Bull Radar

Style Outperformer:

• Large-Cap Value -.70%

Sector Outperformers:

• 1) Tobacco -.34% 2) Drugs -.38% 3) HMOs -.51%
  

Stocks Rising on Unusual Volume:

• SIAL, CLX, ADHD, THOR, TKMR and LCI

Stocks With Unusual Call Option Activity:

• 1) GDP 2) UBNT 3) EMC 4) MAT 5) CL

Stocks With Most Positive News Mentions:

• 1) T 2) EMC 3) DRC 4) SIAL 5) BOBE
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• Ukraine Clashes Test Truce as Russian Oppositon Protests. Ukraine’s truce was tested by battles between government forces and separatists as Russia’s opposition held a peace march to protest President Vladimir Putin’s policy in the neighboring country. The government in Kiev and the rebels traded accusations of cease-fire violations even after they agreed to create a buffer zone to strengthen the pact. In Moscow and St. Petersburg, the demonstrations ended without serious incident. Estimates about the size of the crowd in the Russian capital ranged from 5,000 people, according to police, to 100,000, cited by Boris Nemtsov, a protest leader.

• Global Finance Chiefs Said to Warn of Growing Economic Risks. Group of 20 finance chiefs will warn that risks to the global economy have increased in recent months, an official said, citing the latest draft of a communique due to be released today. Finance ministers and central bank governors meeting in Cairns, Australia, will acknowledge in the statement that the outlook is uneven among countries, the official from a G-20 nation said yesterday, asking not to be identified because the document hasn’t been made public. G-20 economies today will also commit to taking growth-boosting measures to spur recovery.

• Asia May Need to Sacrifice Growth to Cope With Fed, Basri Says. Asia’s developing nations may have to sacrifice some growth next year and focus on keeping their economies stable amid potential fallout from higher U.S. interest rates, Indonesian Finance Minister Chatib Basri said. Capital outflows are a threat facing emerging markets as the prospect of the Federal Reserve lifting rates lures funds, Basri said in an interview yesterday in Cairns, Australia, where Group of 20 finance chiefs met. In Indonesia, where the benchmark rate is already at its highest since 2009, policy makers may have to tighten further to preserve the nation’s relative appeal to investors, he said.

• Nikkei Crash a Risk Seen by Posen If Abe Blinks on Tax-Rise Plan. On the wall of economist Adam Posen’s Washington office hangs a framed poster of Akira Kurosawa’s 1954 film classic, “Seven Samurai.” The memento speaks to Posen’s love of Japan, born in his days as a student and since manifested in his career, through books on the nation’s economic woes and trips to Tokyo to advise its policy makers. In a study published in June 2010, he even blended cultural and economic analysis to show what lessons “Seven Samurai” carries for central bankers.

• Weidmann Says Governments Must Take Lead Amid ECB Policy Limits. European Central Bank Governing Council member Jens Weidmann said monetary policy can only play a limited role in fostering growth, encouraging governments to press ahead with structural reforms. European countries with high debt levels should focus on a “credible path toward sustainable public finances” and restructure their economies to increase competitiveness, Weidmann told Bloomberg News in Cairns, Australia, where he is attending a Group of 20 meeting of finance chiefs. “Monetary policy should not be overburdened and asked to do tricks it cannot deliver,” Weidmann said. It “should also not be expansionary for longer than necessary to ensure price stability as we should not forget that the loose monetary policy also creates risks and comes with side effects,” he said.

• Chinese H Shares Fall to Two-Month Low as PetroChina Leads Slump. A gauge of Chinese stocks traded in Hong Kong fell, heading for its lowest close in two months, led by a retreat in energy shares. PetroChina Co. and China Petroleum & Chemical Corp. both slumped 2.1 percent in the city. China Galaxy Securities Co., a Hong Kong-listed broker part-owned by China’s sovereign wealth fund, tumbled 4.3 percent after saying its fixed-income chief Dai Xu and two other employees are cooperating with the nation’s judicial authority. Agile Property Holdings Ltd. plunged 7.1 percent after announcing a rights offer. The Hang Seng China Enterprises Index dropped 1.6 percent to 10,612.95 at 9:46 a.m. in Hong Kong. The MSCI China Index slid 1.4 percent, while the Shanghai Composite Index (SHCOMP) fell 1 percent.

• Most Asian Stocks Fall as SoftBank Slides; Kiwi Advances. Most Asian stocks fell, as SoftBank Corp. drove Japan’s Nikkei 225 Stock Average lower after Alibaba (BABA) Group Holding Ltd’s U.S. trading debut. New Zealand’s shares and currency gained after the government was returned in an election, while Brent crude fell with copper. The MSCI Asia Pacific Index dropped 0.1 percent by 9:59 a.m. in Tokyo, with the Nikkei 225 declining the first time in three days as SoftBank, Alibaba’s biggest shareholder, slid the most in a month.

• Corn Declines With Soybeans to 2010 Lows on Increasing Supplies. Corn and soybeans extended a slump to the lowest levels since 2010 on expectations that harvests in the U.S., the world’s biggest grower of the crops, will reach records. Wheat rebounded from a four-year low. Corn for December delivery lost 0.4 percent to $3.3025 a bushel on the Chicago Board of Trade, the lowest for a most-active contract since June 2010. Soybean futures for November dropped as much as 1 percent to $9.4725 a bushel, the lowest since July 2010, and were at $9.485 by 9:30 a.m. in Singapore.

Wall Street Journal:

• EMC(EMC) Weighs Merger, Other Options. Pressed by Activist and With CEO Expected to Retire, Data-Storage Giant Reaches Crossroad.

• Financial Elite's Offspring Start Their Own Hedge Funds.

• People's Climate Demarche. The anticarbon campaign stalls even at the United Nations.

CNBC:

• Blackstone(BX) to pull out of Russia. US private equity group Blackstone is "giving up on Russia", highlighting how even well-connected western investors are shying away from doing business in the country.

Zero Hedge:

• Citi(C) Asks "Who Is Levering Up?", Answers "Everyone" And Finds Median Leverage Has Never Been Higher. (graph)

• Algos Gone Wild: BABA "Glitch" Halted 7 Seconds, "100s Of Flash Crashes" Into Close. (graph)

• 5 Things To Ponder: The Fed.

• First CalPERS, Now Texas Teachers Cut Hedge Fund Exposure.

• Quantitative Proof The Fed Is Destroying The Middle Class. (graph)

• Exponential: Ebola Cases Now Double Every 3 Weeks; CDC Warns As Many As Half A Million May Be Infected Soon.

• Military Plant In East Ukraine Devastated By Massive Explosion; Kiev Accuses Russia Of Using Tactial Nuke.

• AP Reveals 8 Ways Obama's "Most Transparent Administration Ever" Blocks Information.

• Meanwhile, Here's What The "Super-Rich" Are Rushing To Buy.

• Greenspan's "Irrational Exuberance" Warning In Context. (graph)

• USDJPY Opens At 6-Year Highs, Extreme 'Relative Strength' Signals 30% Drop Potential. (graph)

• The US Ponzi Economy. (graph)

• Global Leading Indicator Plunges To Economic "Slowdown", Goldman Warns. (graph)

• We Are Living In A State Of Keynesian "Bliss".

Business Insider:

• Another Huge Middle Eastern Country With An Al Qaeda Franchise Is On The Verge Of Exploding.

• 6 Russian Fighter Jets Were Intercepted Near Alaska.

• Catalonian Separatists Aren't Fazed By Scotland's 'No' Vote.

• Alibaba Is Already The Fourth Most Valuable Technology Company In The World.

• China Is Trying To Build A New World Order.

• Retired Head Of Marine Corps: Obama’s ISIS Strategy Doesn’t Have ‘A Snowball’s Chance In Hell Of Succeeding’.

• Nude Photos Of Kim Kardashian, Hope Solo Leak In Massive Second Release From Hackers.

• Ukraine Is On The Brink Of Total Economic Collapse.

• Fleckenstein Goes After CNBC Anchor And Her Rabid Colleagues For Talking Up A Happy Future 'When There's No Shot That That Happens'.

• ISIS Militants Are Rampaging Through Kurdish Towns On The Syria-Turkey Border.

• French And German Visions For Europe Are On A Crash Course.

NY Times:

• China and Iran to Conduct Joint Naval Exercises in the Persian Gulf.

Reuters:

• Siemens near deal to buy Dresser-Rand: Sources. The German industrial conglomerate Siemens AG is near an agreement to acquire U.S. oilfield equipment maker Dresser-Rand Group for all cash, people familiar with the matter said on Sunday. A deal for Dresser-Rand, which has a market capitalization of more than $6 billion, could come as soon as Monday, some of them said.

• Alibaba(BABA) issues additional shares to raise IPO total to $25 billion-report.

• Short sellers target China, this time from the shadows. Short-sellers who profit from stock price declines have resumed targeting Chinese companies after a three-year lull, but many of the researchers who instigate the strategy are now cloaked in anonymity, shielding themselves from angry companies and Beijing's counter-investigations.

Financial Times: 

• China risks ‘balance-sheet recession’ as stimulus impact wanes. China has launched a fresh effort to boost its flagging economy with cash injections by the central bank, but signs are mounting that monetary stimulus is losing its effectiveness as debt-ridden companies lose their appetite for borrowing even at low rates. 

• Europe groups fear being caught in US tax crackdown. European multinationals have launched a rearguard effort in Washington to prevent them becoming unintended victims of a US crackdown on tax-driven international mergers.

Telegraph:

• Europe will never be the same after Scot vote, nor will British euroscepticism. Scottish nationalism has lit the blue touch paper beneath Europe's separtist fault lines.

• The solution to Italy’s woes is quite simple – leave the euro. Unless something big starts to change soon, Italy is on course for the mother and father of a sovereign default.

• 10 warning signs of global financial meltdown. Stock markets and investors around the world have enjoyed record gains but the clouds are gathering.  

Sueddeutsche Zeitung:

• German Industry Group Cuts Economy Growth Forecast. German economy to grow 1.5% rather than 2% as projected earlier, citing Ulrich Grillo, president of Federation of German Industry. Crises in Ukraine, Middle East hurt German economy, citing Grillo. Growth to become increasingly volatile because of German economy's international ties, he said. Russian sanction and countersanctions "really hurt" German companies, Grillo said.

Wirtschaftswoche:

• ECB Not Currently Planning Quantitative Easing, Noyer Says. ECB not currently planning to loosen its stability policy or to buy government bonds, citing ECB Governing Council member Christian Noyer. ECB to to monitor financial market reaction, including lending and effect of new interest rates, to monetary policy measures taken in June and Sept. before even considering QE, Noyer said. Noyer agrees with Bundesbank's Weidmann's criticism of asset-backed security program; ECB has to verify quality of loan securitizations before purchase. Noyer doesn't see deflation in euro zone.

Night Trading

• Asian indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 90.5 -.5 basis point.

• Asia Pacific Sovereign CDS Index 62.50 -1.0 basis point.

• FTSE-100 futures -.33%.

• S&P 500 futures -.44%.

• NASDAQ 100 futures -.44%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AZO)/11.26

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for August is estimated to fall to .33 versus .39 in July.

10:00 am EST

• Existing Home Sales for August are estimated to rise to 5.2M versus 5.15M in July.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kocherlakota speaking, Fed's Dudley speaking, Fed's George speaking, HSBC China Manufacturing PMI, (TOT) investor day and the Citi Industrial Conference could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly lower and to maintain losses 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 lower on Russia-Ukraine/Mideast tensions, rising European/Emerging Markets debt angst, global growth worries, Fed rate hike concerns, profit-taking and technical selling. 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 2,010.40 +1.25%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 2,010.40 +1.25%

• DJIA 17,279.74 +1.72%

• NASDAQ 4,579.78 +.27%

• Russell 2000 1,146.92 -1.18%

• S&P 500 High Beta 33.99 +.21%

• Wilshire 5000 20,921.63 +.87%

• Russell 1000 Growth 936.30 +.92%

• Russell 1000 Value 1,010.42 +1.19%

• S&P 500 Consumer Staples 468.82 +1.49%

• Solactive US Cyclical 137.99 +1.10%

• Morgan Stanley Technology 986.31 -.20%

• Transports 8,633.83 +.95%

• Utilities 556.91 +1.32%

• Bloomberg European Bank/Financial Services 112.34 +1.66%

• MSCI Emerging Markets 43.78 -.59%

• HFRX Equity Hedge 1,182.65 -.08%

• HFRX Equity Market Neutral 973.24 -.07%

Sentiment/Internals

• NYSE Cumulative A/D Line 228,598 -.03%

• Bloomberg New Highs-Lows Index -59 +150

• Bloomberg Crude Oil % Bulls 40.0 unch.

• CFTC Oil Net Speculative Position 297,281 -.90%

• CFTC Oil Total Open Interest 1,528,614 -1.60%

• Total Put/Call .82 -6.82%

• OEX Put/Call .63 -55.63%

• ISE Sentiment 81.0 -33.06%

• NYSE Arms .92 +21.05%

• Volatility(VIX) 12.11 -9.02%

• S&P 500 Implied Correlation 44.77 -9.79%

• G7 Currency Volatility (VXY) 7.28 -5.94%

• Emerging Markets Currency Volatility (EM-VXY) 7.30 +.55%

• Smart Money Flow Index 11,569.46 +1.65%

• ICI Money Mkt Mutual Fund Assets $2.576 Trillion -.65%

• ICI US Equity Weekly Net New Cash Flow -$1.328 Billion

• AAII % Bulls 42.2 +4.6%

• AAII % Bears 23.0 -13.6%

Futures Spot Prices

• CRB Index 279.40 -.89%

• Crude Oil 92.41 +.28%

• Reformulated Gasoline 261.14 +3.84%

• Natural Gas 3.84 -.10%

• Heating Oil 271.66 -.94%

• Gold 1,215.50 -1.05%

• Bloomberg Base Metals Index 196.38 -1.15%

• Copper 309.15 -.37%

• US No. 1 Heavy Melt Scrap Steel 359.0 USD/Ton +.65%

• China Iron Ore Spot 81.70 USD/Ton -.37%

• Lumber 329.0 -2.4%

• UBS-Bloomberg Agriculture 1,172.37 -3.0%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 1.7% unch.

• Philly Fed ADS Real-Time Business Conditions Index -.0786 +25.4%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 128.64 +.23%

• Citi US Economic Surprise Index 20.0 -16.2 points
• Citi Eurozone Economic Surprise Index -39.70 +5.7 points

• Citi Emerging Markets Economic Surprise Index -21.60 -8.7 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 84.74 +.67%

• Euro/Yen Carry Return Index 146.10 +.56%

• Yield Curve 201.0 -4.0 basis points

• 10-Year US Treasury Yield 2.57% -4.0 basis points

• Federal Reserve's Balance Sheet $4.408 Trillion +.65%

• U.S. Sovereign Debt Credit Default Swap 16.87 +6.50%

• Illinois Municipal Debt Credit Default Swap 160.0 +1.20%

• Western Europe Sovereign Debt Credit Default Swap Index 26.80 -3.63%

• Asia Pacific Sovereign Debt Credit Default Swap Index 62.60 -2.54%
  

• Emerging Markets Sovereign Debt CDS Index 221.64 +1.26%
  

• Israel Sovereign Debt Credit Default Swap 78.0 -5.45%

• Iraq Sovereign Debt Credit Default Swap 324.11 -.48%

• Russia Sovereign Debt Credit Default Swap 238.82 +.28%

• China Blended Corporate Spread Index 305.38 -1.14%

• 10-Year TIPS Spread 2.03% -9.0 basis points

• TED Spread 22.25 -.25 basis point

• 2-Year Swap Spread 24.0 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -11.25 +2.75 basis points

• N. America Investment Grade Credit Default Swap Index 56.20 -5.55%
  

• European Financial Sector Credit Default Swap Index 56.56 -3.79%
  

• Emerging Markets Credit Default Swap Index 258.76 +2.59%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 82.0 -.5 basis point

• M1 Money Supply $2.861 Trillion +1.14%

• Commercial Paper Outstanding 1,050.80 +.10%

• 4-Week Moving Average of Jobless Claims 299,500 -4,500

• Continuing Claims Unemployment Rate 1.8% -10 basis points

• Average 30-Year Mortgage Rate 4.23% +11 basis points

• Weekly Mortgage Applications 352.90 +7.85%

• Bloomberg Consumer Comfort 37.s +.7 point

• Weekly Retail Sales +4.20% -70.0 basis points

• Nationwide Gas $3.36/gallon -.05/gallon

• Baltic Dry Index 1,089 -7.79%

• China (Export) Containerized Freight Index 1,104.76 -.87%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 20.0 -11.11%

• Rail Freight Carloads 279,052 +16.69%

Best Performing Style

• Large-Cap Value +1.20%

Worst Performing Style

• Small-Cap Growth -1.3%

Leading Sectors

• HMOs +2.3%

• Biotech +2.0%

• Hospitals +1.9%

• Drugs +1.7%

• Semis +1.5%

Lagging Sectors

• Social Media -2.0% 

• Coal -3.7%

• Disk Drives -3.8%

• Alt Energy -4.2%

• Gold & Silver -5.2%

Weekly High-Volume Stock Gainers (21)

• AVNR, CNCE, AUXL, CNVR, GRT, ULTA, EPIQ, TGTX, APOG, AVID, QDEL, DD, ALR, BBG, TAP, DRC, TNET, PODD, GDOT, NUE and HDS

Weekly High-Volume Stock Losers (23)

• AGNC, HCN, FR, SKX, DDR, TEN, MDU, DEI, ADBE, ALOG, NEWM, BRC, EPR, RTRX, CTRE, OI, WPG, RATE, UVV, PETX, PIR, RAX and BBSI

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Reversing Lower into Final Hour on Global Growth Fears, Technical Selling, Profit-Taking, Gaming/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Heavy

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 12.16 +1.08%

• Euro/Yen Carry Return Index 145.99 -.44%

• Emerging Markets Currency Volatility(VXY) 7.30 -.41%

• S&P 500 Implied Correlation 45.01 +3.09%

• ISE Sentiment Index 75.0 -44.0%

• Total Put/Call .80 -12.09%

• NYSE Arms .68 -38.17% 

Credit Investor Angst:

• North American Investment Grade CDS Index 56.34 -1.29%

• European Financial Sector CDS Index 56.66 -1.27%

• Western Europe Sovereign Debt CDS Index 26.90 -3.21%

• Asia Pacific Sovereign Debt CDS Index 62.60 -1.44%

• Emerging Market CDS Index 221.23 -.66%

• China Blended Corporate Spread Index 305.38 -1.51%

• 2-Year Swap Spread 24.0 -.25 basis point

• TED Spread 23.0 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -11.25 -1.0 basis point

Economic Gauges:

• 3-Month T-Bill Yield .01% unch.

• Yield Curve 202.0 -4.0 basis points

• China Import Iron Ore Spot $81.70/Metric Tonne -1.57%

• Citi US Economic Surprise Index 20.00 +.2 point

• Citi Emerging Markets Economic Surprise Index -21.60 unch.

• 10-Year TIPS Spread 2.03 unch.

Overseas Futures:

• Nikkei Futures: Indicating -75 open in Japan

• DAX Futures: Indicating unh. open in Germany

Portfolio: 

• Higher: On gains in my biotech sector longs, index hedges and emerging markets shorts

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

• Market Exposure: 50% Net Long