Weekly Outlook

U.S. Equities Week Ahead by The Wall Street Journal.
Wall St. Week Ahead by Reuters.
Stocks to Watch Tuesday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on US tax hike concerns, financial sector pessimism, rising eurozone debt angst, global growth concerns, more shorting, technical selling and emerging market inflation fears. My intermediate-term trading indicators are giving mostly bearish signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,173.97 -.24%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,173.97 -.24%
  
• DJIA 11,240.20 -.39%
  
• NASDAQ 2,480.33 +.02%
  
• Russell 2000 683.36 -1.22%
  
• Wilshire 5000 12,179.60 -.26%
  
• Russell 1000 Growth 550.18 +.02%
  
• Russell 1000 Value 579.62 -.40%
  
• Morgan Stanley Consumer 702.67 +.71%
  
• Morgan Stanley Cyclical 835.62 -.24%
• Morgan Stanley Technology 566.50 +.08%
  
• Transports 4,446.32 -.33%
  
• Utilities 426.72 +.72%
  
• MSCI Emerging Markets 42.17 +4.38%
  
• Lyxor L/S Equity Long Bias Index 965.18 +1.18%
  
• Lyxor L/S Equity Variable Bias Index 860.95 unch.
  
• Lyxor L/S Equity Short Bias Index 644.79 -1.01%
  

Sentiment/Internals

• NYSE Cumulative A/D Line 122,487 +4.03%
  
• Bloomberg New Highs-Lows Index -104 +251
  
• Bloomberg Crude Oil % Bulls 33.33 +25.92%
  
• CFTC Oil Net Speculative Position 152,688 +11.99%
  
• CFTC Oil Total Open Interest 1,494,803 +2.02%
  
• Total Put/Call 1.44 +22.03%
  
• OEX Put/Call .94 -43.37%
  
• ISE Sentiment 72.0 -21.74%
  
• NYSE Arms 3.61 +568.61%
  
• Volatility(VIX) 33.92 -4.69%
• G7 Currency Volatility (VXY) 12.35 -2.38%
  
• Smart Money Flow Index 10,012.40 +1.39%
  
• Money Mkt Mutual Fund Assets $2.637 Trillion +.30%
  
• AAII % Bulls 38.62 +5.98%
  
• AAII % Bears 32.34 -21.04%

Futures Spot Prices

• CRB Index 338.06 +.84%
  
• Crude Oil 86.57 +1.33%
  
• Reformulated Gasoline 284.02 +1.95%
  
• Natural Gas 3.86 -1.86%
  
• Heating Oil 300.39 -.14%
  
• Gold 1,886.10 +2.89%
  
• Bloomberg Base Metals 243.50 +.76%
  
• Copper 411.50 -.17%
  
• US No. 1 Heavy Melt Scrap Steel 419.67 USD/Ton unch.
  
• China Hot Rolled Domestic Steel Sheet 4,837 Yuan/Ton unch.
  
• UBS-Bloomberg Agriculture 1,798.01 -.50%
  

Economy

• ECRI Weekly Leading Economic Index Growth Rate -4.30% -220 basis points
  
• S&P 500 EPS Estimates 1 Year Mean 96.38 unch.
  
• Citi US Economic Surprise Index -57.70 +10.1 points
  
• Fed Fund Futures imply 34.0% chance of no change, 66.0% chance of 25 basis point cut on 9/21
• US Dollar Index 74.70 +1.40%
  
• Yield Curve 179.0 -21 basis points
  
• 10-Year US Treasury Yield 1.99% -20 basis points
  
• Federal Reserve's Balance Sheet $2.837 Trillion -.20%
  
• U.S. Sovereign Debt Credit Default Swap 52.0 +8.42%
  
• Illinois Municipal Debt Credit Default Swap 242.0 -4.77%
  
• Western Europe Sovereign Debt Credit Default Swap Index 307.0 +1.3%
• Emerging Markets Sovereign Debt CDS Index 231.33 -5.19%
• Saudi Sovereign Debt Credit Default Swap 107.25 -2.54%
• Iraqi 2028 Government Bonds 89.14 -.05%
• China Blended Corporate Spread Index 613.0 -15 basis points
  
• 10-Year TIPS Spread 2.04% +2 basis points
  
• TED Spread 32.0 -1 basis point
• 3-Month Euribor/OIS Spread 71.0 +5 basis points
  
• N. America Investment Grade Credit Default Swap Index 122.0 -3.31%
  
• Euro Financial Sector Credit Default Swap Index 227.59 -3.94%
  
• Emerging Markets Credit Default Swap Index 281.99 -5.31%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 287.0 +6 basis points
  
• M1 Money Supply $2.106 Trillion +.96%
  
• Commercial Paper Outstanding 1,097.8B -1.7%
  
• 4-Week Moving Average of Jobless Claims 410,300 +.40%
  
• Continuing Claims Unemployment Rate 3.0% +10 basis points
  
• Average 30-Year Mortgage Rate 4.22% unch.
  
• Weekly Mortgage Applications 631.70 -9.64%
  
• Bloomberg Consumer Comfort -49.1 -2.1 points
  
• Weekly Retail Sales +4.20% -20 basis points
  
• Nationwide Gas $3.65/gallon +.06/gallon
  
• U.S. Cooling Demand Next 7 Days 5.0% above normal
• Baltic Dry Index 1,682 +6.32%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 unch.
  
• Rail Freight Carloads 236,051 -1.10%
  

Best Performing Style

• Mid-Cap Growth +.50%

Worst Performing Style

• Small-Cap Value -1.66%

Leading Sectors

• Homebuilders +4.18%
  
• Oil Tankers +3.94%
• Gold & Silver +3.17%
  
• Agriculture +2.53%
• Airlines +1.94%

Lagging Sectors

• I-Banks -2.20%
• Defense -2.39%
  
• Education -2.76%
• Banks -2.94%
  
• Alternative Energy -3.02%

Weekly High-Volume Stock Gainers (7)

• LQDT, Z, STMP, OXM, GIFI, SEE and FLDM
  

Weekly High-Volume Stock Losers (1)

• OVTI
  

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers
  

*5-Day Change

Stocks Falling Into Final Hour on U.S. Jobs Report, Rising Eurozone Debt Angst, Rising Financial Sector Pessimism, Emerging Markets Inflation Fears

Broad Market Tone:

• Advance/Decline Line: Substantially Lower
  
• Sector Performance: Almost Every Sector Declining
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 34.03 +6.98%
  
• ISE Sentiment Index 72.0 -12.2%
  
• Total Put/Call 1.48 +39.62%
  
• NYSE Arms 3.10 +40.96%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 122.0 +6.1%
  
• European Financial Sector CDS Index 234.09 +8.71%
  
• Western Europe Sovereign Debt CDS Index 307.0 +1.0%
  
• Emerging Market CDS Index 281.08 +5.32%
  
• 2-Year Swap Spread 31.0 unch.
  
• TED Spread 32.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .02% +1 bp[
  
• Yield Curve 180.0 -16 bps
  
• China Import Iron Ore Spot $180.80/Metric Tonne +.22%
  
• Citi US Economic Surprise Index -57.70 -9.6 points
  
• 10-Year TIPS Spread 2.04% unch.
  

Overseas Futures:

• Nikkei Futures: Indicating -151 open in Japan
• DAX Futures: Indicating -36 open in Germany

Portfolio:

• Slightly Lower: On losses in my Retail, Tech and Biotech sector longs
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
  
• Market Exposure: 50% Net Long

BOTTOM LINE: Today's overall market action is very bearish, as the S&P 500 trades meaningfully lower to session lows on rising Eurozone debt angst, more financial sector pessimism, poor US economic data, more shorting, profit-taking, emerging markets inflation fears, global growth worries and technical selling. On the positive side, Telecom shares are holding up relatively well, falling less than -1.0%. Oil is down -2.6% and Lumber is gaining +1.82%. On the negative side, Defense, Alt Energy, Oil Service, Steel, Computer, Disk Drive, Networking, Bank, I-Banking, Hospital, Construction, Homebuilding, Gaming, Education and Road & Rail shares are under meaningful pressure, falling more than -3.5%. Small-caps and cyclicals are substantially underperforming again. (XLF) has traded very poorly throughout the day. The 10-year yield is falling too much again, declining -13 bps to 2.0%. Gold is rising +2.9%, the UBS-Bloomberg Ag Spot Index is up +.52% and Copper is down -1.02%. Rice is making another new multi-year high today, gaining -1.45%, and has risen +36.0% in about 8 weeks. The average US price for a gallon of gas is +.02/gallon today to $3.65/gallon. It is up .51/gallon in about 7 months. The China sovereign cds is gaining +3.9% to 113.60 bps, the Russia sovereign cds is gaining +3.54% to 193.67 bps, the Brazil sovereign cds is jumping +7.28% to 153.08 bps, the Greece sovereign cds is gaining +2.12% to 2,340.13 bps, the Germany sovereign cds is rising +2.7% to 78.04 bps, the France sovereign cds is rising +4.56% to 170.84 bps, the Spain sovereign cds is gaining +4.14% to 391.19 bps, the Italy sovereign cds is jumping +3.18% to 396.51 bps and the Portugal sovereign cds is gaining +1.93% to 975.37 bps, the Belgium sovereign cds is rising 2.84% to 256.26 bps. Moreover, the European Investment Grade CDS Index is rising +5.88% to 146.65 bps. The Italy sovereign cds is making a new closing record high today. The Eurozone Financial Sector CDS Index is back near its all-time high. The Citi Eurozone Economic Surprise Index has plunged -108.4 points in about 3 weeks to -102.30. The UBS-Bloomberg Ag Spot Index is still near its recent record high, gaining today despite equity losses. The ongoing breakdown in the yield curve, to March 09 levels, is also a large negative. The Shanghai Composite continues to trade poorly, falling another -1.1% overnight, and is down -3.21% for the week and -9.96% ytd. Ukraine shares plunged another -6.97% today and are now down -33.43% ytd. Germany's DAX also continues to trade very poorly as it fell another -3.4% today and is now down -19.9% ytd. As well, the euro currency remains heavy. Gauges of eurozone debt angst are back near their recent highs overall, which is a large concern. Today's sharp equity decline was a bit too orderly and several key gauges of investor angst were relatively subdued. A full test of the recent lows is an increasing possibility over the coming weeks. I expect US stocks to trade mixed-to-lower into the close from current levels on rising Eurozone debt angst, rising financial sector pessimism, global growth worries, emerging markets inflation fears, more shorting, profit-taking and technical selling.

Bear Radar

Style Underperformer:

• Small-Cap Value (-3.51%)

Sector Underperformers:

• 1) Banks -4.62% 2) Steel -4.60% 3) Homebuilders -4.31%

Stocks Falling on Unusual Volume:

• DB, LQDT, CIEN, RAIL, WPPGY, KAMN, CHFC, NFLX, SCVL, CPLA, CVV, FSLR, ECOL, PERY, ICFI, GGAL, FSTER, CTCM, PSMT, PRGO, CSGS, RPM, HRB and ESL
  

Stocks With Unusual Put Option Activity:

• 1) SVM 2) GNK 3) ALU 4) XLY 5) MON
  

Stocks With Most Negative News Mentions:

• 1) XLF 2) KBE 3) BHI 4) PBR 5) AIG
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Small-Cap Growth (-1.70%)

Sector Outperformers:

• 1) Gold & Silver +1.29% 2) Telecom -.51% 3) Airlines -.50%

Stocks Rising on Unusual Volume:

• NG, EXK, FNSR, REGN, PAAS and GOLD
  

Stocks With Unusual Call Option Activity:

• 1) SYMC 2) SPLS 3) HCA 4) FNSR 5) ABC
  

Stocks With Most Positive News Mentions:

• 1) LQDT 2) BCSI 3) EDMC 4) ODFL 5) SCCO
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume