Bear Radar

Style Underperformer:

• Large-Cap Value -.4%

Sector Underperformers:

• 1) Homebuilding -1.1% 2) Airlines -1.0% 3) Banks -.8%

Stocks Falling on Unusual Volume: 

• SILC, CTT, SIG, HTHT, NTLA, TISI, SFIX, ESNT, EVHC, ICHR, SUPN, MDGL, RDN and NTLA

Stocks With Unusual Put Option Activity:

• 1) IMGN 2) SIG 3) SIRI 4) KEY 5) RSX

Stocks With Most Negative News Mentions:

• 1) INOV 2) TTWO 3) CMC 4) UAL 5) CLF

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth unch.

Sector Outperformers:

• 1) Internet +1.3% 2) Disk Drives +.5% 3) Oil Service +.5%

Stocks Rising on Unusual Volume:

• RKDA, PETQ, SNDX, CWH, AOI, CAL, CLLS, MDB, HGV, LFIN, FANH, RDNT, ARGX, DKS, CI, FLY, PUK, MRSN, GAIA, CCXI, FHB, PENN, NTNX, ZEN, NOAH, IIVI and F

Stocks With Unusual Call Option Activity:

• 1) HIG 2) SGMS 3) CCL 4) IGT 5) PYPL

Stocks With Most Positive News Mentions:

• 1) RFIL 2) MNGA 3) CWH 4) VRX 5) MDB

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -10.9% Below 100-Day Average
• 9 Sectors Rising, 1 Sector Declining
• 53.1% of Issues Advancing, 42.7% Declining
• 27 New 52-Week Highs, 49 New Lows
• 50.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.3%
• Vix 16.2 -.7%
• Total Put/Call .9 +5.8%
• TRIN/Arms .70 -49.5%

Wednesday Watch

Evening Headlines

Bloomberg:

• Scandal Threatens to Derail Abe’s Economic Agenda. The Japanese government’s plans for the economy -- an area of stability -- have been thrown into disarray by a cronyism scandal. The controversy stemming from the sale of land to an educational institution with ties to Prime Minister Shinzo Abe threatens to derail March’s crowded policy calendar. Opposition parties are boycotting hearings on the budget for the fiscal year starting April 1, parliament has yet to confirm the Bank of Japan’s new leadership team, and the finance minister’s trip next week to a Group of 20 meeting in Argentina is in doubt.

• Asia Stocks Drop Amid Trump Team Concerns, Trade. U.S. Treasuries held gains from Tuesday after a report showed U.S. inflation remained contained. Equity indexes in Japan, South Korea and Australia declined after the S&P 500 Index lost 0.6 percent. The sudden firing of U.S. Secretary of State Rex Tillerson took some by surprise less than a week after top economic adviser Gary Cohn resigned from the White House. The dollar was little changed, while West Texas oil was holding above $60. Japan’s Topix index fell 0.4 percent as of 9:56 a.m. in Tokyo. Australia’s S&P/ASX 200 Index declined 0.7 percent. Hang Seng Index futures slipped 0.7 percent. S&P 500 Index futures fell 0.1 percent after the underlying gauge dropped 0.6 percent Tuesday.

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

• Deutsche Bank's(DB) Ruskin Sees Stocks Getting 'Nice Lift' From Dollar. (video)

• Broadcom(AVGO) Will Abandon Attempt to Acquire Qualcomm(QCOM).

• Tesla(TSLA) Treasurer and VP of Finance Leaves the Company.

• Hedge Funds Seek Fixes to Credit Default Swaps After Being Stung by Loopholes.

Wall Street Journal:

• Pompeo’s Promise at State. Trump gets a top diplomat who shares his policy views.

• Donald Trump Looks at Wall Prototypes in California, Attacks Gov. Jerry Brown. President makes his first visit to the most populous state, which he lost by some four million votes.

• Ten Years After the Bear Stearns Bailout, Nobody Thinks It Would Happen Again. Key players have spent the last decade arguing about what was done, defending past decisions and wondering how such a crisis would play out today.

• Gina Haspel, Nominee for CIA, to Face Questions Over Interrogation Techniques. Career intelligence officer would be first woman to lead spy agency.

• Rex Tillerson Is Out as Secretary of State; Donald Trump Taps Mike Pompeo. Gina Haspel will be nominated to lead the CIA.

MarketWatch.com:

• Netflix(NFLX) is poised to enter the TV news business.

Fox News: 

• Polls close in special Pennsylvania House race between Lamb, Saccone. (video)

• ICE Director Fires Back at Nancy Pelosi: 'How Dare You' Call ICE Agents 'Cowardly'. (video)

CNBC:

• US hits back at Russia claims, says Moscow is 'complicit' in Syrian atrocities.

• Trump considers indefinite tariffs, investment restrictions against China: Source. (video)

• YouTube will add Wikipedia links debunking conspiracy theory videos.

• Russia says it is not responding to British ultimatum on nerve toxin attack for now.

• Stocks making the biggest moves after hours: Stitch Fix & Time Warner.

Zero Hedge:  

• Russia Threatens UK: "One Does Not Give 24Hrs Notice To A Nuclear Power".

• Showdown With California Looms As EPA Refuses To Extend Fuel-Economy Rules.

• New Jersey Prepares To Raise Taxes On "Almost Everything" As It Nears Financial Disaster.

• The Democrats' Russian Hysteria Summarized In 2 Pelosi Press Statements.

• There's At Least 3.8 Trillion Reasons Why Gundlach Might Be Wrong About Bonds. (graph)

• WTI/RBOB Rise After Smaller Than Expected Crude Build. (graph)

• Bankrupt Baltimore 'Somehow' Finds Money To Fund Lawyers For Illegal Immigrants.

• Rexit Rout: Gold Pops As Tech Stocks, Bond Yields, Dollar Tumble. (video)

Night Trading 

• Asian equity indices are -1.0% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.0 +.5 basis point. 

• Asia Pacific Sovereign CDS Index 11.0 unch.

• Bloomberg Emerging Markets Currency Index 75.45 +.04%.

• FTSE 100 futures -.27%.

• S&P 500 futures -.22%.

• NASDAQ 100 futures -.47%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (EXPR)/.32

• (SHLD)/1.16

• (SIG)/4.20

• (DDD)/.03

• (CTRP)/.16

• (SMTC)/.41

• (TDW)/-.72

• (WSM)/1.61

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for February is estimated to rise +.3% versus a -.3% decline in January. 

• Retail Sales Ex Autos MoM for February is estimated to rise +.4% versus unch. in January.

• Retail Sales Ex Autos and Gas for February is estimated to rise +.4% versus a -.2% decline in January.

• PPI Final Demand MoM for February is estimated to rise +.1% versus a +.4% gain in January.

• PPI Ex Food and Energy MoM for February is estimated to rise +.2% versus a +.4% gain in January. 

10:00 am EST

• Business Inventories for January are estimated to rise +.6% versus a +.4% gain in December.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,231,440 barrels versus a +2,408,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -452,890 barrels versus a -788,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,558,110 barrels versus a -559,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.12% versus a +.2% gain prior.
  

Upcoming Splits

• (AFL) 2-for-1

Other Potential Market Movers

• The China Retail Sales/Industrial Production report, Eurozone Industrial Production/CPI reports and the weekly MBA Mortgage Applications report could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by technology and industrial 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 day.

Stocks Reversing Lower into Final Hour on Trade War Fears, Oil Decline, Profit-Taking, Tech/Gaming Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.0 +1.5%

• Euro/Yen Carry Return Index 137.64 +.66%

• Emerging Markets Currency Volatility(VXY) 7.67 -.78%

• S&P 500 Implied Correlation 40.25 -.94%

• ISE Sentiment Index 80.0 -13.04%
  

• Total Put/Call .87 +2.35%

• NYSE Arms 1.35 +54.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.12 +.4%
  

• America Energy Sector High-Yield CDS Index 396.0 -.15%

• European Financial Sector CDS Index 49.59 +.75%

• Italian/German 10Y Yld Spread 137.50 +.5 basis point
  

• Asia Pacific Sovereign Debt CDS Index 10.94 -.5%

• Emerging Market CDS Index 115.18 +1.41%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.21 +.02%

• 2-Year Swap Spread 32.50 +1.0 basis point

• TED Spread 39.50 -2.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -29.5 -2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.43 +.04%
• 3-Month T-Bill Yield 1.71% +4.0 basis points
  

• Yield Curve 58.5 -2.0 basis points

• China Iron Ore Spot 68.89 USD/Metric Tonne +.69%

• Citi US Economic Surprise Index 43.80 -1.8 points

• Citi Eurozone Economic Surprise Index -27.40 -1.6 points

• Citi Emerging Markets Economic Surprise Index 32.30 -1.6 points

• 10-Year TIPS Spread 2.09 -2.0 basis points
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -323 open in Japan 
• China A50 Futures: Indicating -87 open in China

• DAX Futures: Indicating -69 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/tech sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.2%

Sector Underperformers:

• 1) Social Media -1.6% 2) Gaming -1.3% 3) Internet -1.3%

Stocks Falling on Unusual Volume: 

• BL, FANH, NETE, MYGN, QCOM, MRVL, CNX, TRHC, AQUA, VCRA and MDGL

Stocks With Unusual Put Option Activity:

• 1) SHY 2) SN 3) SIG 4) CI 5) KEY

Stocks With Most Negative News Mentions:

• 1) ADXS 2) TLYS 3) NCMI 4) VCRA 5) GE

Charts:

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