Stocks Falling Substantially into Final Hour on China Bubble-Bursting Fears, European/Emerging Markets/US High-Yield Debt Angst, Emerging Markets Currency Worries, Homebuilding/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 22.18 +21.64%

• Euro/Yen Carry Return Index 135.05 -1.16%

• Emerging Markets Currency Volatility(VXY) 11.65 +2.1%

• S&P 500 Implied Correlation 62.55 +6.0%

• ISE Sentiment Index 81.0 +8.0%

• Total Put/Call 1.09 +7.92%

• NYSE Arms 1.15 -9.75% 

Credit Investor Angst:

• North American Investment Grade CDS Index 91.19 +3.18%

• America Energy Sector High-Yield CDS Index 1,679.0 -.72%

• European Financial Sector CDS Index 79.63 +3.32%

• Western Europe Sovereign Debt CDS Index 16.42 +1.39%

• Asia Pacific Sovereign Debt CDS Index 75.18 +3.71%

• Emerging Market CDS Index 363.73 +1.45%
  

• iBoxx Offshore RMB China Corporate High Yield Index 123.87 +.06%

• 2-Year Swap Spread 12.25 +.25 basis point

• TED Spread 45.0 -1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -20.0 -1.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 68.60 -.88%
• 3-Month T-Bill Yield .16% unch.

• Yield Curve 121.0 -1.0 basis point

• China Import Iron Ore Spot $44.37/Metric Tonne +1.84%

• Citi US Economic Surprise Index -34.4 -2.6 points

• Citi Eurozone Economic Surprise Index 21.1 +5.7 points

• Citi Emerging Markets Economic Surprise Index 8.90 -4.0 points

• 10-Year TIPS Spread 1.58% unch.
• 49.7% chance of next Fed rate hike at March 16 meeting, 55.3% chance at April 27 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -305 open in Japan 
• China A50 Futures: Indicating -389 open in China

• DAX Futures: Indicating +9 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges and emerging market shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 25% Net Long