Weekly Outlook

Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Calendar by TradeTheNews.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on tax hike worries, profit-taking, China bubble/trade concerns, increasing energy prices, rising long-term rates and more shorting. My intermediate-term trading indicators are giving mostly bullish signals and the Portfolio is 75% net long heading into the week.

Market Week in Review

S&P 500 1,178.10 +1.06%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,178.10 +1.06%
  
• DJIA 10,927.07 +.79%
  
• NASDAQ 2,402.58 +.22%
  
• Russell 2000 683.98 +.72%
  
• Wilshire 5000 12,124.40 +1.06%
  
• Russell 1000 Growth 524.13 +.85%
  
• Russell 1000 Value 607.34 +1.37%
  
• Morgan Stanley Consumer 712.82 +1.27%
  
• Morgan Stanley Cyclical 909.54 +1.18%
• Morgan Stanley Technology 600.07 -.29%
  
• Transports 4,392.48 +1.34%
  
• Utilities 383.02 +2.08%
  
• MSCI Emerging Markets 42.85 +4.15%
  
• Lyxor L/S Equity Long Bias Index 996.03 +.26%
  
• Lyxor L/S Equity Variable Bias Index 861.52 +1.0%
  
• Lyxor L/S Equity Short Bias Index 852.19 -1.85%
  

Sentiment/Internals

• NYSE Cumulative A/D Line +87,003 +2.35%
  
• Bloomberg New Highs-Lows Index +678 +449
  
• Bloomberg Crude Oil % Bulls 39.0 +44.4%
  
• CFTC Oil Net Speculative Position n/a
  
• CFTC Oil Total Open Interest n/a
  
• Total Put/Call .88 +3.53%
  
• OEX Put/Call 1.31 +11.97%
  
• ISE Sentiment 132.0 +17.86%
  
• NYSE Arms .49 -48.42%
  
• Volatility(VIX) 17.47 -5.05%
  
• G7 Currency Volatility (VXY) 11.12 -4.30%
  
• Smart Money Flow Index 9,556.45 -.48%
  
• Money Mkt Mutual Fund Assets $2.982 Trillion -1.0%
  
• AAII % Bulls 41.30 +27.51%
  
• AAII % Bears 31.16 -10.10%
  

Futures Spot Prices

• CRB Index 276.43 +3.20%
  
• Crude Oil 84.87 +5.88%
  
• Reformulated Gasoline 232.37 +5.05%
  
• Natural Gas 4.09 +1.39%
  
• Heating Oil 221.67 +6.80%
  
• Gold 1,126.10 +3.19%
  
• Bloomberg Base Metals 227.06 +7.79%
  
• Copper 358.40 +6.94%
  
• US No. 1 Heavy Melt Scrap Steel 351.67 USD/Ton +12.71%
• China Hot Rolled Domestic Steel Sheet 4,449 Yuan/Ton +1.48%
• S&P GSCI Agriculture 295.30 -1.27%
  

Economy

• ECRI Weekly Leading Economic Index n/a
  
• Citi US Economic Surprise Index +40.10 +3.8 points
  
• Fed Fund Futures imply 84.0% chance of no change, 16.0% chance of 25 basis point cut on 4/28
• US Dollar Index 81.26 -.56%
  
• Yield Curve 285.0 +5.0 basis points
  
• 10-Year US Treasury Yield 3.94% +9 basis points
  
• Federal Reserve's Balance Sheet $2.290 Trillion -.26%
  
• U.S. Sovereign Debt Credit Default Swap 38.50 +10.0%
  
• Western Europe Sovereign Debt Credit Default Swap Index 78.67 -4.75%
  
• 10-Year TIPS Spread 2.27% +3 basis points
  
• TED Spread 13.0 -2 basis points
  
• N. America Investment Grade Credit Default Swap Index 86.74 +.24%
  
• Euro Financial Sector Credit Default Swap Index 72.83 -.12%
  
• Emerging Markets Credit Default Swap Index 221.94 -5.01%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 258.0 -8.0 basis points
  
• M1 Money Supply $1.716 Trillion +.46%
• Business Loans 630.60 -.47%
  
• 4-Week Moving Average of Jobless Claims 447,300 -1.5%
  
• Continuing Claims Unemployment Rate 3.6% unch.
  
• Average 30-Year Mortgage Rate 5.08% +9 basis points
  
• Weekly Mortgage Applications 602.80 +1.31%
  
• ABC Consumer Confidence -45 -1 point
  
• Weekly Retail Sales +3.60% +20 basis points
  
• Nationwide Gas $2.81/gallon unch.
  
• U.S. Cooling Demand Next 7 Days 13.0% below normal
• Baltic Dry Index 2,991 -5.86%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 52.50 unch.
  
• Rail Freight Carloads 210,914 +4.78%
  
• Iraqi 2028 Government Bonds 80.97 -.22%
  

Best Performing Style

• Mid-Cap Value +1.73%

Worst Performing Style

• Small-Cap Growth +.50%

Leading Sectors

• Steel +7.77%
• Gold +7.66%
• Oil Service +6.98%
• Energy +4.53%
• Gaming +3.12%

Lagging Sectors

• REITs -1.45%
• Homebuilders -1.71%
• Education -1.78%
• Software -1.80%
• Disk Drives -2.25%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Higher into Final Hour on Less Economic Fear, Short-Covering, Declining Sovereign Debt Angst

Broad Market Tone:

• Advance/Decline Line: Slightly Lower
  
• Sector Performance: Most Rising
  
• Volume: Around Average
  
• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• VIX 17.99 +2.27%
  
• ISE Sentiment Index 138.0 +24.32%.
  
• Total Put/Call .88 +10.0%
  
• NYSE Arms .61 -51.96%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 86.74 bps -1.13%
  
• European Financial Sector CDS Index 73.70 bps -1.76%
  
• Western Europe Sovereign Debt CDS Index 78.67 bps -1.26%
  
• Emerging Market CDS Index 223.49 bps -3.41%
  
• 2-Year Swap Spread 16.0 bps -1.0 bp
  
• TED Spread 14.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .15% unch.
  
• Yield Curve 281.0 bps -1 bp
  
• China Import Iron Ore Spot $156.30/Metric Tonne +.84%
  
• Citi US Economic Surprise Index +40.10 +6.3 points
  
• 10-Year TIPS Spread 2.27% +1 bp
  

Overseas Futures:

• Nikkei Futures: Indicating +121 open in Japan
• DAX Futures: Indicating -16 open in Germany

Portfolio:

• Slightly Higher: On gains in my Financial, Biotech and Tech long positions
  
• Disclosed Trades: None
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish as stocks reversed sharply lower from morning highs, but the bears have thus far failed to gain meaningful downside traction. On the positive side, Steel, Oil Tanker, Gold, Oil Service stocks are especially strong, rising 2.0%+. The pullback in cds is a large positive. Cyclicals are outperforming, however the Transports aren't participating today. On the negative side, Wireless, Education, Software and Internet shares are falling .50%+ on the day. The AAII % Bulls surged to 41.3 this week, while the % Bears fell to 31.16, which is a negative. Oil continues to trade well and could become a huge equity market negative into the summer. The bears are once again failing to gain the upper hand despite mounting headwinds and the market's overbought technical condition. However, the broad market and some key stocks are beginning to trade a bit tired as much of the positive news is priced in around current levels. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and less economic fear.

Bear Radar

Style Underperformer:

• Large-Cap Growth (-.01%)

Sector Underperformers:

• Software (-1.24%), Education (-.79%) and Internet (-.71%)

Stocks Falling on Unusual Volume:

• UEPS, AMZN, HZO, HAWK, LAYN, SCHL, SHLM, RIMM, GIVN, BLUD, TSTC, CFSG, RADS, GLRE, RINO, DWA, DGIT, PWRD, GIFI, CAGC, PEET, VOLC, OPEN, NRP, KG and BLK
  

Stocks With Unusual Put Option Activity:

• 1) MU 2) SYMC 3) ATHR 4) RIMM 5) MOS
  

Bull Radar

Style Outperformer:

• Mid-Cap Value (+1.09%)

Sector Outperformers:

• Oil Tankers (+3.36%), Gold (+2.88%) and Steel (+2.81%)

Stocks Rising on Unusual Volume:

• CRK, IOC, SU, UBS, VMED, IMO, RDEA, SKIL, XRTX, LIHR, RYAAY, CTRP, AMAG, ATHR, SLXP, NTAP, CENX, AZZ, OCR and GPN
  

Stocks With Unusual Call Option Activity:

• 1) BPOP 2) MYL 3) SA 4) HRB 5) NTAP