Bear Radar

Style Underperformer:

• Mid-Cap Value -.4%

Sector Underperformers:

• 1) Gold & Silver -2.2% 2) Homebuilders -1.7% 3) REITs -1.2%

Stocks Falling on Unusual Volume: 

• WYNN, SOHU, DVMT, VMW, ADNT, ALDR, OLED, RDFN, MYGN and TMST

Stocks With Unusual Put Option Activity:

• 1) XHB 2) PHM 3) WYNN 4) HCA 5) MNST

Stocks With Most Negative News Mentions:

• 1) WYNN 2) SOHU 3) CRR 4) PM 5) ARDM

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.1%

Sector Outperformers:

• 1) Gaming +1.4% 2) Biotech +.7% 3) Road & Rail +.6%

Stocks Rising on Unusual Volume:

• IMMR, KS, DPS, ABLX, PTGX, MATX, PTCT, CISN, LMT, FOLD, LVS, IOVA, KEM, GILD, ENVA, VRTV, SNDX, INAP, EDIT, NFLX, FBR, RCKT, ABAX, MDXG, AKCA and WGO

Stocks With Unusual Call Option Activity:

• 1) PXD 2) HOG 3) OIH 4) AMTD 5) LEN

Stocks With Most Positive News Mentions:

• 1) PTCT 2) AMD 3) NOC 4) MCD 5) STX

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +9.9% Above 100-Day Average
• 1 Sector Rising, 9 Sectors Declining
• 20.5% of Issues Advancing, 77.5% Declining
• 218 New 52-Week Highs, 169 New Lows
• 66.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.2%
• Vix 12.7 +14.2%
• Total Put/Call .73 +7.6%
• TRIN/Arms .64 +31.1%

Monday Watch

Today's Headlines

Bloomberg:

• China Ousted as Asia's No. 1 Buyer of U.S. Commercial Property. Singapore ousted China to become the biggest Asian investor in U.S. commercial property last year. It was the first time since 2012 that the city outspent China, according to data from Real Capital Analytics and Cushman & Wakefield Inc. Deals by Chinese investors plunged 66 percent to $5.9 billion as regulators cracked down on capital outflows.

• China Stock Euphoria Enters New Stage as Laggards Start to Surge.

• Massive Cryptocurrency Heist Puts Spotlight on Exchange Security. The episode, disclosed by Coincheck executives at a hastily arranged press conference on Friday night, comes at an awkward time for Japanese regulators, who began rolling out a new licensing system for cryptocurrency venues just a few months ago. It has heightened calls for stricter oversight and may influence a closely watched debate in neighboring South Korea over whether to ban digital-asset exchanges outright.

• Wynn Macau Shares in Focus After U.S. Rout Following Reports Chairman Sexually Harassed Women. (video)

• Asian Equity Rally Ekes Out More Gains; Bonds Flat. Asian equities nudged higher at the start of Monday trading, building on this year’s strong start that’s pushed the regional benchmark index to a record high as investors bet an expansion in corporate earnings won’t falter any time soon. Gains in stocks in South Korea and Australia on Monday helped extend the MSCI Asia Pacific Index’s rise this year to 7.8 percent, on course for its best month since March 2016. Japanese equities edged higher. The S&P 500 Index surged on Friday to a fresh all-time high. The yen steadied after the Bank of Japan clarified comments from Governor Haruhiko Kuroda in Davos on Friday did not mean a change to its forecast. The dollar dipped. Japan’s Topix index rose 0.1 percent as of 9:08 a.m. in Tokyo. South Korea’s Kospi index gained 0.6 percent. Australia’s S&P/ASX 200 Index climbed 0.3 percent. Futures on Hong Kong’s Hang Seng Index rose 0.3 percent. Futures on the S&P 500 Index were up 0.1 percent after the underlying gauge climbed 1.2 percent Friday.

• Five Things You Need to Know to Start Your Day. (video)

Wall Street Journal:

• The Unseen Toll of a Terror Attack. New York’s December Port Authority bombing killed no one, but witnesses’ psychological pain endures.

• Trump to Soften Tone in State of the Union, Pursuing Immigration Deal. President will give ‘forward-looking’ and bipartisan speech, White House says.

• President Trump Hints at Retaliation Against EU for Unfair Trade Policies. During an interview to be aired later Sunday, the U.S. president said ‘I’ve had a lot of problems with European Union...from a trade standpoint’.

• Do School Vouchers Work? Milwaukee’s Experiment Suggests an Answer. A Wall Street Journal analysis of the school system’s 27-year-old program suggests the concept works best when private institutions limit the number of public students.

• Intel(INTC) Warned Chinese Companies of Chip Flaws Before U.S. Government. Decision to disclose issue to select few customers, including Lenovo and Alibaba, has ripple effects through security and tech industries.

MarketWatch.com:

• Bitcoin and blockchain’s broken promises. Cryptocurrencies in general are based on a false premise. According to its promoters, bitcoin has a steady-state supply of 21 million units, so it cannot be debased like fiat currencies. But that claim is clearly fraudulent, considering that it has already forked off into three branches: bitcoin cash, litecoin, and bitcoin gold. Besides, hundreds of other cryptocurrencies are invented every day, alongside scams known as “initial coin offerings,” which are mostly designed to skirt securities laws. So “stable” cryptos are creating money supply and debasing it at a much faster pace than any major central bank ever has.

Fox News:

• Iran spends billions on weapons programs, terrorism while ignoring Iranians' basic needs, report finds. (video)

CNBC: 

• Earnings have been ‘unambiguously positive,’ and it’s going to get even better, says JPMorgan. (video)

• Trump hits back at Jay-Z by touting black unemployment numbers.

• What to watch from health care earnings.

• Trump gears up for $1 trillion infrastructure plan, but GOP lawmakers push back on the idea of a gas tax.

• 14 money lessons rich parents teach their kids.

• Populist Mexican presidential candidate Lopez Obrador spooking investors as NAFTA talks heat up.

Zero Hedge:     

• Trump Ignores DOJ Warning, Notifies Sessions He Wants FISA Memo Released.

• Gowdy Drops Big Hints About FISA Memo: Dossier Funding, FBI Misuse, And Hillary's Relationship To Chris Steele.

• Mexico Police Find Enough Fentanyl To Kill Millions En Route To US Border.

• Introducing The "Polar Silk Road" - China's Latest Arctic Power Grab.

• DOJ Withholding Over 85% Of Strzok-Page FBI Texts From Congressional Investigators.

• Meet Europe's Latest Threat: She Is A Blue-Eyed Blonde Who Wants "Finland First".

Business Insider: 

• Amazon(AMZN) has created a new computing platform that will future-proof your home.

• Companies like Amazon(AMZN) and Starbucks(SBUX) want to kill cash — and it could be a huge blow to the most vulnerable Americans.

• Trump will reportedly ask for $716 billion in defense spending in 2019 budget.

• Mexico will unleash a new wave of troops to fight crime after a year of record-level violence.

Night Trading

• Asian indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 62.75 -.75 basis point.

• Asia Pacific Sovereign CDS Index 10.75 +.25 basis  point.

• Bloomberg Emerging Markets Currency Index 76.51 +.04%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.17%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (AMG)/4.52

• (D)/.89

• (LMT)/4.03

• (STX)/1.35

• (SOHU)/-1.72

• (CR)/1.17

• (GGG)/.36

• (IEX)/1.07

• (IDTI)/.41

• (SANM)/.48

• (WERN)/.39

Economic Releases
8:30 am EST

• Personal Income for December is estimated to rise +.3% versus a +.3% gain in November. 

• Personal Spending for December is estimated to rise +.4% versus a +.6% gain in November.

• PCE Core MoM for December is estimated to rise +.2% versus a +.1% gain in November.
  

10:30 am EST

• Dallas Fed Manufacturing Activity for January is estimated to fall to 25.3 versus 29.7 in December.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German Import Price report and the Japan Unemployment rate report could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as positive earnings outlooks, oil gains and economic optimism offset profit-taking, technical selling and rising long-term rates. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• S&P 500 Surges for a Fourth Week. Waiting for an entry point in the stock market just isn’t working. The latest proof: amid the best start to a year ever measured in global equities, the S&P 500 has now spent longer trading within 5 percent of its all time high than ever before. Add it to the list of superlatives piling up in a market that has now done in a month what Wall Street thought would take a year. Rising 2.2 percent over the last five days, the benchmark sits at 2,872.87 -- higher than the average target of strategists tracked by Bloomberg as recently as December. Twenty-six days in and equities have yet to notch a down week. They’ve risen more than 7 percent and posted more up sessions -- 14 -- than any January since 1989. At these levels, stocks are nearing the most overbought point ever, making it hard for even the most bullish analysts to keep up. For the week, the S&P 500 rose 63 points. The Dow Jones Industrial Average added 545 to 26,616.71. The Nasdaq Composite Index climbed 2.3 percent to 7,505.77, bringing its year-to-date advance to 8.7 percent. The MSCI All-Country World Index increased 2.1 percent to 550.32, extending its 2018 gain to 7.3 percent to leave it on track for its largest January rally ever.

• Nafta Said to Gain Steam With Agreement on Anti-Corruption Moves. Talks to update Nafta took a step forward after negotiators in Montreal agreed to measures aimed at preventing corruption, the first official “chapter” completed since October, said five people with knowledge of the process. The efforts to clamp down on graft and bribery had been pushed by Mexico as a new issue for the 24-year-old North American Free Trade Agreement. The measures were agreed to on Friday, according to the people, who asked not to be identified speaking before a public announcement.

• Bankers, Policy Makers at Davos Revel in ‘Sweet Spot’ Economy. (video) The global elites have rediscovered their animal spirits. As the World Economic Forum drew to a close in the Swiss ski resort, the overarching mood of the executives, policy makers and investors was that their economies are in fine shape and that stock markets have every reason to extend their run. "Let’s celebrate what could go right for the moment because we are in a sweet spot," International Monetary Fund Managing Director Christine Lagarde said on the closing panel discussion.

• Chinese ADRs Surpass 2007 Record, Jumping 50% in 12 Months.

• Trump Moving On to Infrastructure Push. President Donald Trump plans to use Tuesday’s State of the Union address to build momentum for sweeping legislation on infrastructure and immigration that could buoy the White House and fellow Republicans ahead of crucial midterm elections. Emboldened by a booming economy and victory in his stare-down with Senate Democrats over government funding, Trump will make the case that the Republican tax cuts passed in December and his administration’s efforts to curb regulations are drawing investment to the U.S. and creating jobs, said a White House official who discussed the speech on condition of anonymity.

Wall Street Journal: 

• Trump to Call for Bipartisan Approach in Divided Washington. President’s first State of the Union address will come at a time of considerable rancor on Capitol Hill.

• Medical Miracles From FDA Inefficiency. The economist behind the ‘priority review voucher,’ which advances treatments for neglected diseases. 

• Thank You for Tax Reform. Fourth quarter GDP shows the economy needed a growth boost.

• Saudis Release Prince al-Waleed, One of the World’s Richest Men. Saudi officials say the prince reached a settlement that allows him to remain chairman of Kingdom Holding.

Barron's:

• Had bullish commentary on (GS), (SNA), (DVN), (LNC), (FDX) and (JPM).

MarketWatch.com:

• Invest in 5 megatrends that can pay off without a bull market in stocks.

• These 27 S&P 500 stocks are blowing away the market with gains of 15% or more this month.

Fox News:

• Hillary Clinton praises 'activist b----es supporting b----es' in online video. (video)

• Trump decries 'murderous attack' that left scores dead and injured in Kabul. (video)

• Trump critical of Theresa May on Brexit, says he would have been 'tougher'. (video)

CNBC:

• Trump's first State of the Union will focus on the economy, trade and immigration.

• Four triggers could cause a huge cryptocurrency crash.

• Health-care insurers are beefing up their apps to make you like them more.

• Every One of the World’s Big Economies Is Now Growing.

• Telegram’s ICO is attracting the industry’s newer crypto investors while firms like Andreessen Horowitz sit this one out.

• Fixing Obamacare is nearly as important to Republican voters as paying for Trump's border wall.

• NSA updates core values on its website, but deletes references to ‘honesty’ and ‘transparency’.

• Google(GOOGL) Home couldn't tell users who Jesus Christ is — here's why it matters.

• These companies are paying bonuses with their tax savings. (video)

Zero Hedge:

• Clinton, Podesta And Others In Senate Crosshairs Over Dossier; Given Two Weeks To Respond.

• The Number Of Teens Attempting "The Tide Pod Challenge" Is Skyrocketing.

• Steve Wynn Resigns As GOP Finance Chair. 

• Russian Parliament Set To Make The CryptoRuble Legal Tender.

• Illinois Unveils Another Shocker: Sell A Record $107 Billion In Debt To Fund Insolvent Pensions. 

• CNN Turkey Fake News Goes Viral: 'American Sniper' Star Killed In Syria, Pentagon Forced To Deny.

• Feds Charge Democrat Florida Mayor With Money Laundering, Taking Bribes From "Bunch Of Russians".

• Hillary Clinton Refuses To Apologize For Not Firing Adviser Accused Of Harassment.

• Turkey Demands US Forces Leave Syria's Manbij Immediately.

• USDJPY Spikes After BoJ Walks Back Kuroda's Comments. (graph)

• DoJ Blasts Berkeley: "Will Not Stand Idly By" As College Crushes Free Speech.

• Weekend Reading: What Could Possibly Go Wrong?

• Stocks Storm To Best Start Since 1987 Amid Dollar-Devastation. (graph)

Business Insider:

• These simple upgrades can make even older computers run like new.

• At least 95 dead, 150 wounded in Afghanistan after suicide blast rips through capital.

• GOLDMAN SACHS(GS): These 14 stocks will crush the market as wages rise.

• China's military is turning its aggressive South China Sea tactics on Japan.

• Japanese crypto exchange set to repay victims of a $400 million hack.

• UBS: These 15 companies will benefit the most from tax reform.