Bear Radar

Style Underperformer:

• Mid-Cap Value +1.7%

Sector Underperformers:

• 1) Gold & Silver -2.5% 2) Gaming +.3% 3) Oil Service +.6%

Stocks Falling on Unusual Volume: 

• WBAI, TMH, CHRS, EPAM, HSNI, ALXN, ABCO, PINC, CNNX, QRVO, PEGI, BIS, ZBIO, ZEUS, FLT, TAHO, OMI, TIS, WRK, SHEN, GOLD, XLRN and THG

Stocks With Unusual Put Option Activity:

• 1) ALXN 2) DE 3) CMI 4) FDX 5) ESRX

Stocks With Most Negative News Mentions:

• 1) GPRO 2) ABCO 3) OMI 4) CEMP 5) ABDC

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +2.2%

Sector Outperformers:

• 1) Hospitals +6.7% 2) Steel +4.4% 3) HMOs +3.6%

Stocks Rising on Unusual Volume:

• DTLK, NILE, IONS, FDC, SYY, HAE, FEYE, CC, IMPV, NEWR, DPLO, MFS, AAOI, CGNX, ATSG, NEWR, BOOT, ABBV and MASI

Stocks With Unusual Call Option Activity:

• 1) LNG 2) DG 3) ERX 4) DEPO 5) SYF

Stocks With Most Positive News Mentions:

• 1) LB 2) XRX 3) FTR 4) CERN 5) MTDR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +2.9% Above 100-Day Average
• 10 Sectors Rising, 0 Sectors Declining
• 85.5% of Issues Advancing, 12.9% Declining
• 60 New 52-Week Highs, 17 New Lows
• 42.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 32.1%
• Vix 18.5 -17.8%
• Total Put/Call 1.25 -8.1%
• TRIN/Arms .81 -22.0%

Monday Watch

Today's Headlines

Bloomberg:

• China's Moves to Cool Property Prices May Be Working. The push by China’s policy makers to rein in property bubbles looks to be getting traction, according to early indicators from the nation’s biggest cities. Beijing home sales volume plunged 41 percent year-on-year last month while Shanghai’s slumped 18 percent, China Real Estate Information Corp. data show, after new purchase restrictions and tightened mortgage lending. Transactions fell 50 percent in smaller cities. Now policy makers must balance deflating property prices with safeguarding the expansion. Efforts to curb excessive gains could cut 0.6 percentage point from 2017 economic growth, and as much as 1 point with aggressive national tightening, according to Morgan Stanley. 
• Hong Kong Home Prices Set to Plunge on Policy Change. Hong Kong leaders’ surprise move to cool the world’s least affordable home market is set to spur an immediate plunge in prices and transactions as buyers and sellers hit the pause button. Louis Chan, chief executive of the residential unit of Centaline Property Agency Ltd., sees transaction volumes plunging by 60 percent to 70 percent in the next three months, and now expects a 5 percent to 8 percent drop in prices, after previously projecting an increase in that range. Ricacorp Properties Ltd.’s Willy Liu said transactions will drop 30 percent to 40 percent in the next two months and prices will fall 5 percent. 
• Korea Divisions Boost Odds Park Will Resist Calls to Step Down. One of the few bright spots for President Park Geun-hye as she fights to stay in power: South Koreans are split on who should replace her. Tens of thousands of people rallied in Seoul on Saturday to demand that Park step down over an influence-peddling scandal that has spawned protests across the nation. Authorities on Sunday arrested two of her former aides for allegedly helping Choi Soon-sil, a long-time friend of Park who is facing charges over using her relationship with the president for personal gain.
• May Is Steadfast on Brexit Timing as U.K. Schism Deepens. Theresa May insisted Britain’s exit from the European Union won’t be obstructed by judges or lawmakers as the backlash after last week’s constitutional ruling deepened the country’s political schism. May said her government had a strong legal case to make on appeal. “While others seek to tie our negotiating hands, the government will get on with the job of delivering the decision of the British people,” the prime minister said in the Sunday Telegraph, her first public remarks since the High Court declared that lawmakers should vote on the start of negotiations with the EU. “MPs and peers who regret the referendum result need to accept what the people decided.” 
• U.S. Stock Futures Jump as FBI Letter Seen Aiding Clinton Chance. December contracts on the S&P 500 Index surged 1.4 percent to 2,108.25 at 6:50 p.m. in New York. The cash index fell 0.2 percent Friday to cap a ninth straight slide that’s erased $725 billion in value from U.S. equities. Dow Jones Industrial Average futures added 199 points to 17,999.
• Oil Rebounds Before U.S. Election Amid OPEC Deal Uncertainty. Oil rebounded amid a broader market rally ahead of the U.S. election as Algeria remains confident OPEC will set output quotas at its next meeting to manage production. Futures advanced as much as 1.3 percent in New York as equities climbed after the Federal Bureau of Investigation said it maintains the view that Hillary Clinton’s handling of her e-mails wasn’t a crime. There is no going back on the agreement set in Algiers in September to curb output, Algeria’s energy minister said, according to state-run news agency APS.

Wall Street Journal:

• China Might Finally Give Wall Street What It Wants...20 Years Late. Beijing is considering allowing Wall Street banks to run their own investment-banking businesses without a local partner.
• U.S.-Backed Forces in Syria Launch Offensive to Seize ISIS Stronghold Raqqa. Operation comes at same time as battle for Islamic State’s Iraqi stronghold of Mosul.
• U.S. To Launch New Chinese Steel Probe. Commerce Department to investigate allegations Chinese companies laundered steel through Vietnam.

Fox News:

• FBI sends letter to Congress saying email review completed, decision not to prosecute Clinton stands. (video) FBI Director James Comey said Sunday that the agency has reviewed all of the Hillary Clinton emails recently discovered in an unrelated case and that his conclusion in July not to prosecute Clinton after the FBI’s original investigation into her use of private email server still stands. Comey informed Congress on Oct. 28 that the agency would in the unrelated case review additional emails related to Clinton’s time running the State Department from 2009 to 2013. 
• Clinton aide says Foundation paid for Chelsea’s wedding, WikiLeaks emails show. (video)

Zero Hedge:

• Hillary Cleared As FBI Folds Again: Comey Says "Conclusions Unchanged From July" On Clinton Email Review.
• Trump Reacts: "It's A Rigged System, Hillary Is Protected"; Paul Ryan Issues Statement On FBI Decision. (video)
• "We Now Know Why Cheryl Didn't Want Hillary To Run" - Wikileaks Releases Part 32 Of Podesta Emails.
• Meanwhile, In Greece...
• Virginia Governor Restores Voting Rights To 60,000 Ex-Cons; 4.5x More Than Expected.
• Yellen's Conundrum: Forestall Monetary Mayhem Or Release Political Pandemonium.
• Not Your "Average" Test For Stocks Here. (graph)
• Dallas "Pension Fund Panic" As Mayor Warns Of 130% Property Tax Hike To Avoid Collapse.
• Doug Band Accuses Chelsea Of Using Clinton Foundation Money To Pay For Her Wedding.

Business Insider:

• The Clinton campaign appears to be in full-blown panic mode over a state that hasn't gone red in 2 decades.
• Paul Ryan on FBI clearing Hillary Clinton again: Vote for Donald Trump.
• The wealthiest Americans have a new attitude about homebuying — and it's led to a crisis in the luxury market.

Night Trading

• Asian indices are +.25% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 117.75 -1.0 basis point.
• Asia Pacific Sovereign CDS Index 36.25 unch.
• Bloomberg Emerging Markets Currency Index 72.06 unch.
• S&P 500 futures +1.21%.
• NASDAQ 100 futures +1.37%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (CTSH)/.84
• (DF)/.36
• (FDC)/.34
• (MGM)/.17
• (BID)/-.57
• (VSH)/.24
• (ANDE)/.20
• (HTZ)/2.75
• (MAR)/.88
• (MCHP)/.87
• (PCLN)/29.88
• (TDW)/-1.11

Economic Releases

10:00 am EST

• The Labor Market Conditions Index for October.

3:00 pm EST

• Consumer Credit for September is estimated to fall to $17.5B versus $25.873B in August.
  

Upcoming Splits

• (MNST) 3-for-1

Other Potential Market Movers

• The Fed's Evans speaking, Eurozone Retail Sales report, Baird Industrial Conference and the (FLR) Investor Day could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial 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

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

BOTTOM LINE: I expect US stocks to finish the week modestly higher on diminished election uncertainty, technical buying, short-covering, yen weakness, falling European/Emerging Markets/US High-Yield debt angst and bargain-hunting. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• U.S. Stocks Post Longest Slide Since 1980, Bonds Rise Amid Angst. U.S. stocks posted their longest slide since 1980, while Treasuries rallied after data showing progress in the American labor market did little to soothe anxiety over the presidential election. Oil slumped. The S&P 500 Index dropped for a ninth straight day, a gauge of equity volatility had the longest stretch of gains on record and Treasuries climbed the most since September ahead of next week’s vote. All the jitters sent the dollar down after a brief advance that followed data showing U.S. jobs rose at a steady pace in October, supporting a Federal Reserve hike next month. Oil sank as hopes faded that OPEC will be able to implement a deal to cut output.
• European Gauge of Bond-Market Stress Approaches Highest in 2016. A measure of euro-area bond-market stress is flashing red. The yield difference between German and Italian 10-year bonds approached the widest in 2016 this week as investors sought the region’s safest assets. As two of the euro-zone’s most-liquid sovereign-debt markets, speculating on the so-called yield spread may be the best channel for investors to express their view with the U.S. presidential election next week and Italy’s constitutional referendum looming in December.
• Thousands of Protesters Demand That SKorea's President Quit. Tens of thousands of South Koreans poured into the streets of downtown Seoul on Saturday, using words including "treason" and "criminal" to demand that President Park Geun-hye step down amid an explosive political scandal.
• Human Shields, Barricades Slow Iraqi Advance Into Mosul. Islamic State fighters launched counterattacks Saturday against Iraqi special forces in eastern Mosul, emerging from populated areas deeper in the city to target the troops with mortars and suicide car bombs in clashes that raged late into the night. Artillery shelling thundered across the city as snipers traded fire from rooftops and civilians emerged from the front lines waving white flags. There were fresh indications that other residents were being held back by the militants to be used as human shields.
• Oil Tycoons Lose Seven Months of Gains as OPEC Hopes Fade: Chart.

Barron's:

• Had bullish commentary on REITs, (MJN) and (ALSN).

MarketWatch.com:

• An unclear election result would be worst outcome for stocks.

Fox News:

• On final Saturday, Clinton brings out the stars, while Trump sticks with outsider, change-maker role. (video)

CNBC:

• David Stockman warns both Trump and Clinton could lead to 25% sell-off. (video)

Zero Hedge:

• Hillary Accepted Qatar Money Without Notifying Government, While She Was Head Of State Dept.
• Leaked Clinton Foundation "Smoking Gun" Memo Admits It Was Breaking The Law.
• US 'Military' Hackers "Prepare The Battlefield": Breach Russia's Backbone Ahead Of Possible Election Disruption.
• Wikileaks Releases Part 31 Of Podesta Emails: Total Is Now 50,408.
• Wikileaks Releases Part 30 Of Podesta Emails: Total Is Now 47,834.
• ISIS Calls For "Slaughter Of Americans" On Election Day.
• Russia Threatens Retaliation If Washington Engages In "State Cyberterrorism".
• Goldman(GS) Fears "Persistent Headwind To Growth" As State/Tax Revenues Tumble.
• The State Of The Debt Union: Red Vs Blue States.
• Crushing The $50 Trillion Sideline Cash Conundrum.
• FANG Stocks Lose Over $100 Billion In A Week.
• Commuter-In-Chief: Obama Cuts Sentences Of 72 More Drug Dealers; Total Exceeds Previous 11 Presidents Combined.
• Iranian Revolutionary Guard Commander Boasts That The US In "Strong Decline".
• Demystifying The Chinese Yuan.
• John Paulson Had Another Terrible Year; This Is How Everyone Else Did.
• Obamacare Is Raising Premiums And Lowering Employment.
• Former Treasury Secretary Summers Calls For End Of Fed Independence.
• Weekend Reading: Markets Send A Warning.
• Crude Carnage Slams Stocks To Longest Losing Streak In 36 Years. (graph)

Business Insider:

• Italy says it’s established 'a direct link’ between migrant traffickers and Islamic terrorist groups.
• NATE SILVER: 'There’s been a potential breach' of Hillary Clinton's 'electoral firewall'.
• GIULIANI: 'There's a revolution going on inside the FBI, and it's now at a boiling point'.
• Starbucks just signaled a terrifying sign for the economy.
• Hong Kong is trying to prick its housing bubble.
• iPhone sales haven't bottomed out yet, says the most accurate Apple(AAPL) analyst.
• US intelligence officials warn of possible Al Qaeda attacks around Election Day in New York, Texas, and Virginia.
• Nearly 40 percent of millennials in one survey say they believe the election could be rigged.
• GOP congressman writes television executives, says he intends to 'request a hearing to explore network media bias'.
• The US government is prepared to respond to a possible Russian cyberattack on Election Day.

Le Soir:

• Junker Says Wallonia Exposed Serious EU Governance Problem. European difficulties with governance and democracy were exposed in recent problem in getting EU-Canada trade deal past Belgium's Wallonia region, EC President Jean-Claude Juncker said in an interview. "We have a real problem of governance in Europe," he said. "You cannot say to the Walloons or others, 'Shut up'," Juncker said. During a phone call with UK Prime Minister on Friday, Theresa May said her government "is continuing to think and act the same way and that the notitification for the decision to start exit negotiations will indeed take place before the end of March," Junker said.