Bull Radar

Style Outperformer:

• Small-Cap Value +.1%

Sector Outperformers:

• 1) Gold & Silver +1.9% 2) Steel +1.8% 3) Airlines +.5%

Stocks Rising on Unusual Volume:

• HAS, QSII, TTWO, TCK, XENT and SLGN

Stocks With Unusual Call Option Activity:

• 1) LC 2) GME 3) SHPG 4) HLF 5) TLT

Stocks With Most Positive News Mentions:

• 1) GRPN 2) QLYS 3) ESV 4) KORS 5) CMTL

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -19.8% Below 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 44.5% of Issues Advancing, 52.8% Declining
• 28 New 52-Week Highs, 25 New Lows
• 55.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.7%
• Vix 16.6 +2.67%
• Total Put/Call .87 -6.45%
• TRIN/Arms 1.45 +20.7%

Monday Watch

Today's Headlines

Bloomberg:

• China’s Diverging Property Market Raises Bubble Risk: Chart.
• Iraq Starts Offensive to Retake Mosul From Islamic State. The Iraqi army backed by Shiite militias and the U.S.-led coalition has begun a long-awaited offensive in a bid to retake Mosul, the country’s second-largest city, from Islamic State. “We will soon meet at Mosul to celebrate the victory and will all stand together to punish Islamic State,” Prime Minister Haidar al-Abadi said early Monday in a speech broadcast on state television. “We will restore order and stability in Mosul."
• Big Central Bank Assets Jump Fastest in 5 Years to $21 Trillion. The world’s biggest central banks are bulking up their balance sheets this year at the fastest pace since 2011’s European debt crisis to boost lackluster economic recoveries with asset purchases that are supporting stock and bond prices. The 10 largest lenders now own assets totaling $21.4 trillion, a 10 percent increase from the end of last year, data collected by Bloomberg show. Their combined holdings grew by 3 percent or less in both 2015 and 2014.
• Asian Bonds Decline on Fed Concerns as Dollar Maintains Gains. Asian bonds dropped and the dollar extended gains against the pound as the case for a U.S. interest-rate increase this year solidifies. Regional stocks gained and oil declined. Benchmark bond yields in Australia and New Zealand increased by at least three basis points following a retreat in U.S. Treasuries on Friday. The Bloomberg Dollar Spot Index held near a seven-month high, with futures indicating a 66 percent chance that the Federal Reserve will hike borrowing costs by December. The MSCI Asia Pacific Index rose 0.2 percent following its biggest weekly loss in a month, while crude was headed for its lowest close in a week.
• Asian Stocks Rise as Investors Mull U.S. Interest-Rate Outlook. Asian stocks rose for a second day as investors weighed the outlook for U.S. interest rates amid signs the world’s biggest economy is strengthening. Japanese shares advanced as the yen weakened. The MSCI Asia Pacific Index gained 0.1 percent to 138.25 as of 9:05 a.m. in Tokyo, after sliding the most in a month last week. Japan’s Topix index rose 0.2 percent as the yen traded at 104.11 against the U.S. dollar.
• Oil Extends Decline as U.S. Producers Boost Drilling Amid Glut. Futures lost as much as 0.7 percent in New York after slipping 0.2 percent Friday. Rigs targeting crude rose for a seventh consecutive week to the highest level since February, Baker Hughes Inc. said on its website. Output from OPEC member Libya has expanded to 560,000 barrels a day, according to an official at National Oil Corp. This compares with a reported production rate of 540,000 a barrels a day last week.
• Russia's OPEC Bear Hug Probably Won't Last.

Zero Hedge: 

• Latest Wiki Dump Reveals Heavy Press Collusion Over Hillary's "Excellent Health" Medical Statement.
• Where The Stimulus Is Hiding: China's Fiscal Push Is Now Bigger Than After The Global Meltdown. (graph)
• "Pounded" - How Not To Manage A Fiat Currency.
•  Is Obama Juicing Government Spending To Get Hillary Elected?
•  Saudi Bank Stocks Tumble As Bailout Fails To Stem Liquidity Stress. (graph)
• "The System Simply Isn't Working" - Hugh Hendry Warns Of 1930s-Style "Dramatic Fulcrum Point" In Europe.
• The End Of Growth's "Fake Elixir".
• The (Dollar) Straw That Breaks The Camel's Back Of Political Correctness.
• Protectionism Returns: Germany Seeks To End "Unwanted Foreign Takeovers" Of Local Companies.

Business Insider: 

• 'Nazi Republicans leave town or else': North Carolina county's GOP headquarters graffitied, firebombed.
• Freight rail traffic is collapsing.
• Saudi Arabia won't stick to the oil deal as long as economics says not to.
  

Night Trading

• Asian indices are -.75% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 116.75 +3.0 basis points.
• Asia Pacific Sovereign CDS Index 34.0 -.5 basis point.
• Bloomberg Emerging Markets Currency Index 71.93 -.14%.
• S&P 500 futures -.41%.
• NASDAQ 100 futures -.42%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (BAC)/.34
• (SCHW)/.33
• (HAS)/1.74
• (JBHT)/1.02
• (CE)/1.61
• (IBM)/3.23
• (IEX)/.92
• (NFLX)/.05
• (UAL)/3.05

Economic Releases
8:30 am EST

• Empire Manufacturing for October is estimated to rise to .75 versus -1.99 in September.

9:15 am EST

• Industrial Production MoM for September is estimated to rise +.2% versus a -.4% decline in August. 
• Capacity Utilization for September is estimated to rise to 75.6% versus 75.5% in August. 
• Manufacturing Production for September is estimated to rise +.2% versus a -.4% decline in August.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Fischer speaking, RBA meeting and the Eurozone CPI report could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the week.

Weekly Outlook

• Week Ahead by Bloomberg.
• Wall St. Week Ahead by Reuters.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on election uncertainty, global growth worries, commodity weakness, yen strength, rising European/Emerging Markets/US High-Yield debt angst and earnings outlook concerns. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg:

• No Progress Made at Syria Talks as Russia Warns of U.S. Conflict. Talks on Syria’s civil war among Russia, the U.S. and Middle East powers ended without result amid a warning in Moscow that the risk of conflict is increasing between the two former Cold War rivals. Russian Foreign Minister Sergei Lavrov left Lausanne, Switzerland, for Moscow after about four hours of talks on Saturday, saying the sides had discussed certain “ideas” for advancing a resolution of the 5 1/2 year war and agreed to pursue efforts again soon. The negotiations over the deepening conflict in Syria marked a bid to pull back from a diplomatic collision over the Russian-backed siege of Aleppo by President Bashar al-Assad’s forces in a standoff that has brought ties between Russia and the U.S. to a recent low. Secretary of State John Kerry met with Lavrov and their counterparts from Saudi Arabia, Qatar, Iran, Jordan, Iraq, Egypt and Turkey, aiming to restore a truce to deliver aid supplies to Aleppo and other besieged areas. Kerry said there was no agreement on any concrete steps to halt the violence, the Associated Press reported. He said some ideas under discussion could prove helpful to restarting the peace process.
• Bulls Unshaken as Profit Duds Rattle U.S. Stocks in Winding Week. A gloomy beginning to earnings season sent U.S. stocks to a second week of losses. A trio of Wall Street’s biggest bulls say don’t worry. It was a week of twists as the S&P 500 Index alternated between gains and losses, a rarity during the bull market but one that’s now happened four times this year as sentiment is swinging on everything from central-bank policy to the U.S. election and perceptions on the economy’s strength. Earnings took a turn in the spotlight in the latest week, as a profit miss from Alcoa Inc. rattled the market before signs of life from the largest banks buoyed optimism.

Wall Street Journal: 

• Barack Obama Praises Global Accord to Limit HFC Greenhouse Gases. Some U.S. companies are already transitioning to alternatives to hydrofluorocarbons.
• Why the Economy Doesn’t Roar Anymore. The long boom after World War II left Americans with unrealistic expectations, but there’s no going back to that unusual Golden Age

Barron's:

• Had bullish commentary on (X), (FMC) and (PVH).
• Had bearish commentary on (AMZN).

Fox News:

• WikiLeaks hacked emails reveal more about Clinton's once-private Wall Street speeches. (video) More hacked emails released Saturday from WikiLeaks appear to show more about Hillary Clinton’s private, high-priced Wall Street speeches including her argument that Washington lawmakers would pass the Dodd-Frank banking reform law merely for “political reasons.”

CNBC: 

• Growth of shadow banking spurs warnings of a new credit crisis. (video)

Zero Hedge:

• Wikileaks Releases Another 850 Podesta Emails In Part 8 Of Data Dump; Total Is Now 11,019.
• Restuarant Industry In Gloom As Number Of Americans Eating Out Tumbles. (graph)
• "Radical Changes To The Business Model" - Deutsche Bank(DB) Forced To Shrink US Operations As Part Of DOJ Settlement.
• Here Are Hillary Clinton's Three Speeches To Goldman Sachs For Which She Was Paid $675,000.
• 5 Urgent Warnings From Big Banks That The "Economy Has Gone Suicidal".
• Drowning In Debt: 35% Of Americans Have Debt That Is At Least 180 Days Past Due.
• Obama Tells CIA To Prepare For Cyber War With Russia.
• What Triggers Collapse?
• Furious Trump Lashes Out At Accusers, As Witness Emerges Refuting Assault.
• Scenes From The Apocalypse - Mass Immigration Ruins The Streets Of France. (video)
• China As A Leading Economic Indicator. (graph)
• Anti-Catholics & Elitist Bigots.
• One Hedge Fund's Market Summary: "The Good, The Bad, And The Ugly"... And An Important Chart.
• "This Rarely Ends Well" - Traders Fear Ominous Divergence In S&P 500. (graph)
• JPM Responds To Yellen's "Dovish" Speech: "We Continue To Expect The Next Hike In December".
• It's Deplorable! Less Than 1 In 3 Are 'Satisfied' With Hillbama's America. (graph)
• US Budget Deficit Spikes 34%, Grows For The First Time Since 2009. (graph)
• Weekend Reading: Market Breaks Support, Time To Worry? (graph)
• What A Week: Bonds Battered, Copper Clubbed, Stocks Slide As China Currency Crumbles. (graph)

Business Insider:

• The US is reportedly considering a cyber attack to 'embarrass' Russia over alleged hacking.
• TRUMP: 'I think we should take a drug test prior to the debate'.
• Tinder culture has taken over, and now it's killing retail.
• A tectonic shift just occurred in a $2.65 trillion investment industry.
• ALBERT EDWARDS: Forget the pound, the renminbi is the currency we should be really worried about.
• How the Obama administration helped increase the cost of air travel.

The Telegraph:

• Beware, a long period of belt-tightening is in prospect.

FAS: 

• Merkel Said to Seek More Sanctions on Russia Over Syria. German Chancellor Angela Merkel to seek more sanctions at European Council meeting on Thursday and Friday, citing officials.

21st Century Business Herald:

• PBOC Said to Summon Big Banks Over Mortgage Risk. PBOC called a meeting of senior officials at state-owned and commercial banks on Oct. 12 to discuss property market lending, citing people familiar with the matter. PBOC officials said residential mortgage loan growth is currently too fast, and an overheated property market could affect economic stability. Mortgage loans in some regions have doubled since the end of last year. In some areas, mortgages account for 90% of new lending.

Market Week in Review

• S&P 500 2,136.30 -.77%*

The Weekly Wrap by Briefing.com.

*5-Day Change