Bull Radar

Style Outperformer:

• Small-Cap Value +1.2%

Sector Outperformers:

• 1) Gaming +3.5% 2) I-Banking +2.1% 3) Computer Hardware +1.5%

Stocks Rising on Unusual Volume:

• NOA, PRTK, VNET, TRI, XONE, ITUB, AA, WIFI, BILI, CBMG, CLVS, SFBS, GWPH, TPX, SERV, DERM, OPNT, RFP, VRAY, KRP, BHBK, TSU, CRH, LSXMK, COWN, UPLD, FOLD, TRI, XLNX, GM and EEFT

Stocks With Unusual Call Option Activity:

• 1) CENX 2) COG 3) LEN 4) KRE 5) XLNX

Stocks With Most Positive News Mentions:

• 1) WING 2) XLNX 3) KORS 4) AA 5) IR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +4.8% Above 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 60.4% of Issues Advancing, 36.1% Declining
• 41 New 52-Week Highs, 86 New Lows
• 46.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.4%
• Vix 11.4 -5.4%
• Total Put/Call .74 -6.3%
• TRIN/Arms .50 -31.6%

Wednesday Watch

Evening Headlines

Bloomberg:               

• How China's Peer-to-Peer Lending Crash Is Destroying Lives.  

• Second Poll Confirms Far-Right Candidate Is Rising in Brazil.

• Asian Stocks Kick Off Mixed; Dollar Holds Gains. Asian stocks began the day mixed Wednesday following a volatile U.S. session as investors weighed continuing concerns in Indonesia and Italy and strength in commodity prices. The dollar and Treasuries held on to modest gains. Japanese shares edged lower, while equities in Australia ticked higher. Shares in Hong Kong are seen recovering from the biggest one-day slide in a month, with the local dollar trading at the weak end of its band with the greenback. Indonesian assets remain in focus as rising oil prices add to souring sentiment that’s driven the rupiah down past 15,000 per dollar for the first time in 20 years. Crude oil futures steadied in New York around the highest level in almost four years. Japan’s Topix index slipped 0.2 percent as of 9:02 a.m. in Tokyo. Futures on Hong Kong’s Hang Seng rose 0.4 percent. Australia’s S&P/ASX 200 Index added 0.1 percent. The S&P 500 fell less than 0.1 percent. Futures were flat.

• Five Things You Need to Know to Start Your Day .  

• Trump Adviser Accuses Goldman of Partisan Points in Research.

• Jamie Dimon Says Shareholder Meetings Have Become ‘a Farce’.

• Juul in FDA's Sights as U.S. Rethinks Position on E-Cigarettes.  

• When It Comes to Rates, What Are Central Banks Going to Do Next? 

Wall St. Journal:

• Federal Reserve Rethinks How to Define Large Banks. 

• Fake News Comes to Academia.   
  

• Ricin Detected in Mail Sent to Pentagon Facility.   
  

• Brett Kavanaugh’s Righteous Anger.

• Apple(AAPL) Watch Series 4: Why I Finally Fell For This Wearable.

• Bots Manipulate Bitcoin Price in ‘Wild West of Crypto’.

• U.S. Catholics’ Support for Pope Plunges Amid Scandal.

MarketWatch.com:

• 20 small-cap U.S. companies expected to post the fastest sales growth.

Fox News:

• Anti-Kavanaugh protesters accosting senators tied to liberal billionaire Soros.

• FBI's Kavanaugh investigation could finish as soon as Wednesday, source reveals.

CNBC:       

• JC Penney taps former Joann Stores chief Jill Soltau as its CEO, sending shares up more than 10%.

• Trump's trade victories mean the White House can now 'focus all its ire on China'.

• Your next job interview could be with a robot.

• After-hours buzz: TPX, JCP & more. 

• Marijuana stock Tilray(TLRY) plunges 16% after PepsiCo CFO says company has no pot plans.

• Cramer flags the two tailwinds sending the stock market to record highs.

• Fed's Powell sees 'remarkably positive outlook' for economy that may be 'too good to be true'.

Zero Hedge:

• FBI Reportedly Done Tomorrow, Ford's Lawyers Complain.

• NYTimes Accuses Trump Of Making Hundreds Of Millions From Tax Dodges And "Outright Fraud": 11 Key Takeaways.

• Vancouver Home Sales Crash 44% As "For Sale" Inventory Soars.

• Kavanaugh "Gang Bang" Accuser Savaged By Ex-Weatherman Over "Penchant For Group Sex".

• More Holes Appear As Records Raise Questions About Ford's Double-Door Story.

• Uranium One: FBI Refuses To Release Three-Dozen Secret Memos Involving Clintons, Russia And Obama.

• Bezos' Decision To Raise Wages Is Largely A Machiavellian Distraction.

• WTI Holds Gains After Cushing Stocks Build Most Since March.

• Dow Hits Record High, Small Caps Crushed, BTPs Battered, & Bullion Bid.

Telegraph:      

• Italy angst grips markets as populists threaten to sue EU over budget clash. 

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 80.75 +1.25 basis points. 

• Asia Pacific Sovereign CDS Index 9.0 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.75 -.02%.

• FTSE 100 futures -.01%.

• S&P 500 futures -.07%.

• NASDAQ 100 futures -.10%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (AYI)/2.62

• (LEN)/1.37

After the Close:

• (PIR)/-.63

• (RECN)/.13

Economic Releases

8:15 am EST

• The ADP Employment Change for September is estimated to rise to 184K versus 163K in August.
  

10:00 am EST

• The ISM Non-Manufacturing Index for September is estimated to fall to 58.0 versus 58.5 in August.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +810,890 barrels versus a +1,852,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +786,560 barrels versus a +1,530,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,499,220 barrels versus a -2,241,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.48% versus a -5.0% decline prior.
  

Upcoming Splits

• (CASH) 3-for-1

Other Potential Market Movers

• The Fed's Evans speaking, Fed's Mester speaking, Fed's Harker speaking, Fed's Barkin speaking, Eurozone Services PMI report, Eurozone Retail Sales report, weekly MBA Mortgage Applications report, (WDAY) analyst day and the (HPQ) analyst meeting could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology and consumer shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Mostly Lower into Final Hour on Eurozone Debt Angst, Yen Strength, Profit-Taking, Retail/Road & Rail Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 12.0 unch.

• Euro/Yen Carry Return Index 136.47 -.57%

• Emerging Markets Currency Volatility(VXY) 10.26 +1.68%

• S&P 500 Implied Correlation 34.32 -1.15%

• ISE Sentiment Index 138.0 +58.6%
  

• Total Put/Call .80 -20.0%

• NYSE Arms .72 +16.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.16 +1.43%
  

• America Energy Sector High-Yield CDS Index 411.0 +7.96%

• European Financial Sector CDS Index 88.19 +3.81%

• Italian/German 10Y Yld Spread 303.0 +20.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 9.09 +3.12%

• Emerging Market CDS Index 192.03 -.75%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.78 +.08%

• 2-Year Swap Spread 17.25 +.5 basis point

• TED Spread 18.75 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -41.0 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.77 -.28%
• 3-Month T-Bill Yield 2.21% +1.0 basis point

• Yield Curve 24.25 -1.5 basis points

• China Iron Ore Spot 69.0 USD/Metric Tonne +.29%

• Citi US Economic Surprise Index -7.7 -.1 point

• Citi Eurozone Economic Surprise Index -29.30 -.6 point

• Citi Emerging Markets Economic Surprise Index -10.8 +.8 point

• 10-Year TIPS Spread 2.13 -1.0 basis point
• 77.2% chance of Fed rate hike at Dec. 19th meeting, 78.6% chance at Jan. 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -20 open in Japan 
• China A50 Futures: Indicating -193 open in China

• DAX Futures: Indicating -31 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 75% Net Long

Bull Radar

Style Outperformer:

• Large-Cap Value +.4%

Sector Outperformers:

• 1) Gold & Silver +2.9% 2) Utilities +1.6% 3) Homebuilders +1.3%

Stocks Rising on Unusual Volume:

• IGC, PYX, BKH, RNR, EEFT, AIMC, COL, GLMD, PAYX, AEM, PRT, RYAAY, OMER, CLVS, LW, BPT, CHGG, ATSG, VIAV, MLNX, GOLD, MKTX, LOPE, ORBK, SKY and PBR

Stocks With Unusual Call Option Activity:

• 1) HLT 2) MYL 3) CREE 4) INTC 5) PAYX

Stocks With Most Positive News Mentions:

• 1) PAYX 2) INTC 3) FLR 4) CLVS 5) MMSI

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +6.4% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 39.9% of Issues Advancing, 56.8% Declining
• 31 New 52-Week Highs, 90 New Lows
• 47.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.5%
• Vix 11.9 -.9%
• Total Put/Call .85 -15.0%
• TRIN/Arms .99 +59.2%