bill Yield 1.60% +1.0 basis pointYield Curve 68.5 -3.25 basis pointsChina Iron Ore Spot 76.35 USD/Metric Tonne n/aCiti US Economic Surprise Index 50.20 +15.0 pointsCiti Eurozone Economic Surprise Index 35.70 -1.4 pointsCiti Emerging Markets Economic Surprise Index 2.50 +.1 point 10-Year TIPS Spread 2.10 -2.0 basis points100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating +130 open in Japan China A50 Futures: Indicating +389 open in ChinaDAX Futures: Indicating +23 open in GermanyPortfolio: Slightly Lower: On losses in my tech/biotech sector longsDisclosed Trades: Added to my (IWM)/(QQQ) hedges Market Exposure: Moved to 75% Net Long[...]



Bear Radar

2018-02-16T13:22:15.068-05:00

Style Underperformer: Mid-Cap Growth +.3%Sector Underperformers: 1) Gold & Silver -2.1% 2) Networking -.7% 3) Restaurants -.5%Stocks Falling on Unusual Volume: ANET, IO, SHAK, PI, COHU, PCRX, TRUE, LOGM, CGNX, MDRX, SNBR, VFC, R, IPGP, MDXG and PDFSStocks With Unusual Put Option Activity: 1) GNC 2) ANET 3) DKS 4) RIOT 5) TJX Stocks With Most Negative News Mentions: 1) RIOT 2) COHU 3) LYB 4) AAP 5) SHLM Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2018-02-16T12:57:07.268-05:00

Style Outperformer: Small-Cap Value +1.1% Sector Outperformers: 1) Steel +3.1% 2) Pharma +1.7% 3) I-Banking +1.4% Stocks Rising on Unusual Volume:MULE, RRR, AIA, JELD, WAAS, EFAV, GLOB, BL, THS, BRX, DE, CARB, TYPE, FBR, KURA, KMPR, VRSN, WEN, DOOR, BXC, X, TWLO, QTEC, MHO, FWRD, COWN, CENX, NMIH, RRR, ETSY, CMG, ICHR, AMN, THS, KMPR, SYNT, BRX, AMAT and VRSNStocks With Unusual Call Option Activity: 1) GNC 2) ANET 3) FOXA 4) FITB 5) DE Stocks With Most Positive News Mentions: 1) DE 2) WEN 3) GVA 4) OMC 5) HD Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2018-02-16T11:10:30.085-05:00

NYSE Composite Index:
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Friday Watch

2018-02-15T22:22:36.106-05:00

Night Trading Asian equity indices are +.25% to +.75% on average.Asia Ex-Japan Investment Grade CDS Index 695.0 -1.5 basis points.  Asia Pacific Sovereign CDS Index 12.75 -.5 basis point.Bloomberg Emerging Markets Currency Index 76.14 +.13%.FTSE 100 futures +.41%. S&P 500 futures +.05%. NASDAQ 100 futures +.12%. Morning Preview Links Earnings of Note Company/Estimate (AXL)/.78(B)/.67(CPB)/.81(KO)/.38(DE)/1.19(IPGP)/1.70(ITT)/.59(SJM)/2.16(KHC)/.95(NHI)/1.33(NWL)/.68(R)/1.36(VFC)/1.02(VMC)/.74 Economic Releases8:30 am EST The Import Price Index MoM for January is estimated to rise +.6% versus a +.1% gain in December. The Import Price Index Ex Petrol for January is estimated to rise +.1% versus a -.2% decline in December.The Export Price Index MoM for January is estimated to rise +.3% versus a -.1% decline in December.Housing Starts for January are estimated to rise to 1235K versus 1192K in December.Building Permits for January is estimated to fall to 1300K versus 1302K in December. 10:00 am EST Univ. of Mich. Consumer Sentiment for February is estimated to fall to 95.4 versus 95.7 in January. Upcoming Splits None of noteOther Potential Market Movers The UK Retail Sales report, (HAS) investor update and the (MAT) analyst meeting could also impact trading today.BOTTOM LINE:  Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.[...]



Stocks Surging into Final Hour on Less US/European/Emerging Markets Debt Angst, Earnings Optimism, Oil Gain, Tech/Telecom Sector Strength

2018-02-15T15:19:06.670-05:00

Broad Equity Market Tone:Advance/Decline Line: Substantially HigherSector Performance: Most Sectors RisingVolume: Above Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 19.57 +1.6% Euro/Yen Carry Return Index 138.43 -.27% Emerging Markets Currency Volatility(VXY) 8.78 unch. S&P 500 Implied Correlation 41.80 -2.9% ISE Sentiment Index 86.0 -5.49%Total Put/Call .90 -22.41% NYSE Arms .99 +112.17% Credit Investor Angst:North American Investment Grade CDS Index 54.05 -6.39% America Energy Sector High-Yield CDS Index 386.0 -4.07%European Financial Sector CDS Index 53.04 -5.48%Italian/German 10Y Yld Spread 130.25 -.5 basis pointAsia Pacific Sovereign Debt CDS Index 12.71 -3.42%Emerging Market CDS Index 122.69 -4.96%iBoxx Offshore RMB China Corporate High Yield Index 147.69 +.15%2-Year Swap Spread 27.75 +.25 basis point TED Spread 26.75 +2.75 basis points3-Month EUR/USD Cross-Currency Basis Swap -32.25 +.75 basis point Economic Gauges:Bloomberg Emerging Markets Currency Index 76.05 +.35% 3-Month T-Bill Yield 1.59% +1.0 basis pointYield Curve 71.75 -2.75 basis pointsChina Iron Ore Spot 76.35 USD/Metric Tonne unch.Citi US Economic Surprise Index 35.20 -5.3 pointsCiti Eurozone Economic Surprise Index 37.10 -1.2 pointsCiti Emerging Markets Economic Surprise Index 2.40 +1.4 points 10-Year TIPS Spread 2.12 unch.100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating +76 open in Japan China A50 Futures: Indicating +309 open in ChinaDAX Futures: Indicating +25 open in GermanyPortfolio: Higher: On gains in my tech/retail/biotech/medical sector longsDisclosed Trades: None Market Exposure: 100% Net Long[...]



Bear Radar

2018-02-15T14:38:04.598-05:00

Style Underperformer: Small-Cap Value +.5%Sector Underperformers: 1) Oil Service -1.3% 2) Energy -.7% 3) Gold & Silver -.5%Stocks Falling on Unusual Volume: DSKE, NTAP, TGH, THS, CAI, TRTN, EQIX, FOSL, XEC, LXFT, WST, MRO, OMC and ADTStocks With Unusual Put Option Activity: 1) NTAP 2) AAP 3) SN 4) IPG 5)RSX Stocks With Most Negative News Mentions: 1) LXFT 2) MATR 3) CMP 4) SPWR 5) PDCO Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2018-02-15T14:13:45.095-05:00

Style Outperformer: Large-Cap Growth +1.0% Sector Outperformers: 1) Telecom +2.3% 2) Software +2.1% 3) Internet +1.7% Stocks Rising on Unusual Volume:SHLM, AMAG, SBCF, SEDG, IPCC, WBAI, TRIP, COOL, YNDX, NTB, HIIQ, CYBR, CVG, CBAY, SYNT, H, RM, LW, CSCO, PSDO, TWLO, USFD, FFIC, UFCS, CARB, AAN, EQT, MNOV, USFD, CSII, BMY, PPC, APTI, SERV, KKR, ABEO, DNKN, MMSI, RS, GPN, COHU and SHAKStocks With Unusual Call Option Activity: 1) PAGP 2) NTAP 3) P 4) MRNS 5) ITB Stocks With Most Positive News Mentions: 1) BMY 2) CTL 3) COWN 4) CSCO 5) A Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2018-02-15T11:21:21.844-05:00

NYSE Composite Index:
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Thursday Watch

2018-02-14T21:12:30.596-05:00

Night Trading Asian equity indices are +.25% to +1.25% on average.Asia Ex-Japan Investment Grade CDS Index 71.0 -2.25 basis points.  Asia Pacific Sovereign CDS Index 13.25 -.5 basis point.Bloomberg Emerging Markets Currency Index 75.88 +.12%.FTSE 100 futures +.54%. S&P 500 futures +.25%. NASDAQ 100 futures +.32%. Morning Preview Links Earnings of Note Company/Estimate (AAN)/.56(AVP)/.07(GPN)/1.06(ECA)/.11(OMC)/1.54(RS)/1.00(ZTS)/.66(ANET)/1.42(CBS)/1.14(CGNX)/.25(OSTK)/-.03(SHAK)/.06Economic Releases8:30 am EST Empire Manufacturing for February is estimated to rise to 18.0 versus 17.7 in January. Initial Jobless Claims for last week are estimated to rise to 228K versus 221K the prior week.Continuing Claims are estimated to rise to 1925K versus 1923K prior.PPI Final Demand MoM for January is estimated to rise +.4% versus a -.1% decline in December.PPI Ex Food and Energy MoM for January is estimated to rise +.2% versus a +.1% gain in December.Philly Fed Business Outlook Index for February is estimated to fall to 21.6 versus 22.2 in January. 9:15 am EST Industrial Production MoM for January is estimated to rise +.2% versus a +.9% gain in December.Manufacturing Production for January is estimated to rise +.3% versus a +.1% gain in December.Capacity Utilization is estimated to rise to 78.0% versus 77.9% in December. 10:00 am EST The NAHB Housing Market Index for February is estimated at 72.0 versus 72.0 in January. 4:00 pm EST Net Long-Term TIC Flows for December. Upcoming Splits None of noteOther Potential Market Movers The Australia Employment report, Eurozone Trade Balance report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (EMR) investor conference could also impact trading today.BOTTOM LINE:  Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.[...]



Stocks Surging into Final Hour on Less US/European/Emerging Markets Debt Angst, Oil Gain, Short-Covering, Metals & Mining/Tech Sector Strength

2018-02-14T15:30:31.999-05:00

Broad Equity Market Tone:Advance/Decline Line: Substantially HigherSector Performance: Almost Every Sector RisingVolume: Above Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 19.44 -22.2% Euro/Yen Carry Return Index 138.77 +.02% Emerging Markets Currency Volatility(VXY) 8.78 +1.27% S&P 500 Implied Correlation 42.09 -8.0% ISE Sentiment Index 95.0 +39.71%Total Put/Call 1.18 +21.65% NYSE Arms .40 -63.48% Credit Investor Angst:North American Investment Grade CDS Index 57.46 -1.73% America Energy Sector High-Yield CDS Index 403.0 -.46%European Financial Sector CDS Index 55.74 -1.42%Italian/German 10Y Yld Spread 130.75 -2.75 basis pointsAsia Pacific Sovereign Debt CDS Index 13.16 -3.83%Emerging Market CDS Index 129.32 -4.1%iBoxx Offshore RMB China Corporate High Yield Index 147.46 +.03%2-Year Swap Spread 27.5 +2.0 basis points TED Spread 23.50 -.5 basis point3-Month EUR/USD Cross-Currency Basis Swap -31.50 +.5 basis point Economic Gauges:Bloomberg Emerging Markets Currency Index 75.80 +.88% 3-Month T-Bill Yield 1.58% -1.0 basis pointYield Curve 74.50 +1.0 basis pointChina Iron Ore Spot 76.60 USD/Metric Tonne -.14%Citi US Economic Surprise Index 40.50 -2.8 pointsCiti Eurozone Economic Surprise Index 38.30 -.3 pointCiti Emerging Markets Economic Surprise Index 1.0 +.6 point 10-Year TIPS Spread 2.11 +5.0 basis points100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating +311 open in Japan China A50 Futures: Indicating +117 open in ChinaDAX Futures: Indicating +87 open in GermanyPortfolio: Higher: On gains in my tech/retail/biotech/medical sector longsDisclosed Trades: None Market Exposure: 100% Net Long[...]



Today's Headlines

2018-02-14T15:02:16.232-05:00

Bloomberg: Euro-Area Economy Keeps Cruising Speed as Outlook Improves. The euro-area economy maintained its robust growth pace at the end of last year, setting the stage for another solid performance in 2018 that may sway European Central Bank policy makers into winding down unprecedented stimulus.Tech Stocks, Leading Market Bounce, Just Made Up Half Their Loss. It’s too early to sound the all clear after the worst equity selloff in two years. But if you take a look at tech stocks, things are heading in the right direction. Not only is the biggest industry in the U.S. market is leading the four-day bounce from the bottom. The S&P 500 Information Technology index also just passed 1,131, marking a 50 percent retracement of the slump from Jan. 26 to Feb. 8, using intraday extremes. That’s bullish for chart watchers.CPI, Retail Data Not Pretty But May Overstate U.S. Economic Pain. (video) Faster-than-projected U.S. inflation and an unexpected decline in retail sales at the start of the year may cause some indigestion on Wall Street, but probably don’t mean much pain for the economy.Why Surging Clothing Prices Won't Drive U.S. Inflation for Long. (video)Oil Rebounds as Crude Accumulation Slows in U.S. Storage Tanks. (video) At the nation’s biggest pipeline hub, stockpiles have fallen for eight straight weeks, the longest streak for this time of year since 2014.Shorts in SPDR Junk Bond ETF Surge to Highest Level Since 2010. Short interest as a percentage of shares outstanding on the SPDR Bloomberg Barclays High Yield Bond ETF, ticker JNK, surged to more than 30 percent Wednesday, according to data from IHS Markit Ltd. That’s about a threefold increase from January and the largest short position in the fund since 2010.Wall Street Journal: AT&T(T) Targets DOJ Antitrust Chief in Time Warner Fight. Company lays the groundwork to challenge the legitimacy of government’s antitrust suit.Why You Should Cut Cable—and What You’ll Miss. YouTube TV is now the top internet-TV contender—but how does it stack up to your cable bundle?Can the Nordstrom(JWN) Family Outrun Retail’s Woes? Nordstrom’s founding family hopes heavy investing in stores and ecommerce will help the department-store chain reinvent itself for the next 50 years.Goldman Sachs(GS) Bolsters M&A Leadership. Dusty Philip will be to co-head of M&A alongside Michael Carr and Gilberto Pozzi.U.S. to Block Tax-Law Loophole on ‘Carried Interest’. Treasury to act within two weeks to block a hedge-fund maneuver to avoid paying higher tax rates.MarketWatch.com: Universal Display(OLED) stock soars on announcement of long-term agreement wtih Samsung Display.The ultimate buy and hold strategy: 2018 edition.This might be the time when you can finally get quality stocks on sale.Buy these 5 undervalued stocks on this market pullback.Don’t be scared by weak retail sales and rising inflation.70% of fund managers see danger ahead—the highest percentage since the financial crisis.Five economic reasons not to panic over the stock-market roller coaster.Out of 250,000 cryptocurrency traders, less than 100 paid taxes, according to survey. Fox News:Warren accuses Trump of 'disrespect' to Native Americans for 'Pocahontas' nickname.CNBC: Home Depot(HD) shares are having their worst month in 8 years. But here's why some traders are getting bullish. (video)Trump’s budget could let those on Medicare use this tax-favored account.The most important chart in the marke[...]



Bear Radar

2018-02-14T14:14:07.550-05:00

Style Underperformer: Large-Cap Value +1.2%Sector Underperformers: 1) Utilities -.5% 2) REITs -.5% 3) Tobacco unch.Stocks Falling on Unusual Volume: OMER, TRUP, LXFT, KMPR, SKT, MXL, GVA, BG, OHI and LADStocks With Unusual Put Option Activity: 1) GRPN 2) FOSL 3) MNKD 4) OMER 5) AMJ Stocks With Most Negative News Mentions: 1) TTPH 2) GLMD 3) OMER 4) CAR 5) CSRA Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2018-02-14T13:53:45.554-05:00

Style Outperformer: Large-Cap Growth +1.5% Sector Outperformers: 1) Steel +6.1% 2) Social Media +3.0% 3) Road & Rail +2.5% Stocks Rising on Unusual Volume:IEFA, DBVT, LAYN, FOSL, TWLO, CARB, WIX, SODA, CMG, SUM, YIN, CRTO, KBWB, NKTR, EFAV, MTCH, UGLD, BUFF, BIDU, OLED, BAND, ABMD, ZLAB, TLND, MOV, ACCO, IPG, PBYI, DBD, ABMD, SUM, OKTA, TRHC, DENN, UAA, FANG, BUFF, TAP, IO, HUBS and ZGStocks With Unusual Call Option Activity: 1) CREE 2) WSM 3) TWLO 4) TIF 5) NTAP Stocks With Most Positive News Mentions: 1) BIDU 2) TGT 3) IPG 4) VIPS 5) KLAC Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2018-02-14T11:05:51.777-05:00

NYSE Composite Index:
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