Bull Radar

Style Outperformer:

• Small-Cap Growth +.16%

Sector Outperformers:

• 1) Homebuilders +1.68% 2) Biotech +.80% 3) Internet +.71%

Stocks Rising on Unusual Volume:

• TEO, FIO, VMED, IOC, ZNGA, OSIR, BVSN, MLNX, CERN, YNDX, ALGN, GRPN, FSLR, QCOR, EBAY, SFD and TFM
  

Stocks With Unusual Call Option Activity:

• 1) EWG 2) AUXL 3) CCJ 4) ONXX 5) RDN
  

Stocks With Most Positive News Mentions:

• 1) PETM 2) GRPN 3) GD 4) CMG 5) ELT
  

Charts:

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

Monday Watch

Weekend Headlines
Bloomberg:

• Greece Races as Cash Dwindles With Europe Seeking Return to Cuts. Greece’s two traditional political rivals are in a race to forge an unprecedented coalition as the state’s cash dwindles, bank deposits flee and Europe demands renewed austerity pledges before releasing more emergency aid. Greece will run out of money in mid-July, the Syriza party, which placed second in yesterday’s election, said on June 13 after being briefed by Acting Finance Minister Giorgios Zanias. Caretaker Labor and Social Security Minister Antonis Roupakiotis refused to offer assurances pensions will be paid in August, Athens News Agency reported the same day. “There’s no time to lose or leeway for small party games,” Antonis Samaras, leader of New Democracy, said in Athens yesterday after placing first in a rerun vote that will force him to rule with the third-place socialist Pasok party. “The country must be governed.”
• Greece Still Has No Crisis Plan After Vote, Germany’s Bild Says. Greece’s parliamentary election doesn’t ease the euro area’s crisis because voters failed to give clear support to the shared currency, Bild, Germany’s most- read newspaper, said in an editorial. “Far too many Greeks voted for the leftist party that is taking them for a ride,” Bild said, referring to Syriza, which rejects the terms of Greece’s bailout. “In truth, Greece is a developing country. It has no economic basis, no administration worthy of the name and still no plan for changing that.” “Nobody can draw any clear conclusions from a slim majority, neither in Athens nor in the rest of Europe,” Bild said in an e-mailed editorial for tomorrow’s edition. Greece’s election “split and paralyzed the country and doesn’t help the euro out of the crisis.”
• Hollande Bolstered as Socialists Win French Parliament Control. French President Francois Hollande’s Socialist Party and its allies won an absolute majority in the National Assembly, exit polls showed, paving the way for them to pass legislation without the aid of other members of parliament. The Socialist bloc won 314 out of the 577 seats, pollster CSA said, with 289 needed for a majority. Former President Nicolas Sarkozy’s Union for a Popular Movement party and its allies have 228 seats, CSA said, and the anti-euro National Front won two seats. Turnout in the second and decisive round of legislative elections yesterday was 56 percent. The victory gives the Socialists control of practically every political institution in France -- the presidency, the upper and lower houses of parliament, all but two of the regions and most of the country’s big cities, communes and departments - - a first in the Fifth Republic. Control of the lower house of parliament will allow Hollande to push through the tough decisions needed amid Europe’s debt crisis. With growth stalling at home, Hollande now faces the task of telling the French people that the state’s depleted coffers may mean cuts in spending and higher taxes as he makes good on his deficit-cutting promises. “The result means that President Hollande and his government have free reins to continue to govern,” said Thomas Costerg, an economist at Standard Chartered Bank in London. “With domestic politics now out of the way, investors’ focus will probably turn to the domestic economy, which has shown recently worrying signs of deterioration, and to the Franco- German relationship, which has yet to reach cruise speed.”
• Spanish Yields Suggest Bond Investors Slamming Door: Euro Credit. Investors who oversee more than $3.2 trillion expect Spain to become the fourth euro member to need external funding as borrowing costs surge to levels too punitive for the nation to finance its needs on the capital markets. Spanish debt slumped last week, pushing the 10-year yields to 7%, as investors at Fidelity Investments, Frankfurt Trust and Principal Investment Management said the nation may lose market access. "Yields are at levels at which Spain can't really afford to finance itself for more than a few months," said Craig Veysey, head of fixed income at Principal Investment Management in London, part of Sanlam Group, which manages $72 billion.
  
• Spain Needs Liquidity Injection From ECB, Minister Tells ABC. Spanish Deputy Minister for European Affairs Inigo Mendez de Vigo said countries including Spain need a liquidity injection from the European Central Bank, according to an interview in ABC. The government’s last overhaul of the banking industry, which increased provisions for losses, may not have been sufficient as some banks weren’t able to make those provisions, Mendez de Vigo told the newspaper.
• Europe Gets Emerging Market Crisis Ultimatum as G-20 Meet. European leaders are facing pressure at the Group of 20 summit in Mexico to halt market uncertainty and stamp out the debt crisis as global partners hint at help to keep the world economy afloat. As elections in Greece reduced the immediate risk of the euro area’s breakup, China and Indonesia signaled growing exasperation with more than two years of European crisis- fighting that has failed to stem the threat of global contagion. World Bank President Robert Zoellick said that policy makers bungled their attempt to rescue Spain’s banks. “I hope that one way or another our European colleagues will reach an agreement on rigorous methods to manage the crisis,” Indonesian President Susilo Bambang Yudhoyono, who heads Southeast Asia’s biggest economy, said in a speech in the Mexican resort of Los Cabos yesterday. “The absence of such methods will have unsettling consequences to all of us.” The two-day G-20 summit starting today kicks off a week of crisis meetings taking place after Spain this month became the fourth euro-region nation to seek a bailout amid the weakest global economy since the 2009 recession.
• Ireland May Need to Write Down Debt for Recovery, Reinhart Says. Ireland and other “advanced economies” may have to write down billions of euros in personal and corporate debt before economic growth can return, Carmen Reinhart said in an interview with the Sunday Business Post. “To restore solvency and the confidence that you can grow again, you need to deal with the debt overhang,” Reinhart, a senior fellow at the Peterson Institute for International Economics in Washington, told the Dublin-based newspaper.
• China Abandons Role of Global Engine as Wen Tempers Stimulus. Premier Wen Jiabao has an unspoken message to his Group of 20 counterparts in Mexico today: This time, don’t count on a growth bailout from China. In the depths of the 2008 credit crunch, Wen’s 4 trillion yuan ($586 billion) fiscal injection over two years and 17.6 trillion yuan credit surge helped prop up the global economy. In China, it fueled a property bubble, stoked inflation and amassed bad debts that Fitch Ratings says weakened the banking system. “The government is trying to strike a better balance between stabilizing growth in the short term and adjusting structure in the long term,” said Peng Wensheng, chief economist in Beijing at China International Capital Corp., who worked at the International Monetary Fund and Hong Kong’s central bank. Total stimulus this year may be less than one- third the size of the 5.4 trillion yuan fiscal and monetary firepower of 2009, Peng said. Investment is more strategically focused than the efforts that year that helped cushion everyone from Australian iron-ore exporters to General Motors Co., which saw its Chinese sales soar 67 percent as it coped with bankruptcy at home. Of some 818 billion yuan in projects recently approved, 55 percent were for clean energy or subsidies for fuel-efficient cars, according to Australia and New Zealand Banking Group Ltd.
• China Home Prices Fall in More Than Half Cities Tracked. China’s home prices fell in a record 54 of 70 cities tracked by the government in May as developers cut prices to boost sales amid housing curbs. The eastern city of Wenzhou led declines with a 14 percent slump in values from a year earlier, while Beijing and Shanghai recorded losses of as much as 1.6 percent, according to data released by the statistics bureau today. China has pledged to maintain its curbs on the housing market even as economic growth is slowing, prompting the central bank to cut borrowing costs for the first time since 2008 on June 7. The Housing Ministry said this month that China will steadfastly continue with its property curbs that have so far included higher down payments and restrictions on the number of homes being bought.
• Fed Seen Twisting to Risk Management to Spur U.S. Growth. Federal Reserve officials must choose this week between their best estimates and their worst fears of what will happen to the U.S. economy. Policy makers will bring new forecasts to their June 19-20 meeting and probably will mark down their April central-tendency estimate for growth of 2.4 percent to 2.9 percent this year. Lurking in the background is the risk of increasing financial stress in Europe and stubbornly high U.S. unemployment that has remained above 8 percent for 40 consecutive months. All this could prompt them to move away from their outlook for moderate growth and tilt toward a “risk-management” strategy pioneered by former Fed Chairman Alan Greenspan, which puts more emphasis on tracking and containing high-cost threats. Both Janet Yellen, the Fed’s vice chairman, and William C. Dudley, head of the Federal Reserve Bank of New York, used the phrase in the past month.
• Third Fed Stimulus Won’t Be Better Than QE2, Romney Says. Presidential candidate Mitt Romney said the Federal Reserve’s attempts at stimulating the U.S. economy “did not have the desired effect” and a new round of quantitative easing by the central bank wouldn’t fare better. The second round of quantitative easing, a series of bond purchases referred to as QE2, “was not extraordinarily harmful, but it does put in question the future value of the dollar and it will obviously encourage some inflation,” Romney said in an interview that aired today on CBS’s “Face the Nation” program. “A QE3 would do the same thing.”

Dow Jones:

• Indonesia's exports could slow further unless the crisis in Europe is resolved quickly, the country's Trade Minister Gita Wirjawan said.

Wall Street Journal:

• Saudis Bury Crown Prince in Mecca. Attention Turns to Succession Plans; Prince Salman Is Expected to Be Named New Crown Prince. The surviving sons of King Abdulaziz gathered in the holy city of Mecca to bury the second heir to the throne within eight months, moving the succession process closer to a new generation in a family determined to maintain stability as the Middle East is gripped by political change.
• Homeowner Aid Boosts Big Banks. A government program that helps struggling homeowners take advantage of low interest rates to cut monthly mortgage payments is providing an unexpected revenue boost to large banks such as Wells Fargo(WFC) and J.P. Morgan Chase(JPM).
• Bombings Target Churches in Nigeria. Three suicide bomb attacks on churches rocked a northern Nigerian state Sunday, killing at least 21 people and wounding about 100, officials said, prompting protests in a state that has previously been strained by religious tensions.
• A Greek Reprieve. The Germans might have preferred a victory by the left in Athens. The tragedy of Greece, and much of the rest of Europe, is that it overborrowed during the euro's first decade to finance a higher standard of living than it could afford. Now the debtors have to adjust. The best way to do so is with supply-side reforms in taxes, pensions and labor markets that will lure investment and make Europe's economies more competitive. They need austerity for government but growth for the private economy. Without that, the Greek reprieve will be merely another opportunity lost.

Fox News:

• Iran: About 20 arrested for nuclear scientist hits. Iran says about 20 suspects have been arrested for alleged links to assassinations of Iranian nuclear experts that Tehran claims is part of covert operations led by Israel. Sunday's remark by Intelligence Minister Heidar Moslehi is the first official number on the detentions. Last week, Iran announced it had made arrests linked to the slayings.

Business Insider:

• The Head Of Greece's Neo-Nazi Party Is The Only One Really Happy About Tonight's Outcome.
• 4 Reasons Why China Is Headed For Meltdown.
• Check Out These Awesome Photos Of What Apple's Next iPhone Could Look Like.
• Europe Will Splinter No Matter What Happens In Greece; 'France Has At Most Three Months' Says German Official.

Zero Hedge:

• SocGen's Take On The Greek Elections And What Happens Next.
• And Now... Let's Play Chicken.
• Pasok Throws A Monkey Wrench Into Coalition Discussions.

CNBC:

• Muslim Brotherhood Declares Victory in Egypt Election. Egypt's Muslim Brotherhood declared on Monday that its candidate Mohamed Morsy won the country's first free presidential race, beating Hosni Mubarak's last prime minister and ending six decades of rule by presidents plucked from the military. But shortly before the final result the generals who have run the country since the overthrow of Mubarak issued new rules that made clear real power remains with the army. "Mohamed Morsy is the first popularly elected civilian president of Egypt," the official website of Brotherhood's Freedom and Justice Party announced in a brief message.
• Are Speculators 'Attacking' Spain and Italy? It may be hard to tell, but a subtle shift is going on behind the scenes in Europe. Both German Chancellor Angela Merkel and French President Francois Hollande have denounced “speculators” who are “unjustly attacking” Italy and Spain.

Wall Street All-Stars:

• Indicator Update: Can the Fed Meet Market Expectations?
  

IBD:

• 55,000 Containers Give J.B. Hunt Transport An Edge.

LA Times:

• Some Southern California 'nonprofit' Pot Shots Make Big Money. Documents show a cash-infused retail world bearing little resemblance to the one pitched to voters for the 1996 Compassionate Use Act for 'seriously ill Californians.'

NY Times:

• Russia Sending Missile Systems to Shield Syria. Russia’s chief arms exporter said Friday that his company was shipping advanced defensive missile systems to Syria that could be used to shoot down airplanes or sink ships if the United States or other nations try to intervene to halt the country’s spiral of violence. “I would like to say these mechanisms are really a good means of defense, a reliable defense against attacks from the air or sea,” Anatoly P. Isaykin, the general director of the company, Rosoboronexport, said Friday in an interview. “This is not a threat, but whoever is planning an attack should think about this.”

NY Post:

• Morgan’s big secret. The coming muni-bond crisis. While the Senate Banking Committee last week spun its wheels trying to get JP Morgan chief Jamie Dimon to admit to something nefarious during testimony about his “London Whale” trading loss, executives at the big bank were concealing a far bigger scandal. OK, it’s no secret that nation’s public pension funds are in big trouble, holding large “unfunded” liabilities owed to public workers once they retire. But most politicians (New Jersey Gov. Chris Christie is an exception) will tell you the problem is fairly containable, that there are simple fixes — such as raising taxes on the rich or pruning benefits. Not so, warns a “strictly confidential” report JP Morgan issued last year. It describes in straightforward, frightening detail how underfunded pensions are huge ticking timebombs for many of the nation’s big cities and states. The scandal isn’t simply that most public officials are misleading the public about the enormity of the problem and what steps must be taken to address the matter. As the Morgan report notes, many of the real liabilities are located “off balance sheet,” hidden from the public’s eye, and lax accounting standards let cities and states minimize their enormity. It’s also that JP Morgan itself kept the report’s findings a secret except for a few big clients, mostly hedge funds and large institutional investors, who got the inside tip on which states and cities are most likely to default on their debt as their pension liabilities fester. Yes: Default is a very real possibility, because the solutions are far from easy.

Reuters:

• India likely to cut rates despite high inflation. India's central bank is expected to cut interest rates on Monday in a bid to breathe fresh life into a sputtering economy even as inflation remains uncomfortably high.

The Telegraph:

• Business is starting to get tired of Europe. It was an article of faith not often tested that businesses liked the European Union.
• Greece will have to leave EMU whoever is elected. The exact circumstances and timing of Greece’s ejection from monetary union no longer have any systemic importance for global finance. The damage has already been done. The precedent of EMU break-up is by now priced into the credit markets. Formalising it changes little.
• Greek election: Live. German Chancellor Angela Merkel holds a conference call with Antonis Samaras following his Greek election victory and says that she is confident the country would now abide by its bailout pledges.

Efe:

• Spanish Prime Minister Mariano Rajoy has ruled out for now increased value-added tax and cutting wages of public workers as suggested by the IMF, citing comments he made to reporters following a People's Party meeting in the northern city of San Sebastian.
  

China Securities Jounral:

• China should introduce new measures to curb real-estate speculation "appropriately and prudently," according to a commentary on the front page of the China Securities Journal today. Some cities are loosening government restrictions on home purchases, according to the commentary, written by a reporter at the newspaper named Zhang Min. Real-estate speculation will hurt "reasonable" home demand and push up housing prices again, according to the commentary.

Weekend Recommendations
Barron's:

• Made positive comments on (SMG), (XOM), (COP), (CVX) and (NBR).
• Made negative comments on (NAV).
  

Night Trading

• Asian indices are +.75% to +1.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 180.5 -2.5 basis points.
• Asia Pacific Sovereign CDS Index 147.50 -3.0 basis points.
• FTSE-100 futures +.71%.
  
• S&P 500 futures +.37%.
• NASDAQ 100 futures +.45%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (IHS)/.94

Economic Releases
10:00 am EST

• The NAHB Housing Market Index for June is estimated to fall to 28 versus 29 in May.

Upcoming Splits

• (DORM) 2-for-1
• (BTH) 2-for-1
• (ABCO) 2-for-1
  

Other Potential Market Movers

• The Greek election outcome, G-20 Leaders Summit, India rate decision, Jefferies Consumer Conference, Goldman Sachs Chemicals Conference, (MSFT) announcement, (DHR) Analyst Meeting and the (TGP) investor day could also impact trading today.
  

BOTTOM LINE: Asian indices are higher, boosted by commodity and technology shares in the region. I expect US stocks to open higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the week.

Weekly Outlook

U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as rising global growth fears, Eurozone debt angst and technical selling offsets global central banks stimulus hopes, lower energy prices and bargain-hunting. 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 1,342.84 +1.3%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,342.84 +1.3%
  
• DJIA 12,767.10 +1.7%
  
• NASDAQ 2,872.80 +.5%
  
• Russell 2000 771.32 +.28%
  
• Value Line Geometric(broad market) 336.26 -.02%
  
• Russell 1000 Growth 627.70 +.66%
  
• Russell 1000 Value 658.90 +1.50%
  
• Morgan Stanley Consumer 786.71 +1.22%
  
• Morgan Stanley Cyclical 907.65 -.03%
• Morgan Stanley Technology 634.42 +.11%
  
• Transports 5,091.24 +.58%
  
• Utilities 483.05 +.96%
• Bloomberg European Bank/Financial Services 71.81 +2.13%
  
• MSCI Emerging Markets 38.61 +1.99%
  
• Lyxor L/S Equity Long Bias 992.97 +1.28%
  
• Lyxor L/S Equity Variable Bias 800.02 +.10%
  
• Lyxor L/S Equity Short Bias 539.27 unch.
  

Sentiment/Internals

• NYSE Cumulative A/D Line 140,250 +.7%
  
• Bloomberg New Highs-Lows Index -202 -156
  
• Bloomberg Crude Oil % Bulls 38.0 +5.6%
  
• CFTC Oil Net Speculative Position 130,858 -10.88%
  
• CFTC Oil Total Open Interest 1,458,395 +.12%
  
• Total Put/Call 1.0 +5.26%
  
• OEX Put/Call .94 -23.58%
  
• ISE Sentiment 118.0 -11.28%
  
• NYSE Arms .58 -38.95%
  
• Volatility(VIX) 21.11 -.57%
• S&P 500 Implied Correlation 70.32 +2.73%
  
• G7 Currency Volatility (VXY) 10.97 -1.26%
  
• Smart Money Flow Index 11,071.23 +1.33%
  
• Money Mkt Mutual Fund Assets $2.554 Trillion -.4%
  
• AAII % Bulls 34.04 +24.0%
  
• AAII % Bears 35.79 -21.8%

Futures Spot Prices

• CRB Index 272.23 -.24%
  
• Crude Oil 84.03 -.36%
  
• Reformulated Gasoline 270.17 +34%
  
• Natural Gas 2.47 +7.03%
  
• Heating Oil 264.65 -1.22%
  
• Gold 1,628.10 +2.07%
  
• Bloomberg Base Metals Index 198.38 +1.92%
  
• Copper 339.05 +1.97%
  
• US No. 1 Heavy Melt Scrap Steel 399.0 USD/Ton unch.
  
• China Iron Ore Spot 135.0 USD/Ton +2.74%
  
• Lumber 268.10 -5.57%
  
• UBS-Bloomberg Agriculture 1,406.83 -2.35%
  

Economy

• ECRI Weekly Leading Economic Index Growth Rate -3.0% -100 basis points
  
• Philly Fed ADS Real-Time Business Conditions Index -.2160 +4.51%
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 111.09 +.14%
  
• Citi US Economic Surprise Index -60.60 -10.5 points
  
• Fed Fund Futures imply 66.0% chance of no change, 34.0% chance of 25 basis point cut on 6/20
  
• US Dollar Index 81.63 -.98%
  
• Yield Curve 130.0 -7 basis points
  
• 10-Year US Treasury Yield 1.58% -6 basis points
  
• Federal Reserve's Balance Sheet $2.852 Trillion +.61%
  
• U.S. Sovereign Debt Credit Default Swap 48.40 +1.90%
  
• Illinois Municipal Debt Credit Default Swap 228.0 -4.22%
  
• Western Europe Sovereign Debt Credit Default Swap Index 316.11 -1.68%
  
• Emerging Markets Sovereign Debt CDS Index 306.75 -6.19%
  
• Saudi Sovereign Debt Credit Default Swap 130.35 -.97%
• Iraq Sovereign Debt Credit Default Swap 449.99 -3.94%
  
• China Blended Corporate Spread Index 560.0 -19 basis points
  
• 10-Year TIPS Spread 2.12% -2 basis points
  
• TED Spread 38.25 -1.0 basis point
  
• 2-Year Swap Spread 27.75 -3.5 basis points
  
• 3-Month EUR/USD Cross-Currency Basis Swap -50.25 +1.5 basis points
  
• N. America Investment Grade Credit Default Swap Index 119.61 -2.43%
  
• Euro Financial Sector Credit Default Swap Index 279.01 -.28%
  
• Emerging Markets Credit Default Swap Index 286.07 -5.98%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 204.0 unch.
  
• M1 Money Supply $2.243 Trillion +.38%
  
• Commercial Paper Outstanding 1,007.1 -.70%
  
• 4-Week Moving Average of Jobless Claims 382,000 +4,200
  
• Continuing Claims Unemployment Rate 2.6% unch.
  
• Average 30-Year Mortgage Rate 3.71% +4 basis points
  
• Weekly Mortgage Applications 949.40 +17.97%
  
• Bloomberg Consumer Comfort -36.4 +1.2 points
  
• Weekly Retail Sales +2.5% -60 basis points
  
• Nationwide Gas $3.52/gallon -.04/gallon
  
• U.S. Cooling Demand Next 7 Days 14.0% above normal
• Baltic Dry Index 924.0 +5.36%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 -7.69%
  
• Rail Freight Carloads 246,422 +15.2%
  

Best Performing Style

• Large-Cap Value +1.50%
  

Worst Performing Style

• Mid-Cap Value +.10%

Leading Sectors

• Road & Rail +3.76%
  
• Tobacco +3.58%
• Banks +2.54%
• Telecom +2.46%
• Alternative Energy +2.45%

Lagging Sectors

• Computer Hardware -1.13%
• Coal -1.86%
  
• HMOs -2.67%
• Oil Tankers -3.76%
• Education -5.02%

Weekly High-Volume Stock Gainers (6)

• FLDM, QSFT, PRGS, SKX, NAV and LMNX
  

Weekly High-Volume Stock Losers (9)

• CTCT, TFM, HAR, AEGR, SMG, STJ, CASY, FDS and CNC
  

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers
  

*5-Day Change

Stocks Rising into Final Hour on Global Central Bank Stimulus Hopes, Short-Covering, Euro Bounce, Tech/Financial Sector Strength

Broad Market Tone:

• Advance/Decline Line: Higher
  
• Sector Performance: Most Sectors Rising
  
• Volume: Below Average
  
• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• VIX 22.14 +2.17%
  
• ISE Sentiment Index 117.0 -18.75%
  
• Total Put/Call 1.04 +.97%
  
• NYSE Arms .58 -2.12%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 118.27 -1.84%
  
• European Financial Sector CDS Index 278.94 -2.46%
  
• Western Europe Sovereign Debt CDS Index 317.37 -1.49%
  
• Emerging Market CDS Index 286.37 -.36%
  
• 2-Year Swap Spread 27.75 -2.25 basis points
  
• TED Spread 38.25 +1.25 basis points
  
• 3-Month EUR/USD Cross-Currency Basis Swap -50.25 +3.75 basis point
  

Economic Gauges:

• 3-Month T-Bill Yield .09% -1 basis point
  
• Yield Curve 131.0 -2 basis points
  
• China Import Iron Ore Spot $135.0/Metric Tonne +.22%
  
• Citi US Economic Surprise Index -60.60 -6.1 points
  
• 10-Year TIPS Spread 2.13 +3 basis points
  

Overseas Futures:

• Nikkei Futures: Indicating a +59 open in Japan
• DAX Futures: Indicating +15 open in Germany
  

Portfolio:

• Higher: On gains in my tech, medial, retail and biotech sector longs
  
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short, then added them back
  
• Market Exposure: 50% Net Long

BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades near session highs despite Eurozone debt angst, more disappointing US economic data and rising global growth fears. On the positive side, Coal, Alt Energy, Steel, Software, Disk Drives, Oil Service and Computer Service shares are especially strong, rising more than +1.25%. Small-cap and cycilcal shares have outperformed throughout the day. As well, tech and financial shares have been relatively strong. Oil is falling -.25% and Copper is gaining +1.5%. Major Asian indices were mostly higher, led by a +2.3% gain in Hong Kong. Major European indices are mostly higher, boosted by a +2.2% gain in Italian shares. The Bloomberg European Bank/Financial Services Index is rising +1.5%. The Germany sovereign cds is down -2.1% to 103.83 bps, the France sovereign cds is down -1.5% to 197.35 bps and the Italy sovereign cds is down -1.04% to 544.0 bps. Moreover, the European Investment Grade CDS is falling -3.2% to 174.83 bps. On the negative side, Oil Tanker, Gaming, Airline, REIT and Construction shares are lower-to-flat on the day. Lumber is falling -.85% and Gold is gaining +.12%. The Japan sovereign cds is gaining +1.3% to 91.47 bps and the Saudi sovereign cds is rising .8% to 130.35 bps. Weekly retail sales have decelerated to a sluggish rate. US Rail Traffic continues to soften. The Philly Fed ADS Real-Time Business Conditions Index continues to trend lower from its late-December peak. Moreover, the Citi US Economic Surprise Index has fallen back to late-Aug. levels. Lumber is -7.0% since its Dec. 29th high despite improving sentiment towards homebuilders and the broad equity rally ytd. Moreover, the weekly MBA Home Purchase Applications Index has been around the same level since May 2010 despite expectations for a strong spring home selling season. The Baltic Dry Index has plunged around -60.0% from its Oct. 14th high and is now down around -50.0% ytd. China Iron Ore Spot has plunged -25.0% since Sept. 7th of last year. Shanghai Copper Inventories have risen +153.0% ytd. The CRB Commodities Index is now technically in a bear market, having declined -26.0% since May 2nd of last year. Overall, recent credit gauge deterioration remains a big worry as most key sovereign cds remain technically strong. The euro currency continues to trade poorly despite today's bounce higher. Oil, lumber and copper also trade poorly given global central bank stimulus hopes and recent stock gains. As well, the 10Y continues to trade too well as the yield fell another -6 bps to 1.58% today. I still believe the level of complacency among US investors regarding the rapidly deteriorating situation in Europe is fairly high. Some key economies in the region are likely accelerating their contractions right now. As well, the European debt crisis is really beginning to bite emerging market economies now, which will also further pressure exports from the region and further raise the odds of more sovereign/bank downgrades. As well, the "US fiscal cliff "will become more and more of a focus for investors as the year progresses. The upcoming earnings season could proving more challenging than usual for big multi-nationals given US dollar strength and the precipitous declines in some key parts of the global economy during the quarter. Global central bank stimulus hopes have been propping up stocks, but I still believe there is too much uncertainty on the horizon to conclude a durable stock market low is in place. The backdrop for equities ahead of the Greek election is not ideal. The market has worked off its technically oversold state and some gauges of investor sentiment are registering a significant increase in bullishness. I also suspect a fair amount of short-covering has occurred over the last 10 days. Moreover, some well-known pundits are warning of how scared the bears should be, which is also a bit concerning. I suspect the market will trade higher early next week, however any rally may prove short-lived as investors turn their focus away from central bank stimulus hopes and towards Spain/Italy, deteriorating economic data and the US fiscal cliff. The “solutions” for the European debt crisis I still hear being bandied about are only bigger kick-the-cans that will eventually lead to an even bigger catastrophe as Germany is engulfed, in my opinion. For this year's equity advance to regain traction, I would expect to see a resumption in European credit gauge improvement, a subsiding of hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices, a US "fiscal cliff" solution and higher-quality stock market leadership. I expect US stocks to trade modestly lower into the close from current levels on more disappointing US economic data, rising global growth fears, Eurozone debt angst and more shorting.