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BETWEEN THE HEDGES



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



Updated: 2017-05-22T22:13:11.387-04:00

 



Tuesday Watch

2017-05-22T22:13:11.401-04:00

Night Trading Asian equity indices are -.25% to +.25% on average.Asia Ex-Japan Investment Grade CDS Index 89.75 -2.75 basis points.  Asia Pacific Sovereign CDS Index 20.0 -1.25 basis points.Bloomberg Emerging Markets Currency Index 72.94 unch. S&P 500 futures -.15%. NASDAQ 100 futures -.12%. Morning Preview Links Earnings of Note Company/Estimate (AZO)/11.95(CBRL)/1.85(DSW)/.34(TOL)/.63(TCS)/.09(INTU)/3.87 Economic Releases  9:45 am Preliminary Markit US Manufacturing for May is estimated to rise to 53.0 versus 52.8 in April.10:00 am ESTNew Home Sales for April are estimated to fall to 610K versus 621K in March.The Richmond Fed Manufacturing Index for May is estimated to fall to 15.0 versus 20.0 in April.Upcoming Splits None of noteOther Potential Market Movers The Fed's Harker speaking, Eurozone GDP report, German IFO report, Berenberg European Conference, weekly US retail sales reports, CIA's Brennan testimony regarding Russian investigation, SunTrust Robinson Humphrey Financial Services Conference, (NVDA) annual meeting and the (RRGB) analyst day could also impact trading today.BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.[...]



Stocks Rising into Afternoon on Economic Optimism, Oil Gain, Short-Covering, Gaming/Tech Sector Strength

2017-05-22T13:34:43.277-04:00

Broad Equity Market Tone:Advance/Decline Line: HigherSector Performance: Almost Every Sector RisingVolume: Below Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 11.37 -5.56%Euro/Yen Carry Return Index 130.35 +.15% Emerging Markets Currency Volatility(VXY) 8.50 -1.28% S&P 500 Implied Correlation 41.34 -1.48%ISE Sentiment Index 95.0 +14.46%Total Put/Call .79 -19.39% NYSE Arms 1.27 +134.5% Credit Investor Angst:North American Investment Grade CDS Index 63.07 -2.2% America Energy Sector High-Yield CDS Index 359.0 -2.53%European Financial Sector CDS Index 67.79 -1.95%Western Europe Sovereign Debt CDS Index 9.16 -.49%Asia Pacific Sovereign Debt CDS Index 20.01 -.97%Emerging Market CDS Index 198.31 +.55%iBoxx Offshore RMB China Corporate High Yield Index 138.41 +.04%2-Year Swap Spread 24.25 unch.TED Spread 27.75 +1.5 basis points 3-Month EUR/USD Cross-Currency Basis Swap -31.0 -.25 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 72.92 +.12%3-Month T-Bill Yield .90% unch.Yield Curve 96.75 -.25 basis pointChina Import Iron Ore Spot $62.69/Metric Tonne n/aCiti US Economic Surprise Index -30.70 +2.7 pointsCiti Eurozone Economic Surprise Index 50.10 -9.4 points Citi Emerging Markets Economic Surprise Index 24.6 -3.2 points10-Year TIPS Spread 1.84 -1.0 basis point92.8% chance of Fed rate hike at July 26 meeting, 95.6% chance at Sept. 20 meetingOverseas Futures:Nikkei 225 Futures: Indicating -3 open in Japan China A50 Futures: Indicating -2 open in ChinaDAX Futures: Indicating -1 open in GermanyPortfolio: Higher: On gains in my medical/tech/retail sector longs  Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges Market Exposure: Moved to 100% Net Long[...]



Today's Headlines

2017-05-22T13:10:57.965-04:00

Bloomberg: EU Approves Tough Brexit Talks Stance, Demanding U.K. Pays. (video) The European Union finalized its tough Brexit negotiating position, reiterating its hard line on the U.K.’s departure bill and refusing to discuss a future trading arrangement until there is agreement on other key topics. “We want to move to a situation where all the commitments taken by the U.K. will be honored, as will ours with the U.K.,” Michel Barnier, the EU’s chief Brexit negotiator, told reporters in Brussels on Monday after a meeting of the remaining 27 national governments. “We need to settle the accounts, and that’s a question of trust between us to build our future relationship.”Pound Falls as Brexit Tensions Rise, Conservative Lead Narrows. (video)European Stocks Little Changed After Early Gains. (video)Iron Stockpiles Hit Record in China as Quality Gets Scrutiny. The record heap of iron ore on China’s doorstep just got even bigger, with the increase in holdings so far this year eclipsing the build up seen over all of 2016 as mills produce unprecedented amounts of steel. Stockpiles at ports rose 1.3 percent to 136 million metric tons, expanding for a fourth week, according to Shanghai Steelhome E-Commerce Co. So far in 2017, they’ve risen 22.05 million tons, surpassing the 20.85 million added last year.Your Evening Briefing.Delay on Obamacare Subsidy Decision Leaves Insurers in Limbo.Wall Street Journal: Ford(F) Replaces CEO Mark Fields With Jim Hackett Amid Pressure on Profit. Move comes amid a significant decline in share-price value during CEO’s three-year tenure.Trump Meets With Israeli Leader in Bid to Revive Peace Process. President hopes to restart stalled negotiations between Palestinian and Israeli leaders.Companies Are Winning the Battle Over Adjusted Earnings. More big firms convince the SEC that such figures aren’t misleading investors. North Korea’s Whirlwind Progress on Missile Sharpens Threat. Polaris-2 missile goes from first public test to mass production in three months.U.S., Europe Face Divisions Over Iran Policy. Trump administration seeks to isolate Tehran as European nations see moderation in Rouhani’s re-election.Fox News: Flynn to invoke Fifth Amendment, rebuff Senate panel subpoena. (video)CNBC: Is the rally still intact? Maybe. Here’s what I need to see to believe it.These 13 stocks are hedge funds' new favorites, Goldman says.Buy Qualcomm(QCOM) because the NXP acquisition benefit outweighs the Apple risk, JPMorgan says.Defense stocks soar to all-time highs on $110 billion US-Saudi Arabia weapons deal. (video)Trump Saves Obamacare Again... For Now.It’s becoming increasingly clear that Jared Kushner is part of Trump’s Russia problem.The S&P 500 appears primed to soar 10%, says analyst who called the rally way back in July. (video)Zero Hedge: Trump's Budget Will Slash $1.7 Trillion In Entitlements, Cut Food Stamps By 25%.Seth Rich Plot Thickens: "DC Insider" Speaks Of "Complete Panic" At Highest Levels Of DNC.Bitcoin Blasts Through $2200, Here's Why. (graph)JPM Cuts 10Y Yield Forecasts "Significantly Lower" Due To Weaker Inflation Outlook.Why The Left Refuses To Talk About Venezuela.Here's How Facebook Decides What You Can And Can't See. (video)[...]



Bear Radar

2017-05-22T12:13:08.250-04:00

Style Underperformer: Large-Cap Value +.3%Sector Underperformers: 1) Coal -1.2% 2) Hospitals -1.0% 3) Construction -.4%Stocks Falling on Unusual Volume: ORBK, GLYC, ZOES, LJPC, MNTA, SNCR, SRPT and PRAA Stocks With Unusual Put Option Activity: 1) TWX 2) HPQ 3) HES 4) GM 5) AAP Stocks With Most Negative News Mentions: 1) CNC 2) VIA/B 3) APC 4) COF 5) WFC Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-05-22T11:56:31.637-04:00

Style Outperformer: Mid-Cap Growth +.7% Sector Outperformers: 1) Gaming +2.1% 2) Hospitals +1.3% 3) Networking +1.3% Stocks Rising on Unusual Volume:PBYI, CMCM, RDUS, YRD, SOHU, CYOU, COOL, KWEB, ZTO, BX, FL, GSM, JKS, NTNX, PI, BAH, JKHY, AAOI, MOMO, NVMI, LL, VSM, ICHR, BITA, VAC, NTNX, CAR, HIBB, PLCE and MCKStocks With Unusual Call Option Activity: 1) ETE 2) ETSY 3) MNKD 4) RF 5) MGM Stocks With Most Positive News Mentions: 1) ISRG 2) QCOM 3) TIF 4) NVDA 5) ACN Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-05-22T10:23:34.445-04:00

NYSE Composite Index:
(image)



Monday Watch

2017-05-21T23:00:54.562-04:00

Today's Headlines Bloomberg: U.K. Threatens to Quit Brexit Talks If It Faces Massive Bill. The U.K. will quit talks on leaving the European Union unless the bloc drops its demands for a divorce payment as high as 100 billion euros ($112 billion), Brexit Secretary David Davis said. Britain’s negotiations would otherwise be plunged into “chaos,” and even a 1 billion-pound settlement would be “a lot of money,” Davis said in an interview published in the Sunday Times.Greece's Bailout Review Stalls as Creditors Debate Debt Relief. Euro-area finance ministers gather in Brussels on Monday to try to clinch a deal on easing Greece’s debt burden, which would resolve a stalled review of the country’s bailout and pave the way for a new set of rescue loans. While Greece and its bailout supervisors have agreed on economic overhauls, the completion of the country’s review has been held back by disagreements between key creditors over how much debt relief is needed.Spanish Radical Wins Socialist Vote Signaling Trouble for Rajoy. Pedro Sanchez won back the leadership of the Spanish Socialist party after promising to mount tougher opposition to Mariano Rajoy’s minority government. With 91 percent of votes counted, Sanchez was backed by 49.8 percent of party members who took part in the vote against 40.2 percent for the establishment favorite Susana Diaz, the party said on its website. The result was a vindication for Sanchez, who was ousted by party grandees in September against the wishes of the rank-and-file membership.Pressure Mounts on Temer as Brazil Lawyers Vote for Impeachment. (video) Brazil President Michel Temer suffered a setback in trying to fend off allegations of corruption and cover-up after the country’s influential bar association voted in favor of his impeachment. The council of Brazil’s Order of Lawyers, or OAB by its Brazilian acronym, voted 25 to 1 in favor of an impeachment hearing for Temer, and will file its request in the lower house of Congress in coming days, it said early on Sunday. The OAB says Temer failed to denounce criminal activities, broke with presidential decorum, and promised undue favors to individuals.Japanese Exports Rise for Fifth Consecutive Month in April. Japanese exports expanded for a fifth consecutive month in April, with shipments to China surging as global demand continued to support the nation’s economic recovery.Aussie Housing Spurs S&P to Cut Banks; Biggest Lenders Spared. S&P Global Ratings downgraded the credit scores of almost all of Australia’s financial institutions as it warned the risks of a property market downturn are increasing, although expectations of government support saw the very largest banks spared.Asian Stocks May Rise, Oil Extends Gains Above $50. Crude oil climbed toward $51 a barrel and Asian stocks advanced, helped by a rise in energy producers amid speculation cuts to crude supplies will be extended further. The yen declined after a volatile week for markets. Stocks from Sydney to Hong Kong rose with energy and raw-materials posting the biggest moves on the MSCI Asia Pacific Index. Saudi Arabia’s energy minister said all producers participating in a deal to limit output agree on extending the cuts by nine months. The won surged even after North Korea conducted another ballistic missile test on Sunday. The pound fell as the U.K. threatened to exit talks on its departure from Europe. Japan’s Topix index rose 0.4 percent, paring an earlier gain of 0.6 percent. The measure lost 1.3 percent last week. Australia’s S&P/ASX 200 Index climbed 0.8 percent and South Korea’s Kospi index advanced 0.3 percent. Hong Kong’s Hang Seng climbed 0.8 percent and the Hang Seng China Enterprises Index jumped 0.9 percent. The Shanghai Composite added 0.2 percent.Wall Street Journal: Trump's First Foreign Trip: Live Coverage.Demo[...]



Weekly Outlook

2017-05-21T21:57:57.712-04:00

BOTTOM LINE: I expect US stocks to finish the week modestly higher on yen weakness, oil strength, less European/Emerging Markets/US High-Yield Debt Angst, economic optimism, technical buying and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.
(image)



Today's Headlines

2017-05-21T14:38:18.712-04:00

Bloomberg:One Awful Day Ruins Week for S&P 500 as Trump Drama Gets Serious. The Trump trade had its first major test as investors sold down stocks at the fastest rate since before the election on Wednesday. It may not have broken the S&P 500’s momentum, but it certainly made a dent. Investors navigated a swarm of headlines from the White House. The biggest revelation, reports that President Donald Trump asked former FBI Director James Comey to drop the bureau’s investigation into ties between the administration and Russia, sent markets reeling as the S&P 500 posted its worst day since September. Yet stocks were quick to rebound with back-to-back advances that brought the weekly move in the benchmark gauge to just a 0.4 percent dip. The Dow Jones Industrial average also declined, erasing 92 points to end the five days at 20,804.84.Merkel Seeks Push for Ukraine Cease-Fire Talks With Macron. German Chancellor Angela Merkel said she and French President Emmanuel Macron will seek to revive talks with Russian President Vladimir Putin on a cease-fire in eastern Ukraine. Speaking alongside Ukrainian President Petro Poroshenko during a meeting near Berlin, Merkel said Macron had backed the so-called Minsk peace process on Monday during the first visit to the German capital after his inauguration.In Corruption-Hardened Brazil, Latest Revelations Still Shock. In the three years since Brazil’s sweeping corruption scandal exploded, there have been plenty of jaw-dropping moments. But even in a nation hardened by allegations of crooked politicians and businessmen on the take, the latest crisis has come as a shock. The details trickling out often seem to have come straight out of a best-selling political thriller. On Thursday, a Rio de Janeiro newspaper published photos allegedly showing a lawmaker and a senator’s relative handling bags of cash at restaurants and at the Sao Paulo headquarters of meat company JBS SA.Saudis See All ‘On Board’ to Extend Oil Cuts for 9 Months. All producers agree to extend crude output cuts by nine months to help trim a supply glut, according to Saudi Arabia’s energy minister. The extension through the first quarter of 2018 will help producers reach their goal of trimming global stockpiles to a five-year average, Khalid Al-Falih said. OPEC and other global producers such as Russia had agreed to reduce production in the first six month of this year, and the decision to extend the cuts will be taken when they meet in Vienna at the end of the month, Al-Falih said.JPMorgan's Dimon Signals Optimism on Economy, U.S. Rule Changes. (video) JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he remains optimistic about the global economy and the prospects for regulatory reform under U.S. President Donald Trump. “Japan is growing more than it has grown in 15 years, Europe is doing well all things considered, America is chugging along,” Dimon said in an exclusive interview with Bloomberg TV on Saturday in Riyadh, where he attended a Saudi-U.S. CEO forum held to coincide with Trump’s visit to the kingdom. “Even the IMF, which is always warning about stuff, is saying the world will grow faster than expected.”Why the Rout in Retail Shouldn't Be a Big Worry for U.S. Economy. A furious pace of store closings and bankruptcies has drummed up fears that U.S. retail is collapsing. Not so fast: Many indicators suggest that retail employment is unlikely to shrivel and the economy will withstand any shock from the sector’s rout. Granted, the industry’s current woes can’t be ignored. Retail sales account for almost half of consumer spending, which in turn makes up about 70 percent of the economy. Retailers employ 15.9 million people, or about one in every 10 U.S. workers, and positions at certain types of stor[...]



Market Week in Review

2017-05-21T14:36:14.490-04:00

S&P 500 2,381.73 -.38%*The Weekly Wrap by Briefing.com. *5-Day Change[...]



Weekly Scoreboard*

2017-05-19T21:31:05.333-04:00

IndicesS&P 500 2,381.73 -.38%DJIA 20,804.84 -.44%NASDAQ 6,083.70 -.61%Russell 2000 1,367.33 -1.12%S&P 500 High Beta 36.79 -.30% Goldman 50 Most Shorted 127.57 -.52% Wilshire 5000 24,648.95 -.40%Russell 1000 Growth 1,173.55 -.39%Russell 1000 Value 1,118.53 -.32%S&P 500 Consumer Staples 567.65 +.64%Vanda Cyclicals-Defensives 1.3442 +.43% Morgan Stanley Technology 1,444.61 -.73%Transports 8,879.19 -1.35%Utilities 703.27 +.43%Bloomberg European Bank/Financial Services 100.28 -1.44%MSCI Emerging Markets 40.91 -1.17%HFRX Equity Hedge 1,188.32 -.49%HFRX Equity Market Neutral 994.49 -.79%Sentiment/InternalsNYSE Cumulative A/D Line 288,177 +.33%Bloomberg New Highs-Lows Index -79 -308Bloomberg Crude Oil % Bulls 44.0 -38.4% CFTC Oil Net Speculative Position 328,751 -11.9% CFTC Oil Total Open Interest 2,276,413 +2.75% Total Put/Call .98 +15.29%OEX Put/Call 2.52 +6.78%ISE Sentiment 83.0 -17.82%NYSE Arms .54 +58.21%Volatility(VIX) 10.70 +.76%S&P 500 Implied Correlation 42.05 -1.12%G7 Currency Volatility (VXY) 7.88 +7.21%Emerging Markets Currency Volatility (EM-VXY) 8.61 +8.03% Smart Money Flow Index 19,353.37 -.42%ICI Money Mkt Mutual Fund Assets $2.645 Trillion -.19%ICI US Equity Weekly Net New Cash Flow +$1.673 BillionAAII % Bulls 23.9 -27.1%AAII % Bears 34.3 +13.3% Futures Spot PricesCRB Index 185.08 +1.86%Crude Oil 50.33 +5.25%Reformulated Gasoline 165.0 +3.50%Natural Gas 3.26 -4.96%Heating Oil 158.27 +6.08%Gold 1,253.60 +2.1%Bloomberg Base Metals Index 172.73 +1.15% Copper 258.15 +2.08%US No. 1 Heavy Melt Scrap Steel 266.67 USD/Ton +3.23%China Iron Ore Spot 62.69 USD/Ton +2.13%Lumber 363.0 -.93%UBS-Bloomberg Agriculture 1,088.71 +.64%EconomyAtlanta Fed GDPNow Forecast +4.1% +50.0 basis pointsECRI Weekly Leading Economic Index Growth Rate +5.0% -10.0 basis pointsPhilly Fed ADS Real-Time Business Conditions Index .5158 -5.25% US Economic Policy Uncertainty Index 163.64 +178.78% S&P 500 Blended Forward 12 Months Mean EPS Estimate 136.49 +.31%Citi US Economic Surprise Index -33.40 -3.9 pointsCiti Eurozone Economic Surprise Index 59.50 -10.0 pointsCiti Emerging Markets Economic Surprise Index 27.80 -5.3 points Fed Fund Futures imply 2.5% chance of no change 97.5% chance of 25 basis point hike on 6/14US Dollar Index 97.15 -2.06%MSCI Emerging Markets Currency Index 1,581.86 -.37% Euro/Yen Carry Return Index 130.28 +.76% Yield Curve 97.0 -7.0 basis points10-Year US Treasury Yield 2.24% -11.0 basis pointsFederal Reserve's Balance Sheet $4.428 Trillion -.15%U.S. Sovereign Debt Credit Default Swap 21.75 -10.38%Illinois Municipal Debt Credit Default Swap 393.0 -.05% Western Europe Sovereign Debt Credit Default Swap Index 9.20 +16.75%Asia Pacific Sovereign Debt Credit Default Swap Index 20.28 -1.12%Emerging Markets Sovereign Debt CDS Index 48.40 +6.46%Israel Sovereign Debt Credit Default Swap 68.62.0 +2.42% South Korea Sovereign Debt Credit Default Swap 56.93 +2.56% Russia Sovereign Debt Credit Default Swap 152.83 -1.61% iBoxx Offshore RMB China Corporate High Yield Index 138.35 +.51%10-Year TIPS Spread 1.85% -1.0 basis pointTED Spread 26.75 -5.0 basis points 2-Year Swap Spread 24.25 -.75 basis point 3-Month EUR/USD Cross-Currency Basis Swap -30.75 -1.25 basis pointsN. America Investment Grade Credit Default Swap Index 63.36 +.68% America Energy Sector High-Yield Credit Default Swap Index 369.0 -.46% European Financial Sector Credit Default Swap Index 69.47 +1.94%Emerging Markets Credit Default Swap Index 196.71 +.57%CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 145.50 unch.M1 Money Supply $3.466 Trillion +1.35% Commercial Paper Outstanding 986.60 +.5%4-Week Moving Average of Jobless Claims 240,750 -2,750Continuing Claims Unemployment Rate 1.4% unch.Average 30-Year Mortgage Rate 4.02% -3.0 basis pointsWeekly Mortgage Applications 398.8[...]



Stocks Surging into Final Hour on Earnings Optimism, Oil Gain, Short-Covering, Financial/Energy Sector Strength

2017-05-19T14:58:48.442-04:00

Broad Equity Market Tone:Advance/Decline Line: Substantially HigherSector Performance: Almost Every Sector RisingVolume: Slightly Above Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 12.23 -16.58%Euro/Yen Carry Return Index 130.26 +.82% Emerging Markets Currency Volatility(VXY) 8.71 -3.76% S&P 500 Implied Correlation 41.81 -8.69%ISE Sentiment Index 85.0 -8.6%Total Put/Call .93 -16.96% NYSE Arms .57 -50.19% Credit Investor Angst:North American Investment Grade CDS Index 63.65 -2.4% America Energy Sector High-Yield CDS Index 369.0 +.25%European Financial Sector CDS Index 69.16 -2.47%Western Europe Sovereign Debt CDS Index 9.40 +8.24%Asia Pacific Sovereign Debt CDS Index 20.28 -4.02%Emerging Market CDS Index 196.18 -4.61%iBoxx Offshore RMB China Corporate High Yield Index 138.35 +.04%2-Year Swap Spread 24.25 +1.5 basis pointsTED Spread 26.25 -3.0 basis points 3-Month EUR/USD Cross-Currency Basis Swap -30.75 +2.25 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 72.91 +1.10%3-Month T-Bill Yield .90% +1.0 basis pointYield Curve 97.0 +1.0 basis pointChina Import Iron Ore Spot $62.69/Metric Tonne +1.77%Citi US Economic Surprise Index -33.40 +.2 pointCiti Eurozone Economic Surprise Index 59.50 -2.4 points Citi Emerging Markets Economic Surprise Index 27.8 +.1 point10-Year TIPS Spread 1.85 +7.0 basis points90.2% chance of Fed rate hike at July 26 meeting, 93.7% chance at Sept. 20 meetingOverseas Futures:Nikkei 225 Futures: Indicating +150 open in Japan China A50 Futures: Indicating +28 open in ChinaDAX Futures: Indicating -5 open in GermanyPortfolio: Higher: On gains in my medical/tech/retail sector longs  Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) shortMarket Exposure: Moved to 75% Net Long[...]



Bear Radar

2017-05-19T13:17:48.740-04:00

Style Underperformer: Small-Cap Growth +.9%Sector Underperformers: 1) Retail +.1% 2) Utilities +.2% 3) Biotech +.2%Stocks Falling on Unusual Volume: NVRO, GCO, HALO, FL and MMYT Stocks With Unusual Put Option Activity: 1) CHRW 2) AXL 3) WTW 4) CY 5) AMAT Stocks With Most Negative News Mentions: 1) CPB 2) SYMC 3) GPS 4) LB 5) MO Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-05-19T12:57:38.687-04:00

Style Outperformer: Mid-Cap Value +1.2% Sector Outperformers: 1) Steel +4.2% 2) Hospitals +4.2% 3) Oil Service +2.5% Stocks Rising on Unusual Volume:PTX, GLYC, FLN, AAWW, DE, ADSK, CYOU, HCC, LL, CBI, MCK, AZUL, JKS, CRM, PTC, SOHU, TITN, BITA, WPPGY, ROST, CQH, RVNC, ITUB, HIBB, CREE, AGCO, TAL and SKTStocks With Unusual Call Option Activity: 1) ADSK 2) LL 3) ASH 4) TXN 5)DE Stocks With Most Positive News Mentions: 1) ADSK 2) DE 3) MCK 4) NVDA 5) WMT Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-05-19T11:36:56.505-04:00

NYSE Composite Index:
(image)



Friday Watch

2017-05-18T23:21:36.532-04:00

Night Trading Asian equity indices are -.25% to +.25% on average.Asia Ex-Japan Investment Grade CDS Index 92.5 unch.  Asia Pacific Sovereign CDS Index 21.25 +.5 basis point.Bloomberg Emerging Markets Currency Index 72.13 +.02%. S&P 500 futures -.04%. NASDAQ 100 futures -.08%. Morning Preview Links Earnings of Note Company/Estimate (CPB)/.64(DE)/1.69(FL)/1.38(QSII)/.19 Economic Releases  None of noteUpcoming Splits None of noteOther Potential Market Movers The Fed's Bullard speaking, German PPI, (AET) annual meeting, (CHK) annual meeting, (JCP) annual meeting and the (COP) investor update could also impact trading today.BOTTOM LINE:  Asian indices are mostly higher, boosted by energy and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modesty lower.  The Portfolio is 50% net long heading into the day.[...]



Stocks Slightly Higher into Afternoon on Economic Optimism, Oil Gain, Technical Buying, Biotech/Semi Sector Strength

2017-05-18T12:27:11.305-04:00

Broad Equity Market Tone:Advance/Decline Line: Modestly HigherSector Performance: MixedVolume: Heavy Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 14.59 -6.41%Euro/Yen Carry Return Index 128.70 -.29% Emerging Markets Currency Volatility(VXY) 7.83 unch. S&P 500 Implied Correlation 44.61 -6.68%ISE Sentiment Index 105.0 +19.3%Total Put/Call 1.08 -.92% NYSE Arms 1.53 +27.1% Credit Investor Angst:North American Investment Grade CDS Index 65.37 +1.69% America Energy Sector High-Yield CDS Index 369.0 +2.1%European Financial Sector CDS Index 71.12 +1.99%Western Europe Sovereign Debt CDS Index 8.51 +8.48%Asia Pacific Sovereign Debt CDS Index 21.52 +3.79%Emerging Market CDS Index 205.93 +4.55%iBoxx Offshore RMB China Corporate High Yield Index 138.30 +.14%2-Year Swap Spread 22.75 +.25 basis pointTED Spread 29.25 +1.25 basis points 3-Month EUR/USD Cross-Currency Basis Swap -33.0 -1.5 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 72.910 -1.14%3-Month T-Bill Yield .89% -1.0 basis pointYield Curve 96.0 -2.0 basis pointsChina Import Iron Ore Spot $61.60/Metric Tonne -.96%Citi US Economic Surprise Index -33.60 +3.9 pointsCiti Eurozone Economic Surprise Index 61.90 -1.9 points Citi Emerging Markets Economic Surprise Index 27.7 -.7 point10-Year TIPS Spread 1.78 -2.0 basis points81.0% chance of Fed rate hike at July 26 meeting, 86.0% chance at Sept. 20 meetingOverseas Futures:Nikkei 225 Futures: Indicating -43 open in Japan China A50 Futures: Indicating +13 open in ChinaDAX Futures: Indicating -27 open in GermanyPortfolio: Slightly Higher: On gains in my biotech/tech/retail sector longs  Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) shortMarket Exposure: Moved to 25% Net Long[...]



Bear Radar

2017-05-18T11:25:16.465-04:00

Style Underperformer: Mid-Cap Value +.2%Sector Underperformers: 1) Steel -4.2% 2) Gold & Silver -2.3% 3) Oil Tankers -2.3%Stocks Falling on Unusual Volume: AZUL, GOL, CSCO, VIV, ITUB, ZTO, UGP, CBD, BAK, CBI, ERJ, PSTG and NLNK Stocks With Unusual Put Option Activity: 1) EMES 2) TPX 3) LB 4) CSCO 5) ETE Stocks With Most Negative News Mentions: 1) ELGX 2) ASNA 3) FSLR 4) JACK 5) TPX Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-05-18T10:45:02.811-04:00

Style Outperformer: Large-Cap Growth +.6% Sector Outperformers: 1) Social Media +1.8% 2) Biotech +1.6% 3) Semis +1.6% Stocks Rising on Unusual Volume:SNDX, ATHN, PLCE, SHPG, SOHU, CYOU, WB, INCY, MZOR, CUK, PERY, LB, NEWM, TIS, WMT, NVS, KMX, NVDA, LSXMA, MOMO, AMAT, BKE, TTD and SHAKStocks With Unusual Call Option Activity: 1) K 2) HPE 3) PLCE 4) DOW 5) LB Stocks With Most Positive News Mentions: 1) SHAK 2) INCY 3) KMX 4) WMT 5) VRTX Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-05-18T10:17:03.640-04:00

NYSE Composite Index:
  • Volume Running +41.4% Above 100-Day Average
  • 6 Sectors Rising, 4 Sectors Declining
  • 41.2% of Issues Advancing, 54.4% Declining
  • 21 New 52-Week Highs, 60 New Lows
  • Vix 15.0 -3.6%
  • TRIN/Arms 1.26 +4.9%
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Thursday Watch

2017-05-17T22:11:52.737-04:00

Night Trading Asian equity indices are -1.25% to -.75% on average.Asia Ex-Japan Investment Grade CDS Index 92.5 +2.75 basis points.  Asia Pacific Sovereign CDS Index 20.75 +.75 basis point.Bloomberg Emerging Markets Currency Index 72.70 -.33%. S&P 500 futures +.04%. NASDAQ 100 futures +.13%. Morning Preview Links Earnings of Note Company/Estimate (BABA)/.66(BKE)/.33(EXP)/.85(HIBB)/.96(MNRO)/.32(PERY)/.84(RL)/.78(TK)/.11(PLCE)/1.64(WMT)/.96(AMAT)/.76(ADSK)/-.23(GPS)/.29(MCK)/3.01(ROST)/.80(CRM)/.26 Economic Releases  8:30 am ESTInitial Jobless Claims for last week are estimated to rise to 240K versus 236K the prior week.Continuing Claims are estimated to rise to 1950K versus 1918K prior.Philly Fed Business Outlook Index for May is estimated to fall to 18.5 versus 22.0 in April. 10:00 am ESTThe Leading Index for April is estimated to rise +.4% versus a +.4% gain in March. Upcoming Splits None of noteOther Potential Market Movers The Fed's Mester speaking, Australia Employment Change report, weekly Bloomberg Consumer Comfort Index, Bloomberg Economic Expectations Index for May, weekly EIA natural gas inventory report, BofA Merrill Transports Conference, (MT) general meeting and the (DB) annual meeting could also impact trading today.BOTTOM LINE:  Asian indices are lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.[...]



Stocks Falling Substantially into Final Hour on Diminishing Tax/Healthcare Reform Hopes, Less Economic Optimism, Yen Strength, Financial/Technology Sector Weakness

2017-05-17T15:34:19.888-04:00

Broad Equity Market Tone:Advance/Decline Line: Substantially LowerSector Performance: Almost Every Sector DecliningVolume: Above Average Market Leading Stocks: UnderperformingEquity Investor Angst:Volatility(VIX) 14.5 +35.5%Euro/Yen Carry Return Index 129.27 -1.19% Emerging Markets Currency Volatility(VXY) 7.69 +2.81% S&P 500 Implied Correlation 46.01 +16.9%ISE Sentiment Index 108.0 +1.0%Total Put/Call 1.04 +33.3% NYSE Arms 1.25 +10.72% Credit Investor Angst:North American Investment Grade CDS Index 64.73 +5.0% America Energy Sector High-Yield CDS Index 361.0 -.39%European Financial Sector CDS Index 70.2 +5.26%Western Europe Sovereign Debt CDS Index 7.85 +.58%Asia Pacific Sovereign Debt CDS Index 20732 +3.55%Emerging Market CDS Index 195.39 +2.99%iBoxx Offshore RMB China Corporate High Yield Index 138.11 +.02%2-Year Swap Spread 22.5 -.75 basis pointTED Spread 28.0 unch. 3-Month EUR/USD Cross-Currency Basis Swap -31.50 -2.0 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 72.96 -.31%3-Month T-Bill Yield .89% -1.0 basis pointYield Curve 98.0 -5.0 basis pointsChina Import Iron Ore Spot $62.20/Metric Tonne +1.68%Citi US Economic Surprise Index -37.50 -.1 pointCiti Eurozone Economic Surprise Index 63.80 -1.6 points Citi Emerging Markets Economic Surprise Index 28.4 -2.1 points10-Year TIPS Spread 1.80 -4.0 basis points80.4% chance of Fed rate hike at July 26 meeting, 85.0% chance at Sept. 20 meetingOverseas Futures:Nikkei 225 Futures: Indicating -315 open in Japan China A50 Futures: Indicating -16 open in ChinaDAX Futures: Indicating -58 open in GermanyPortfolio: Lower: On losses in my biotech/tech/retail/medical sector longs  Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) shortMarket Exposure: Moved to 50% Net Long[...]



Today's Headlines

2017-05-17T15:01:56.101-04:00

Bloomberg:Merkel Says U.K. Will Pay Price If EU Immigration Is Curbed. German Chancellor Angela Merkel said the U.K. will pay a price if it curbs immigration from the European Union after Brexit, highlighting her uncompromising stance on the fundamentals of future relations. “This isn’t meant maliciously, but you can’t have all of the good things and then say there’s a limit of 100,000 or 200,000 EU citizens” allowed to enter the U.K., Merkel said on a panel in Berlin on Wednesday. “That won’t work. At that point, we’ll have to think about which restrictions we do on the European side to compensate for that.”Europe Stocks Drop Most in Eight Months as Trump Concern Deepens. European stocks tumbled as the impact of a worsening U.S. political crisis spread throughout the world after a report that President Donald Trump had asked the FBI director to drop an investigation into a former top aide. The Stoxx Europe 600 Index slid 1.2 percent at the close in the biggest drop since September. The benchmark had rallied as much as 21 percent since a Nov. 4 low amid bets for stronger global growth and increased U.S. fiscal spending following Trump’s election, reaching a 21-month high earlier this month.Apple(AAPL) Falls on Concerns About Trump's Tax Reform. Apple has $240 billion in cash and equivalents outside the U.S., about 93 percent of its total reserves, and Trump has proposed a tax cut to repatriate offshore holdings. The stock fell as much as 3.5 percent, the most since November, to $150, while the S&P 500 fell as much as 1.4 percent.Fed's Cut in Its Big Bond Hoard Likely to Begin at Glacial Pace. (video) If you thought the Federal Reserve’s interest rate increases have been gradual, wait until you see what it has planned for its $4.5 trillion balance sheet. The central bank looks likely to begin reducing its bond holdings at a glacial pace given how uncertain officials are about the impact on financial markets, monetary policy and the economy. The aim, according to New York Fed President William Dudley, is to ensure that the drawdown is “a very modest, minor event.”Tech Stocks Surge as Hedge Funds Bail Out. The rally in America’s biggest technology companies is making the smart money look dumb. In a quarter when Apple Inc., Amazon.com Inc. and Alphabet Inc. rose three times as fast as the market, regulatory filings show hedge funds were net sellers of a combined 7.5 million shares. On paper, that’s $600 million of lost upside since March 31, since each stock has kept rising.Wall Street Journal: Washington Tumult Jolts Stocks, Sends Dollar Lower. The ICE U.S. Dollar Index, a closely watched measure of the dollar’s value, is set to erase its post election gains.Trump Trade Reboot Spurs U.S. Push by China’s Sovereign-Wealth Fund. In an interview, CIC President Tu Guangshao says fund hopes to “significantly increase” direct investments in U.S. Iran Nuclear Deal in Play as Hard-Line Candidate Gains on President. Voters choose Friday between candidates with conflicting visions—President Hassan Rouhani, who has made an opening to the West, and a political newcomer wary of where such a path leads. MarketWatch.com: Here’s how impeachment works — and why Trump is safe for now.Fed’s Kashkari says central bank should avoid fighting asset-price bubbles.Fox News: Comey cracks Republican wall: GOP pols voice concerns on Trump 'drama'. (video)CNBC: Real estate C[...]



Bear Radar

2017-05-17T13:40:34.754-04:00

Style Underperformer: Small-Cap Value -2.2%Sector Underperformers: 1) Banks -3.8% 2) Semis -2.7% 3) Road & Rail -2.6%Stocks Falling on Unusual Volume: WSR, PLAB, BZUN, AEO, FRTA, ACXM, SSYS, FWONK, TAL, CXW, AMD, CNCE, TRVG, EXEL and HTZ Stocks With Unusual Put Option Activity: 1) EXPR 2) NOW 3) JACK 4) AEO 5) URBN Stocks With Most Negative News Mentions: 1) PLUG 2) SSYS 3) GLFM 4) ETSY 5) VIVO Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-05-17T13:32:48.905-04:00

Style Outperformer: Large-Cap Growth -1.0% Sector Outperformers: 1) Gold & Silver +1.4% 2) REITs +.5% 3) Utilities +.2% Stocks Rising on Unusual Volume:SNDX, RRGB, JACK, CHRS, QIWI, CL, OMER, TGT, CYOU, WBMD, DKS, GOLD, MZOR, NVRO, TJX, AKAO, DVA, DISH, SBAC, PBYI, EXR and WWWStocks With Unusual Call Option Activity: 1) CL 2) WYN 3) DISH 4) JACK 5) KRE Stocks With Most Positive News Mentions: 1) WWW 2) RRGB 3) CLVS 4) TGT 5) TJX Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]