Bull Radar

Style Outperformer:

• Small-Cap Growth +1.17%

Sector Outperformers:

• 1) Semis +1.93% 2) Homebuilders +1.72% 3) Road & Rail +1.33%
  

Stocks Rising on Unusual Volume:

• FDO, DG, TASR, ST, ATHM, TKMR, HMSY, WUBA, KNDI, DWA, LCI, ARWR, ENPH and GTAT

Stocks With Unusual Call Option Activity:

• 1) NUE 2) ACHN 3) JWN 4) JBLU 5) URBN
  

Stocks With Most Positive News Mentions:

• 1) DG 2) AAPL 3) RTN 4) GTAT 5) NKE
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• Red Cross Waits for Guarantees as Ukraine Truce Discussed. The Red Cross demanded safety guarantees before it begins inspecting the first 16 trucks from a convoy Russia says is carrying humanitarian aid at the Ukrainian border, as the nations’ top diplomats met to discuss a possible truce. Ukraine agreed to let Russian aid cross into separatist-held territory under the supervision of the International Committee of the Red Cross, which said it still hadn’t received the safety guarantees it needs. In Berlin, Ukrainian Foreign Minister Pavlo Klimkin and his Russian counterpart Sergei Lavrov began talks with Germany and France to ease tensions after officials in Kiev said their troops had destroyed part of an armored column from Russia. 

• Gaza Negotiators Not Budging Ahead of Midnight Deadline. Israeli and Palestinian negotiators showed little movement from long-held positions ahead of a midnight deadline to extend talks that have kept the Gaza Strip free from military conflict for a week. Egyptian officials are brokering a final day of talks in the five-day cease-fire agreed upon last week by Israel and Hamas, the militant Islamist group that controls Gaza. That truce extended an earlier 72-hour cease-fire. 

• China Home Prices Decline in Majority of Cities on Weak Demand. China’s new-home prices fell in July in almost all cities that the government tracks as tight mortgage lending deterred buyers even as local governments eased property curbs. Prices fell in 64 of the 70 cities last month from June, the National Bureau of Statistics said today, the most since January 2011 when the government changed the way it compiles the data. Beijing prices fell 1 percent from June, posting the first monthly decline since April 2012. Prices in Shanghai decreased 1.2 percent and dropped 1.3 percent in Guangzhou, both the biggest slide since January 2011. The eastern city of Hangzhou and the southern tropical city of Sanya had the largest declines in July, each falling 2.4 percent.

• China Banks’ Share Sales to Damp Profit in Vicious Cycle. China’s biggest banks, already poised for the weakest profit growth in more than a decade, risk a further erosion in earnings from record share sales intended to boost their capital after a credit binge.

• Chinese Rate Cuts Portend Stock-Market Losses: Chart of the Day. (graph) 

• Misery Unseen Since 2008 Besets Australia in Conundrum for RBA. A deepening gloom across the largest developed economy to escape recession during the global financial crisis is shaping up as one of the toughest challenges yet for Reserve Bank of Australia chief Glenn Stevens. Australia’s misery index -- the sum of unemployment and inflation rates -- is at 9.0, the highest since 2008, when the collapse of Lehman Brothers Holdings Inc. froze credit markets around the world and triggered the deepest recession in the U.S. since the Great Depression.

• London Home Asking Prices Plunge Most in More Than Six Years. London home sellers cut asking prices by the most in more than six years this month, adding to signs that the property market in the U.K. capital is coming off the boil. London values fell 5.9 percent from the previous month to an average 552,783 pounds ($922,300), the biggest drop since December 2007, property website Rightmove Plc said today. Nationally, prices declined 2.9 percent, a record for an August.

• Asian Stocks Fluctuate After Five-Day Winning Streak. Asian stocks fluctuated, after a five-day winning streak, as health-care shares gained while banks slid with consumer companies. Chugai Pharmaceutical Co. (4519) soared 15 percent as people familiar with the matter said Roche Holding AG is in talks to buy the almost 40 percent of the Japanese firm it doesn’t already own. National Australia Bank Ltd. slid 1.4 percent after the nation’s largest lender by assets said it will set aside more than 245 million pounds ($410 million) for compensation related to U.K. insurance and hedging products. Oversea-Chinese Banking Corp. dropped 0.4 percent in Singapore after Southeast Asia’s second-biggest bank by assets said it plans to raise S$3.37 billion ($2.7 billion) selling shares. The MSCI Asia Pacific Index (MXAP) slipped less than 0.1 percent to 147.96 as of 10:31 a.m. in Tokyo, with seven of its 10 industry groups rising. 

• Hedge Funds Extend Longest Soy Bear Run Since 2006: Commodities. Hedge funds extended the longest bearish streak for soybeans in eight years as improving crop conditions bolster prospects for a record harvest in the U.S., the world’s largest grower. Money managers have been betting on declines for five straight weeks, the most since October 2006. The U.S. on Aug. 12 raised its outlook for domestic production that was already forecast at an all-time high. The bumper harvest will swell global inventories to the biggest ever.

• Bull Market Waning as Barclays Sees 1% Gain for S&P 500. Five years of profit growth exceeding 17 percent is poised to slow in the Standard & Poor’s 500 Index, reducing returns as the bull market ages, according to Leuthold Group LLC and Barclays Plc. Equity price gains approaching 25 percent annually will weaken to 3 percent over the next decade as profit expansion reverts to its rate since 1929, said Doug Ramsey, the chief investment officer at Leuthold. Jonathan Glionna of Barclays says overseas markets are generating too little demand to push the S&P 500 up more than 1 percent in the rest of 2014.

Wall Street Journal:

• U.S. Farmers Are Up to Their Ears in Corn. 

• The Outlook: Federal Reserve Bets It Won't Wait Too Long on Rates. Officials Say Economic Indicators and Financial Markets Aren't Pointing to Overheating.

• Investors Rethink Bets on Europe Shares. Weak Economies, Ukraine Strife Have Hurt Stocks, Spoiling a Popular Wager. Economic headwinds and geopolitical strife have foiled investors betting on a comeback in European stocks, throwing cold water on one of 2014's most highly touted wagers. Many forecasters saw European equities as a likely big winner at the start of the year. Portfolio managers warmed to the continent after shares there lagged behind roaring U.S. stocks last year. Economies across the euro zone looked to be shaking off their financial...

• A Look At What Scares Investors Most.

• Senate Democrats vs. the Middle Class. Senators elected in 2008 made Obama's agenda possible, and its results have harmed most Americans.

MarketWatch.com:

• Fed should squelch any idea of a’Yellen put,’ former central banker says. The Federal Reserve must guard against the perception that there is a “Yellen put”  in place to keep the stock market moving endlessly higher, said Jeremy Stein, a former governor of the central bank. “Markets seem to sense an element of a Fed put, and that complacency can be a source of risk in itself, so you have to push back on that a bit,” Stein said in his first interview, with the New York Times, since leaving the Fed in May and returning to Harvard University’s economics department. Stein said the central bank should stick to its tightening plan, once launched, even if markets gyrate.

Fox News:

• Congressional Dems critical of Obama's efforts on ISIS, say 'mission is lost'. Congressional Democrats were critical Sunday of President Obama’s efforts to stop Islamic militants in the Middle East, suggesting the “mission has been lost” and that U.S. troops might be needed in Iraq.

Zero Hedge:

• US High Yield Inflows Trickle Back But European Stock & Bond Redemptions Surge. (graph)

• Presenting The Quote Stuffing Trading Strategy Of The NY Fed's Favorite Hedge Fund: Citadel.

• 5 Things To Ponder: Multifarious Cogitation.

• Chinese Power Consumption Crashes: Lowest Growth In 16 Months, Tumbles 10% In Shanghai, As Much As 22% Elsewhere. (graph)

• Jackson Hole Preview: Do Not Expect Policy Shift.

• State Of Emergency, Curfew Issued For Ferguson.

• Why The Fed Can't, And Won't, Let The Stock Market Crash.

• Seven Charts That Leave You No Choice But To Not Feel Optimistic About The US Economy.

• Japan’s Keynesian Demise: A Cautionary Tale For Our Times.

• India, Spain Testing Suspected Ebola Patients; Liberian Quarantine Center Raided.

• "God Willing, We Will Raise The Flag Of Allah In The White House" - A Deeper Look Inside ISIS.

• Charting Poverty In Ferguson: Then And Now. (map)

• Goldman On The Consequences Of Recent Geopolitical Events.

• China Contagion: Diamonds & Wine Plunge To 4-Year Lows. (graph)

• 18 Charts Exploring How The Ageing World Will Shape The Global Economy.

Business Insider:

• The White House Has No Idea What's Going On With The Russian Convoy In Ukraine.

• A Market-Shaking Paradigm Shift Could Be Coming Out Of The East.

• Even Liberals Think The Indictment Of Rick Perry Looks Weak.

• Ukraine's Rebel Leader Says He's Got 1,200 Troops Who 'Trained For Months In Moscow'.

• The United States Will Face Tough Choices If Russia And Ukraine Go To War.

• JOHN BURBANK: The Next Crash Is More Likely To Look Like What We Saw In 1987. (video)

• SHILLER: The Market Is At One Of Its Most Expensive Levels Of All Time, And There's One Thing Can Take It Down.

• Kurds Advance Against ISIS Militants With US Air Support.

• Ukraine Says Its Troops Make Breakthrough In Rebel Stronghold As Russian Weapons Pour In.

• The Spread Of Ebola In West Africa Is Deeply Troubling For The Region And The World.

• Bubbles Have Looked Remarkably Similar Throughout History. (graph)

• New York Times Reporter Calls Obama 'The Greatest Enemy Of Press Freedom In A Generation'.

Reuters:

• Islamic State 'massacres' 80 Yazidis in north Iraq: officials. Islamic State insurgents "massacred" some 80 members of Iraq's Yazidi minority in a village in the country's north, a Yazidi lawmaker and two Kurdish officials said on Friday. "They arrived in vehicles and they started their killing this afternoon," senior Kurdish official Hoshiyar Zebari told Reuters. "We believe it's because of their creed: convert or be killed." 

Financial Times: 

• Fed blow to banks over ‘living wills’. Global banks can no longer assume continuing access to the Federal Reserve’s discount lending window as an element of their living wills, people familiar with the process have warned.

Financial News:

• China Large-Scale Private Bond Default Unlikely. A large-scale default of bonds in China would cause financial market turbulence, which can't be allowed when the economy faces "relatively heavy" downward pressure, according to a front-page commentary by Xu Shaofeng. Private bonds of 6.2b yuan will mature next quarter, the biggest amount since 2012 when China started allowing bond issues by medium-sized and small cos., the commentary said.

Weekend Recommendations

• None of note

Night Trading

• Asian indices are -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 103.0 -.5 basis point.

• Asia Pacific Sovereign CDS Index 71.25 -1.25 basis points.

• FTSE-100 futures +.49%.

• S&P 500 futures +.28%.

• NASDAQ 100 futures +.27%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (JKS)/.76

• (AAP)/-.03

• (URBN)/.49

Economic Releases
10:00 am EST

• The NAHB Housing Market Index for August is estimated at 53.0 versus 53.0 in July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Trade Balance could also impact trading today.

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

Weekly Outlook

Week Ahead (audio) by Bloomberg. 
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 modestly higher on diminished Ukraine-Russia tensions, less emerging markets/European debt angst, central bank hopes, technical buying and yen weakness. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

• S&P 500 1,955.06 +1.22%*

 The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,955.06 +1.22%

• DJIA 16,662.90 +.66%

• NASDAQ 4,464.92 +2.15%

• Russell 2000 1,141.65 +.91%

• S&P 500 High Beta 33.0 +1.66%

• Wilshire 5000 20,414.90 +1.25%

• Russell 1000 Growth 912.47 +1.63%

• Russell 1000 Value 983.17 +.93%

• S&P 500 Consumer Staples 457.56 +1.41%

• Solactive US Cyclical 134.39 +1.49%

• Morgan Stanley Technology 973.16 +1.67%

• Transports 8,264.12 +2.12%

• Utilities 548.81 +1.13%

• Bloomberg European Bank/Financial Services 103.69 +1.40%

• MSCI Emerging Markets 44.58 +2.70%

• HFRX Equity Hedge 1,163.62 +.70%

• HFRX Equity Market Neutral 973.06 +.48%

Sentiment/Internals

• NYSE Cumulative A/D Line 227,748 +1.50%

• Bloomberg New Highs-Lows Index 0 +299

• Bloomberg Crude Oil % Bulls 33.33 -3.73%

• CFTC Oil Net Speculative Position 324,066 -6.66%

• CFTC Oil Total Open Interest 1,583,609 -.23%

• Total Put/Call .99 -7.48%

• OEX Put/Call .93 -.25%

• ISE Sentiment 75.0 -7.41%

• NYSE Arms 1.26 +100.0%

• Volatility(VIX) 13.15 -16.61%

• S&P 500 Implied Correlation 50.65 -12.2%

• G7 Currency Volatility (VXY) 5.92 -2.79%

• Emerging Markets Currency Volatility (EM-VXY) 6.82 -2.71%

• Smart Money Flow Index 11,402.01 +1.97%

• ICI Money Mkt Mutual Fund Assets $2.577 Trillion +.41%

• ICI US Equity Weekly Net New Cash Flow -$3.064 Billion

• AAII % Bulls 39.8 +28.9%

• AAII % Bears 27.0 -29.5%

Futures Spot Prices

• CRB Index 289.93 -.86%

• Crude Oil 97.35 unch.

• Reformulated Gasoline 269.86 -1.75%

• Natural Gas 3.77 -5.0%

• Heating Oil 284.80 -.80%

• Gold 1,305.40 -.34%

• Bloomberg Base Metals Index 199.18 -1.85%

• Copper 310.30 -2.44%

• US No. 1 Heavy Melt Scrap Steel 356.67 USD/Ton unch.

• China Iron Ore Spot 93.40 USD/Ton -2.40%

• Lumber 345.40 -.32%

• UBS-Bloomberg Agriculture 1,300.80 -.22%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 3.8% unch.

• Philly Fed ADS Real-Time Business Conditions Index .1131 -13.53%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 127.45 +.17%

• Citi US Economic Surprise Index -5.70 -8.7 points

• Citi Eurozone Economic Surprise Index -35.20 -3.3 points

• Citi Emerging Markets Economic Surprise Index -7.80 -10.7 points

• Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 9/17

• US Dollar Index 81.42 +.03%

• Euro/Yen Carry Return Index 143.20 +.26%

• Yield Curve 193.0 -5.0 basis points

• 10-Year US Treasury Yield 2.34% -8.0 basis points

• Federal Reserve's Balance Sheet $4.389 Trillion +.50%

• U.S. Sovereign Debt Credit Default Swap 16.67 +4.70%

• Illinois Municipal Debt Credit Default Swap 168.0 +.07%

• Western Europe Sovereign Debt Credit Default Swap Index 33.88 -13.11%

• Asia Pacific Sovereign Debt Credit Default Swap Index 71.36 -6.95%
  

• Emerging Markets Sovereign Debt CDS Index 214.46 -8.98%
  

• Israel Sovereign Debt Credit Default Swap 85.50 -11.87%

• Iraq Sovereign Debt Credit Default Swap 344.10 -10.09%

• Russia Sovereign Debt Credit Default Swap 242.28 -10.54%

• China Blended Corporate Spread Index 312.67 -2.87%

• 10-Year TIPS Spread 2.20% -4.0 basis points

• TED Spread 21.0 -.25 basis point

• 2-Year Swap Spread 22.25 -1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -13.5 -1.75 basis points

• N. America Investment Grade Credit Default Swap Index 60.0 -9.91%
  

• European Financial Sector Credit Default Swap Index 69.5 -9.47%
  

• Emerging Markets Credit Default Swap Index 273.01 -7.50%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 84.0 +2.5 basis points

• M1 Money Supply $2.886 Trillion +.66%

• Commercial Paper Outstanding 1,036.8 -.2%

• 4-Week Moving Average of Jobless Claims 295,750 +2,250

• Continuing Claims Unemployment Rate 1.9% unch.

• Average 30-Year Mortgage Rate 4.12% -2.0 basis points

• Weekly Mortgage Applications 337.70 -2.68%

• Bloomberg Consumer Comfort 36.8 +.6 point

• Weekly Retail Sales +4.80% +90 basis points

• Nationwide Gas $3.47/gallon -.01/gallon

• Baltic Dry Index 942.0 +21.23%

• China (Export) Containerized Freight Index 1,109.96 -.19%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 +9.09%

• Rail Freight Carloads 266,153 -1.54%

Best Performing Style

• Large-Cap Growth +1.6%

Worst Performing Style

• Small-Cap Value +.7%

Leading Sectors

• Biotech +4.6%

• Airlines +3.6%

• Alt Energy +3.6%

• Oil Tankers +3.3%

• Hospitals +2.8%

Lagging Sectors

• Steel -.5% 

• Networking -.7%

• Retail -1.0%

• 3D Printing -1.4%

• Oil Service -1.4%

Weekly High-Volume Stock Gainers (25)

• RPTP, CQB, ICPT, KMR, OVTI, MPAA, EPZM, ARWR, ITMN, MFRM, TRAK, NLNK, DTSI, KMI, TRUE, AIRM, LEAF, ZOES, ULTI, BGG, HMHC, RICE, EXAS, GK and ENOC

Weekly High-Volume Stock Losers (20)

• DDS, BCOR, WAC, NUAN, MED, VSAT, MASI, CREE, RATE, FF, SEM, LRN, POST, KATE, RRGB, VOLC, NDLS, HGR, NES and SEAS

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Slightly Lower into Final Hour on Escalating Russia-Ukraine Tensions, Rising Global Growth Fears, Increasing European Debt Angst, Retail/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.55 +9.10%

• Euro/Yen Carry Return Index 143.14 +.14%

• Emerging Markets Currency Volatility(VXY) 6.86 +2.39%

• S&P 500 Implied Correlation 51.60 +2.79%

• ISE Sentiment Index 74.0 +1.37%

• Total Put/Call 1.0 +2.04%

• NYSE Arms 1.16 +.33% 

Credit Investor Angst:

• North American Investment Grade CDS Index 59.79 +.49%

• European Financial Sector CDS Index 68.97 +4.98%

• Western Europe Sovereign Debt CDS Index 33.88 +1.06%

• Asia Pacific Sovereign Debt CDS Index 71.26 -1.57%

• Emerging Market CDS Index 273.19 +.43%

• China Blended Corporate Spread Index 312.68 -.93%

• 2-Year Swap Spread 22.25 -.75 basis point

• TED Spread 21.0 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -13.50 unch.

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 193.0 -6.0 basis points

• China Import Iron Ore Spot $93.40/Metric Tonne +.21%

• Citi US Economic Surprise Index -5.70 -3.1 points

• Citi Emerging Markets Economic Surprise Index -7.80 -.1 point

• 10-Year TIPS Spread 2.19 -3.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating -35 open in Japan

• DAX Futures: Indicating +32 open in Germany

Portfolio: 

• Slightly Higher: On gains in my biotech sector longs and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them

• Market Exposure: 50% Net Long