Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.5%

Sector Underperformers:

• 1) Disk Drives -2.2% 2) Internet -2.2% 3) Software -2.1%

Stocks Falling on Unusual Volume: 

• LMAT, CUTR, PDI, IPGP, DLPH, PENN, COST, SFIX, ASGN, ILMN, COMM, ARNA, NWL, ASMB, ERI, COHR, IIVI, ALRM, LITE, SMCI, SGMS, ADMS and ARCB

Stocks With Unusual Put Option Activity:

• 1) AMJ 2) FMC 3) RSX 4) ADI 5) NWL

Stocks With Most Negative News Mentions:

• 1) LMAT 2) DLPH 3) SMCI 4) ADMS 5) CUTR

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.1%

Sector Outperformers:

• 1) REITs +1.8% 2) Homebuilders +1.2% 3) Utilities +1.2%

Stocks Rising on Unusual Volume:

• PYX, NOA, AZUL, SIR, EPM, PBR, ITUB, FBNC, TPB, AIV, LABL, TSU, ACHC, HURN, NYT, SUN, RS, VIV, CENX, IPGP, CNCE, UGP, COST and APU

Stocks With Unusual Call Option Activity:

• 1) GPOR 2) GOV 3) AR 4) ZION 5) LYB

Stocks With Most Positive News Mentions:

• 1) PBR 2) CAG 3) PPG 4) CNP 5) LOXO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +1.2% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 49.8% of Issues Advancing, 47.0% Declining
• 24 New 52-Week Highs, 180 New Lows
• 42.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.7%
• Vix 16.2 +9.0%
• Total Put/Call 1.11 -6.7%
• TRIN/Arms .64 -20.4%

Monday Watch

Today's Headlines

Bloomberg:                

• China Faces a Bleaker End to 2018 as Central Bank Cuts Reserve Ratio Again.
• China Traders Digest PBOC Cut, Last Week's Turmoil After Holiday.  
• China's Investment In Australia Slumps 40% Amid Diplomatic Spat.
• Trump Wins Big on Kavanaugh and Blasts Democratic 'Mob'.
• Pompeo and Kim Agree to Hold Second Summit Soon.
• Far-Right Brazil Candidate Bolsonaro Storms Into Election Runoff. Asian stocks declined at the start of the week and the yuan slipped as investors assessed the latest move by the People’s Bank of China to loosen monetary policy. Shares in China will be under pressure as traders return from a week-long holiday. Futures in Hong Kong indicated declines when trading starts, while stocks in Australia and South Korea fell. Japan is shut for a holiday, and Columbus Day in the U.S. means no Treasuries trade on Monday. U.S. stocks on Friday capped the worst week in a month, as the sell-off in Treasuries that took yields to seven-year highs persisted amid a solid run of data that’s emboldening investor faith for tighter monetary policy. Chinese traders are back at their desks, with the yuan weakening past 6.9 per dollar following the policy move on Friday. Futures on Hong Kong’s Hang Seng fell 0.6 percent. Australia’s S&P/ASX 200 Index declined 0.8 percent. South Korea’s Kospi index lost 0.1 percent.
• Five Things You Need to Know to Start Your Day.  
• World's Finance Chiefs Gather, China Cuts Reserve Ratio: Eco Day.
• Brent Drops Below $84 as Saudis Vow to Replace Lost Iranian Oil.
• Wall Street Earnings Season Gets Under Way With Profitability at Decade High.

Wall Street Journal: 

• The Internet Gave Us Great TV—Now Where’s Our TV Guide?
• Surging Yields Raise Threat of Tipping Point for Stocks.
• Retailers Rush to Fill Holiday Hole Left by Toys ‘R’ Us.
• Trump’s Tariffs on China Aren’t a Short-Term Strategy.
• Brazil Votes in Divisive Presidential Race.
• Next Year’s Most Wearable Women’s Trends.
• Investment in Infrastructure Is Booming.
• Storm Near Gulf of Mexico Aims for Florida’s Panhandle.
• George Soros’s March on Washington.
• Auto Makers Consider Shifting Manufacturing to North America.

MarketWatch.com:

• Homeland Security says it has no reason to doubt spy-chip denials by Apple(AAPL), Amazon(AMZN). 
• Taylor Swift bashes Marsha Blackburn, supports Tennessee Dems in rare political statement.
• Some anti-Kavanaugh protesters paid to help make 'viral moments,' reporter says.

Fox News:

• GOP senator reveals wife received text of beheading after Kavanaugh vote.

CNBC:

• Democrats' advantage in recent polls may not bring the 'blue wave' they're hoping for. 
• China's central bank announces a new policy change to spur growth.
• Gas prices nearing highest levels in four years, adding to calls to repeal gas taxes.
• These young cardiologists are opening tech-infused health clinics all over New York.

Zero Hedge:           

• Chinese FX Reserves Drop The Most In 7 Months; Yuan Set To Plunge Below PBOC "Red Line".
• US And North Korea Agree To Second Summit Meeting After "Productive Conversation".
• Trump: "Angry Mob" of "Radical Democrats" Has Become "Too Extreme And Too Dangerous To Govern".
• "Fess Up To Reality" - Former Google(GOOG) Exec Exposes Silicon Valley Hypocrisy In Scathing Essay.
• Black Americans Are Reentering The Work Force Faster Than Whites.
• "Disappeared" Interpol Chief Abruptly Resigns After Wife Reveals Chilling Text Message.
• Justice Elena Kagan: Legitimacy Of The Supreme Court Is Now At Risk.
• China Cuts Reserve Ratio, Releases 1.2 Trillion Yuan Amid Rising Trade War, Record Defaults.
• "Bankrupt" UN Budget: Who Hasn't Paid Their Dues? 
  
• The Damage Done By The Kavanaugh Hearings. 

Business Insider:

• 'I do not believe that Brett Kavanaugh was her assailant': Collins defends Supreme Court vote amid sexual-assault allegation.

Night Trading

• Asian indices are -1.25% to -.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 83.75 +2.0 basis point.
• Asia Pacific Sovereign CDS Index 9.75 +.75 basis point.
• Bloomberg Emerging Markets Currency Index 66.17 +.05%.
• FTSE 100 futures -.07%
• S&P 500 futures +.01%.
• NASDAQ 100 futures -.05%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• None of note

After the Close:

• None of note

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Manufacturing PMI report and the Eurozone Industrial Production report could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 

• Weekly Market Outlook by Yahoo. (video)

• Stocks to Watch Next Week by Seeking Alpha.

• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on technical selling, trade war fears, European/emerging market/US high-yield debt angst, rising long-term rates, yen strength and oil weakness. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:     

• America First Is a Winning Strategy, JPMorgan Says.  

• Emerging-Market Bears Return as U.S. Yields Spike.

• Kavanaugh's Rise Heralds New Conservative Era on Supreme Court.

• The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies.  

• Statements From Amazon, Apple, Supermicro, and the Chinese Government.  

• Hedge Funds Post Worst Third-Quarter Performance in Three Years.

• Crude Advances For Fourth Week as Supply Jitters Stoke Concern.  

• These U.S. Industries Hired Most – and Least – in September.

• Brazil's Far-Right Candidate Gains Support in Election-Eve Poll.

Wall Street Journal: 

• Senate Poised to Confirm Kavanaugh.

• Jobless Rate Falls to Lowest in 49 Years.

• Banks Brace for Downside of Higher Rates.

• Meet the 9-Year-Old Telling You What to Wear.

• Target(TGT) Hopes to Lure Shoppers With New Brand of Consumer Staples.

Barron's:

• Had bullish commentary on (VZ), (TEX), (ETN), (IR), (BKS), (GOLD), (ABX) and (CONE).

MarketWatch.com:

• Weekend roundup: Amazon’s $15 minimum wage | Interest rates spike | Best new ideas in money.

Fox News:  

• Trump's pick Kavanaugh confirmed to Supreme Court after bitter fight, securing rightward shift.

• Turley: 'Dreadful idea' for Democrats to probe Kavanaugh if they take the House.

• Senator Collins in protesters' crosshairs after she seals Kavanaugh deal with impassioned speech.

CNBC:     

• Einhorn on Tesla: 'Like Lehman, we think the deception is about to catch up'.

• Why Chinese cyber-spying is the 'latest chapter' in a book that keeps tech CEOs awake at night.

• Here are the US metro areas with the best and worst job markets – and the Midwest is doing better than you think.  

• Amazon(AMZN) is doubling down on its private label business, stoking 'huge fear' in some sellers.

• US markets have a trade war edge over China: Commodities.

• EU will propose changes to Italian budget if needed, Juncker says.

Zero Hedge:    

• Brett Kavanaugh Confirmed To The US Supreme Court.

• Michael Avenatti Turns Radioactive As Liberals Blame Porn Lawyer For Kavanaugh Confirmation.

• Crypto Volumes Tumble To 17-Month Low As "Bitcoin Becomes Boring". 

• The US Spent A Record $523 Billion On Debt Interest In Fiscal 2018.

• The "VaR Shock" Is Back: Global Bonds Lose $880 Billion In One Week.

• Collins, Manchin Vote "Yes", Ensuring Kavanaugh Confirmation.

• Texas Robot Brothel Outlawed By City Council.

• Shocking New Studies Find Young Americans Are Overweight, Unhealthy, Suicidal, & Addicted To Alcohol And Drugs.

• A Record 37% Of Small Business Owners Are Raising Wages.

• Blasey Ford's FBI "Polygraph" Buddy Pressured Woman From Mystery Groping Party To Change Story.

• "Make Them Scared"-Website Posts Uncorroborated Sexual Assault Claims Against Male Students.

• Weekend Reading: Are Dividends Telling Us Something?

• Small Caps, Semis Smashed; Homebuilders Hammered Amid Greatest Jobs Data In 49 Years.