BETWEEN THE HEDGES

Sunday, November 16, 2014

Weekly Outlook

Posted by Gary .....at 3:41 PM

Week Ahead 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 global growth worries, escalating Russia/Ukraine tensions, rising European/Emerging Markets debt angst, technical selling, more shorting and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Friday, November 14, 2014

Market Week in Review

Posted by Gary .....at 7:14 PM

S&P 500 2,039.82 +.39%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Posted by Gary .....at 7:08 PM

Indices

S&P 500 2,039.82 +.39%

DJIA 17,634.74 +.35%

NASDAQ 4,688.53 +1.21%

Russell 2000 1,173.81 +.04%

S&P 500 High Beta 34.29 +.65%

Wilshire 5000 21,199.45 +.41%

Russell 1000 Growth 955.39 +.74%

Russell 1000 Value 1,015.14 +.03%

S&P 500 Consumer Staples 491.62 +.11%

Solactive US Cyclical 139.86 +.54%

Morgan Stanley Technology 994.60 +1.55%

Transports 9,061.53 +1.26%

Utilities 586.04 -2.83%

Bloomberg European Bank/Financial Services 102.85 -.65%

MSCI Emerging Markets 41.21 +.20%

HFRX Equity Hedge 1,173.66 -.04%

HFRX Equity Market Neutral 982.47 -.22%

Sentiment/Internals

NYSE Cumulative A/D Line 228,670 unch.

Bloomberg New Highs-Lows Index 3 +43

Bloomberg Crude Oil % Bulls 31.82 -32.38%

CFTC Oil Net Speculative Position 276,832 +3.09%

CFTC Oil Total Open Interest 1,509,371 +.71%

Total Put/Call .90 -5.26%

OEX Put/Call 2.21 +28.49%

ISE Sentiment 157.0 +40.18%

NYSE Arms .82 -6.82%

Volatility(VIX) 13.31 -2.63%

S&P 500 Implied Correlation 40.36 -3.05%

G7 Currency Volatility (VXY) 8.68 +4.33%

Emerging Markets Currency Volatility (EM-VXY) 8.14 -4.46%

Smart Money Flow Index 17,468.50 +.93%

ICI Money Mkt Mutual Fund Assets $2.644 Trillion +.34%

ICI US Equity Weekly Net New Cash Flow -$1.728 Billion

AAII % Bulls 57.9 +9.94%

AAII % Bears 19.3 +28.3%

Futures Spot Prices

CRB Index 266.79 -.87%

Crude Oil 75.82 -3.33%

Reformulated Gasoline 204.25 -4.17%

Natural Gas 4.02 -8.20%

Heating Oil 241.61 -3.16%

Gold 1,185.60 +.59%

Bloomberg Base Metals Index 192.18 -.73%

Copper 304.65 +.41%

US No. 1 Heavy Melt Scrap Steel 339.0 USD/Ton -.68%

China Iron Ore Spot 75.47 USD/Ton -.49%

Lumber 319.90 -.90%

UBS-Bloomberg Agriculture 1,247.61 +1.25%

Economy

ECRI Weekly Leading Economic Index Growth Rate -2.8% -70 basis points

Philly Fed ADS Real-Time Business Conditions Index .1276 -9.31%

S&P 500 Blended Forward 12 Months Mean EPS Estimate 127.51 -.01%

Citi US Economic Surprise Index 15.40 +.4 point

Citi Eurozone Economic Surprise Index -26.40 +6.0 points

Citi Emerging Markets Economic Surprise Index -5.10 +8.2 points

Fed Fund Futures imply 42.0% chance of no change, 58.0% chance of 25 basis point cut on 12/17

US Dollar Index 87.53 -.05%

Euro/Yen Carry Return Index 152.11 +2.06%

Yield Curve 181.0 +1.0 basis point

10-Year US Treasury Yield 2.32% +2.0 basis points

Federal Reserve's Balance Sheet $4.448 Trillion +.05%

U.S. Sovereign Debt Credit Default Swap 16.84 +1.77%

Illinois Municipal Debt Credit Default Swap 168.0 -1.44%

Western Europe Sovereign Debt Credit Default Swap Index 31.42 -1.5%

Asia Pacific Sovereign Debt Credit Default Swap Index 63.63 -1.29%

Emerging Markets Sovereign Debt CDS Index 246.68 +4.70%

Israel Sovereign Debt Credit Default Swap 77.11 -.5

Iraq Sovereign Debt Credit Default Swap 357.56 -1.35%

Russia Sovereign Debt Credit Default Swap 295.65 +4.97%

China Blended Corporate Spread Index 323.93 +.16%

10-Year TIPS Spread 1.90% -4.0 basis points

TED Spread 22.75 +1.5 basis points

2-Year Swap Spread 21.75 unch.

3-Month EUR/USD Cross-Currency Basis Swap -9.50 +1.5 basis points

N. America Investment Grade Credit Default Swap Index 65.5 -.30%

European Financial Sector Credit Default Swap Index 67.22 -.48%

Emerging Markets Credit Default Swap Index 281.71 +4.59%

CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 87.0 unch.

M1 Money Supply $2.900 Trillion +1.85%

Commercial Paper Outstanding 1,079.60 +.60%

4-Week Moving Average of Jobless Claims 285,000 +6,000

Continuing Claims Unemployment Rate 1.8% unch.

Average 30-Year Mortgage Rate 4.01% -1 basis point

Weekly Mortgage Applications 372.90 -.85%

Bloomberg Consumer Comfort 38.2 +.1 point

Weekly Retail Sales +3.80% -20 basis points

Nationwide Gas $2.91/gallon -.04/gallon

Baltic Dry Index 1,264 -12.04%

China (Export) Containerized Freight Index 1,040.62 -.31%

Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 unch.

Rail Freight Carloads 271,113 -3.11%

Best Performing Style

Large-Cap Growth +.7%

Worst Performing Style

Small-Cap Value -.2%

Leading Sectors

Gaming +5.0%

Internet +3.9%

Homebuilders +3.0%

HMOs +2.6%

Gold & Silver +2.6%

Lagging Sectors

Construction -2.5%

Utilities -2.8%

Hospitals -2.8%

Alt Energy -3.2%

Steel -3.9%

Weekly High-Volume Stock Gainers (29)

ECOM, CZR, SUSQ, ACHN, MGNX, SCMP, FUEL, QTWO, ENV, CVT, PTX, ICUI, FICO, RAX, RDI, MPAA, XON, ISIS, VSAT, PGEM, EBIX, PAHC, GOGO, EVDY, EV, ZTS, FOSL, XOXO and VWR

Weekly High-Volume Stock Losers (22)

ADVS, WLH, MDRX, RXN, SEAS, ALG, AGM, MRD, HGR, BRKR, DY, HCI, FSLR, UBNT, ASCMA, VSLR, ANF, RVNC, FNGN, RYN, SLXP and ICPT

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 Russia/Ukraine Tensions, Rising European/Emerging Markets Debt Angst, Technical Selling, Biotech/Healthcare Sector Weakness

Posted by Gary .....at 3:15 PM

Broad Equity Market Tone:

Advance/Decline Line: Modestly Lower

Sector Performance: Mixed

Volume: Below Average

Market Leading Stocks: Performing In Line

Equity Investor Angst:

Volatility(VIX) 13.70 -.65%

Euro/Yen Carry Return Index 152.08 +.85%

Emerging Markets Currency Volatility(VXY) 8.14 +1.12%

S&P 500 Implied Correlation 43.18 +1.50%

ISE Sentiment Index 138.0 +35.29%

Total Put/Call .88 -6.38%

NYSE Arms .82 -25.82%

Credit Investor Angst:

North American Investment Grade CDS Index 65.66 +.94%

European Financial Sector CDS Index 66.68 +2.19%

Western Europe Sovereign Debt CDS Index 31.41 +.42%
Asia Pacific Sovereign Debt CDS Index 63.53 -.45%

Emerging Market CDS Index 283.12 +.95%

China Blended Corporate Spread Index 323.84 -.18%
2-Year Swap Spread 21.75 -.25 basis point

TED Spread 22.75 +.5 basis point

3-Month EUR/USD Cross-Currency Basis Swap -9.25 +1.0 basis point

Economic Gauges:

3-Month T-Bill Yield .01% unch.

Yield Curve 181.0 -2.0 basis points

China Import Iron Ore Spot $75.47/Metric Tonne -.67%

Citi US Economic Surprise Index 15.40 +2.1 points
Citi Eurozone Economic Surprise Index -26.40 +2.7 points

Citi Emerging Markets Economic Surprise Index -5.10 +2.2 points

10-Year TIPS Spread 1.90 unch.

Overseas Futures:

Nikkei Futures: Indicating -30 open in Japan

DAX Futures: Indicating -23 open in Germany

Portfolio:

Slightly Lower: On losses in my biotech/medical sector longs and emerging markets shorts

Disclosed Trades: None

Market Exposure: 25% Net Long

Today's Headlines

Posted by Gary .....at 2:55 PM

Bloomberg:

NATO Says Russian Forces Are in Ukraine as Putin Goes to G-20. (video) NATO’s chief said Russia is sending troops and heavy weapons into Ukraine as President Vladimir Putin heads to a Group of 20 summit in Australia that’s overshadowed by the crisis. “We have observed in the past days that Russia has again brought arms, equipment, artillery, tanks and rockets over the border into Ukraine,” North Atlantic Treaty Organization Secretary General Jens Stoltenberg said in an interview with Germany’s Bild newspaper. “President Putin has clearly broken the truce agreement and has violated Ukraine’s integrity.” Ukraine is threatened with a return to open warfare, as seen before the Sept. 5 truce that’s being violated on an almost daily basis.

Ruble Extends Longest Weekly Losing Streak in Nine Years on Oil. The ruble weakened, extending the longest stretch of weekly losses since 2005, as oil trading below $80 a barrel exerts pressure on Russia’s revenue and pushes the economy closer to recession. The currency fell 0.9 percent to 47.2235 per dollar at 7:04 p.m. in Moscow, taking the drop in the past five days to 1.2 percent. Ten-year government bond yields climbed nine basis points to a five-year high of 10.29 percent. The dollar-denominated RTS Index slumped 1.2 percent to the lowest since August 2009.

Russia Braces for 'Catastrophic' Drop in Oil Prices. President Vladimir Putin said Russia's economy, battered by sanctions and a collapsing currency, faces a potential “catastrophic” slump in oil prices. Such a scenario is “entirely possible, and we admit it,” Putin told the state-run Tass news service before attending this weekend’s Group of 20 summit in Brisbane, Australia, according to a transcript e-mailed by the Kremlin today.

China Slowdown Deepens as Targeted Stimulus Fails. Aggregate financing in October was 662.7 billion yuan ($108 billion), the People’s Bank of China’s said in Beijing yesterday, down from 1.05 trillion yuan in September and lower than the 887.5 billion yuan median estimate in a Bloomberg survey of analysts. Earlier this week, reports showed deceleration in industrial output and fixed-asset investment. The evidence underscores concern that, outside the U.S., the global economic outlook is deteriorating.

China Busts Underground Banks With $23 Billion Transactions. Beijing police raided more than 10 underground banks that were together involved in $23 billion of transactions as authorities tighten their controls on the movement of money across China’s borders. Police in the Chinese capital busted the groups on Sept. 18, with 59 people arrested, after they handled almost 140 billion of transactions over the “past few years,” the Beijing Municipal Public Security Bureau said in a statement on its official microblog today. It didn’t give a more detailed time frame for the transfers.

ECB Can’t Expand Balance Sheet and Revive ABS Market, Pimco Says. The European Central Bank’s plans to expand its balance sheet and revive the region’s moribund asset-backed securities market are unlikely to work, according to Pacific Investment Management Co. The ECB’s decision to buy asset-backed debt risks crowding out existing investors, cutting liquidity in the market and pushing yield premiums to levels where buyers are no longer adequately compensated, Felix Blomenkamp, the head of Pimco’s European ABS team, wrote in a note to investors. Pimco manages $1.87 trillion of assets. “We believe that the ECB will not likely be able to accomplish the two divergent goals of reviving the ABS market and buying ABS in size at the same time,” wrote Blomenkamp, who is based in Munich. “Buying ABS in any meaningful size would debilitate the market, rather than revive it.”

Italy’s Slump Enters Fourth Year, Complicating Renzi’s Plans. Italy’s economy shrank in the third quarter pushing the nation into a fourth year of a slump that has complicated Prime Minister Matteo Renzi’s efforts to revive growth and keep public finances in check. Gross domestic product fell 0.1 percent from the previous three months, when it declined 0.2 percent, the national statistics institute Istat said in a preliminary report in Rome today. That matched the median forecast in a Bloomberg survey of 22 economists. Output was down by 0.4 percent from a year earlier.

European Stocks Little Changed as Health-Care Shares Fall. European stocks were little changed, paring a weekly advance, as slides in health-care and commodity-producer shares offset gains in media companies. A gauge of health-care stocks was the biggest drag on the Stoxx Europe 600 Index, as Novartis AG and AstraZeneca Plc retreated. Outokumpu Oyj and Anglo American Plc paced miners lower. Abengoa SA and SBM Offshore NV led oil and energy-related companies down. Schibsted ASA (SCH) pushed a measure of media stocks higher after announcing a deal for joint ventures in online classifieds across four countries. The Stoxx Europe 600 Index slipped 0.1 percent to 335.63 at the close of trading, paring its weekly gain to 0.1 percent.

Gold Rebounds as Oil Rally Damps Low Inflation Concerns. Gold futures for December delivery rose 1.3 percent to $1,176.10 an ounce at 12 p.m. on the Comex in New York, heading for the biggest gain since Nov. 7. Total volume was an estimated 225,706 contracts.

Asset Bubbles Are Top Concern for Heartland's Central Banker. As a Federal Reserve bank examiner in the mid-1980s, Esther George delivered bad news to a Nebraska banker: she was downgrading overdue loans, putting his firm’s survival on the line. The owner “broke down and said, ‘This was my life’s work and your decisions are taking my bank away from me,’ ” George, now president of the Federal Reserve Bank of Kansas City, said in an interview. “I was absolutely sympathetic. I knew what it meant for the community.”

ZeroHedge: