Bear Radar

Style Underperformer:

• Mid-Cap Value (-.35%)

Sector Underperformers:

• 1) Homebuilders -1.67% 2) Banks -.96% 3) Airlines -.90%

Stocks Falling on Unusual Volume:

• HBHC, ROVI, CROX, TSLA, PVD, MSB, MIM and KND
  

Stocks With Unusual Put Option Activity:

• 1) EXC 2) HES 3) CROX 4) GM 5) EOG
  

Stocks With Most Negative News Mentions:

• 1) EBAY 2) SIVB 3) PVTB 4) EWBC 5) PNY
  

Bull Radar

Style Outperformer:

• Large-Cap Value (+.04%)

Sector Outperformers:

• 1) Agriculture +.53% 2) Gold +.44% 3) Oil Tankers +.30%

Stocks Rising on Unusual Volume:

• CF, ANW, SNIC, VRGY, BBBY, AIXG, ITMN, VECO, TRGT, JAS, TOD, CHE, YPF, WTNY, OXM and HDY
  

Stocks With Unusual Call Option Activity:

• 1) AES 2) BBBY 3) KMX 4) GM 5) HOV
  

Stocks With Most Positive News Mentions:

• 1) RDC 2) NAT 3) STZ 4) WAG 5) CRR
  

Thursday Watch

Evening Recommendations
Citigroup:

• Reiterated Buy on (BBBY), target $59.
• Reiterated Sell on (WAG), target $33.

Night Trading

• Asian equity indices are -.25% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 103.0 -1.5 basis points.
  
• Asia Pacific Sovereign CDS Index 104.0 -1.25 basis points.
  
• S&P 500 futures +.07%
  
• NASDAQ 100 futures +.10%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PNY)/-.09

Economic Releases
8:30 am EST

• Durable Goods Orders for November are estimated to fall -.5% versus a -3.3% decline in October.
• Durables Ext Transports for November are estimated to rise +1.8% versus a -2.7% decline in October.
• Cap Goods Orders Non-defense Ex Air for November are estimated to rise +3.1% versus a -4.5% decline in October.
• Personal Income for November is estimated to rise +.2% versus a +.5% gain in October.
• Personal Spending for November is estimated to rise +.5% versus a +.4% gain in October.
• PCE Core for November is estimated to rise +.1% versus unch. in October.
• Initial Jobless Claims for last week are estimated at 420K versus 420K the prior week.
• Continuing Claims are estimated to fall to 4100K versus 4135K prior.
  

9:55 am EST

• Final Univ. of Mich. Consumer Confidence for December is estimated to rise to 74.5 versus a prior estimate of 74.2.
  

10:00 am EST

• New Home Sales for November are estimated to rise to 300K versus 283K in October.

Upcoming Splits

• (ABV) 5-for-1
  

Other Potential Market Movers

• The weekly EIA natural gas inventory report could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology 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 Rising Slightly Into Final Hour on Less Financial Sector Pessimism, Diminishing Economic Fear, Seasonal Strength, Technical Buying

Broad Market Tone:

• Advance/Decline Line: Slightly Higher
  
• Sector Performance: Most Sectors Rising
  
• Volume: Light
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 15.73 -4.61%
  
• ISE Sentiment Index 151.0 +9.42%
  
• Total Put/Call .90 +23.29%
  
• NYSE Arms 1.16 +96.93%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 84.94 -.37%
  
• European Financial Sector CDS Index 158.44 bps +3.80%
  
• Western Europe Sovereign Debt CDS Index 194.50 bps +1.04%
  
• Emerging Market CDS Index 176.28 bps -15.81%
  
• 2-Year Swap Spread 23.0 +2 bps
  
• TED Spread 17.0 -1 bps
  

Economic Gauges:

• 3-Month T-Bill Yield .13% +1 bp
  
• Yield Curve 273.0 +2 bps
  
• China Import Iron Ore Spot $171.0/Metric Tonne +.65%
  
• Citi US Economic Surprise Index +14.30 -3.3 points
  
• 10-Year TIPS Spread 2.31% +3 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +40 open in Japan
• DAX Futures: Indicating +26 open in Germany

Portfolio:

• Slightly Higher: On gains in my Medical and Retail long positions
  
• Disclosed Trades: None of note
  
• Market Exposure: 100% Net Long

BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades slightly higher despite recent stock gains, some earnings disappointments and rising eurozone sovereign debt angst. On the positive side, Defense, Disk Drive, Bank, Construction, Homebuilding and Education shares are especially strong, rising more than 1.0%. (IYR)/(XLF) have outperformed throughout the day again. The S&P GSCI Ag Spot Index is rising another +.5% and is very close to its record high set in Feb. 2008. Lumber is also rising +1.5%. The 10-year yield is stable again. On the negative side, Airline, Gaming and Steel shares are under mild pressure. The Greece sovereign cds is climbing +3.85% to 1,020.58 bps, the UK sovereign cds is climbing +4.86% to 72.41 bps and the Italy sovereign cds is rising +2.35% to 225.35 bps. The Euro Financial Sector CDS Index is rising to the highest level since mid-June and the Western Europe Sovereign CDS Index remains very near its record high set last month, which is also a big negative. The broad market continues to display exceptional resiliency as negatives continue to be ignored. The slow grind higher in the major averages to new 52-week highs could result in a short-term spike higher in stocks before any meaningful pullback commences as shorts throw in the towel and underperforming longs come in to finish out the year. A short-covering rally in the euro could be a potential short-term upside equity catalyst. I expect US stocks to trade mixed-to-higher into the close from current levels on seasonal strength, less economic fear, diminishing financial sector pessimism, short-covering, technical buying, buyout speculation and investment manager performance angst.

Bear Radar

Style Underperformer:

• Small-Cap Growth (-.17%)

Sector Underperformers:

• 1) Airlines -1.34% 2) Gaming -1.0% 3) Steel -.64%

Stocks Falling on Unusual Volume:

• HBHC, AGO, NKE, TBL, XXIA, FINL, QLIK, MOTR, CPY, BCH, LNN and CH
  

Stocks With Unusual Put Option Activity:

• 1) KRE 2) MNTA 3) NG 4) NKE 5) WAG
  

Stocks With Most Negative News Mentions:

• 1) KKD 2) BEN 3) HERO 4) VMED 5) SU
  

Bull Radar

Style Outperformer:

• Small-Cap Value (+.65%)

Sector Outperformers:

• 1) Banks +1.81% 2) Construction +1.02% 3) REITs +1.01%

Stocks Rising on Unusual Volume:

• WTNY, BXS, WAG, JPM, BAC, PRE, SU, CVS, AIG, CLMT, JBL, BTM, AIMC, PRGS, NXPI, ARMH, PRFT, CSGP, ASMI, INCY, AMRS, ITMN, PCLN, UBSI, EBIX, IBKC, PNFP, SIVB, OXM, IAT, WBS, JEC, KRE, AM and RDY
  

Stocks With Unusual Call Option Activity:

• 1) ODP 2) ARMH 3) CCE 4) XLNX 5) RHT
  

Stocks With Most Positive News Mentions:

• 1) BA 2) WAG 3) NKE 4) NOC 5) EME