Stocks Reversing Lower into Final Hour on China Bubble-Bursting Fears, Commodity Declines, US High-Yield Debt Angst, Homebuilding/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 24.36 +4.91%

• Euro/Yen Carry Return Index 141.87 -.64%

• Emerging Markets Currency Volatility(VXY) 12.66 -.16%

• S&P 500 Implied Correlation 65.31 +3.01%

• ISE Sentiment Index 81.0 -2.0%

• Total Put/Call .99 -17.5%

• NYSE Arms .99 +13.7% 

Credit Investor Angst:

• North American Investment Grade CDS Index 79.94 +.23%

• America Energy Sector High-Yield CDS Index 1,925.0 +1.07%

• European Financial Sector CDS Index 82.50 +.35%

• Western Europe Sovereign Debt CDS Index 21.97 +2.33%

• Asia Pacific Sovereign Debt CDS Index 86.43 +.34%

• Emerging Market CDS Index 354.51 +.04%
  

• iBoxx Offshore RMB China Corporates High Yield Index 118.21 +.30%

• 2-Year Swap Spread 13.5 -1.0 basis point

• TED Spread 31.25 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -25.25 -1.25 basis points

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 145.0 -3.0 basis points

• China Import Iron Ore Spot $58.1/Metric Tonne -1.54%

• Citi US Economic Surprise Index -20.3 +1.9 points

• Citi Eurozone Economic Surprise Index 24.5 -.1 point

• Citi Emerging Markets Economic Surprise Index -24.3 -1.5 points

• 10-Year TIPS Spread 1.56 -3.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 3.94 -.01

Overseas Futures:

• Nikkei 225 Futures: Indicating -11 open in Japan 
• China A50 Futures: Indicating -496 open in China

• DAX Futures: Indicating +15 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/retail/medical sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges 

• Market Exposure: Moved to 25% Net Long