Bear Radar

Style Underperformer:

• Large-Cap Growth -1.0%

Sector Underperformers:

• 1) Oil Service -4.3% 2) Gaming -3.8% 3) Energy -3.3%

Stocks Falling on Unusual Volume: 

• ASTE, WTR, CAT, HZNP, EDU, MC, TRU, SLCA, LOGI, WAT, GPK, CMP, HUBB, CNC, MMM, PETS, GATX, INN, PCAR, PPBI and SLCA

Stocks With Unusual Put Option Activity:

• 1) FITB 2) VNQ 3) RLGY 4) AGNC 5) CF

Stocks With Most Negative News Mentions:

• 1) EDU 2) DISH 3) COCP 4) LBRT 5) USAT

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.7%

Sector Outperformers:

• 1) Homebuilders +4.4% 2) Restaurants +2.7% 3) Papers +1.1%

Stocks Rising on Unusual Volume:

• EIGR, DVAX, CDNS, MCD, HMST, MRTX, ITB, ABG, WLH, AUDC, CNXN, PHM, SSNC, BTI, ATHM, TOL, ZION, LPT, DHI, PAG, UN, SCG, TCBI and GRTS

Stocks With Unusual Call Option Activity:

• 1) ITB 2) NOV 3) NSC 4) KNX 5) JBLU

Stocks With Most Positive News Mentions:

• 1) CDNS 2) VZ 3) ALK 4) PHM 5) MCD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +45.2% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 11.0% of Issues Advancing, 87.3% Declining
• 2 New 52-Week Highs, 438 New Lows
• 28.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.6%
• Vix 23.9 +21.7%
• Total Put/Call 1.01 -4.7%
• TRIN/Arms 1.12 -14.5%

Tuesday Watch

Evening Headlines

Bloomberg:       

• Trump Says He’s ‘Not Satisfied’ as Mnuchin Meets Saudi Prince.  

• Bank of America Is Already Calling Time on China Stock Rally. 

• Asian Stocks Resume Declines; Dollar Holds Gain. Asian equities opened lower as U.S. futures built on Monday declines ahead of a slew of key earnings reports this week. The dollar traded around the highest level in two months. Stocks fell in Japan, Australia and South Korea. Futures in China and Hong Kong were lower, suggesting the biggest jump in more two years in the Chineseequities Monday may not extend. Earlier in the U.S., banks and energy stocks weighed on the S&P 500 Index though the FANG cohort lifted tech-heavy Nasdaq indexes ahead of megacap earnings from the likes of Alphabet and Twitter. Treasury yields dipped and oil was stable near a five-week low. Japan’s Topix index fell 1.1 percent as of 9:14 a.m. in Tokyo. The S&P/ASX 200 Index dropped 0.6 percent. Hong Kong Hang Seng Index contracts lost 0.5 percent. FTSE China A50 futures were declined 0.4 percent. South Korea’s Kospi index lost 0.7 percent. S&P 500 futures fell 0.4 percent.  

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

• U.S. Growth View, China Boosts Cash, Trump Vows Tax Cut: Eco Day.

• Banks, Builders Trounced on Interest Rate Worries.   

• Now Apps Can Track You Even After You Uninstall Them.

Wall St. Journal:

• Trump Threatens to Cut Foreign Aid Over Migrant Caravan.

• The Steel Industry Gets What It Wants on Tariffs.

• Trump ‘Not Satisfied’ With Saudi Explanation on Khashoggi’s Death.

• Banks’ Golden Deposits Are Heading Out the Door.

• The Illegal Ingredients in Your Dietary Supplements.

• Italy Vows to Stick to Budget That Breaches EU Rules.

• States Cleared to Allow Less-Comprehensive Health Plans.

MarketWatch.com:

• Hurricane Willa churns toward Mexico as a ‘potentially catastrophic’ Category 5 storm.

Fox News: 

• GERALDO RIVERA: How immigration backers should strike a deal with Trump.

CNBC:         

• Chinese official tells American investors at a meeting: We don't fear a trade war with the US.

• Stocks making the biggest moves after hours: Cadence, Zions Bancorp and more. 

• Facebook exodus continues as Oculus co-founder Brendan Iribe leaves.

• Mattis is 'completely aligned' with Trump on pulling the US from a Russian arms control treaty.

• Apple is probably the best tech bet heading into earnings, says venture capitalist Gene Munster.

• Here are the major Facebook execs who have left in 2018 so far.

Zero Hedge: 

• Are Millennials About To Get Slaughtered?

• Mutiny, Class, Authority, And Respect - Why America's Elites Are Panicking.

• WSJ Op-Ed Cracks The Code: Why Liberal Intellectuals Hate Trump.

• Paid Protest Firm "Crowds On Demand" Sued In $23 Million Extortion Plot.

• The Real Reason Why We're So Crazy And Miserable All The Time.

• "Private Jets & 5-Star Hotels" - Explosive Report Alleges Avenatti Lived Lavish Lifestyle While Owing Millions To IRS .

• 7 Million Americans Are About To Get An Artificial Boost To Their FICO Scores.

• China Rescue Fails To Save EU, US Markets - Banks, Builders, & Bud Stocks Battered.

Night Trading 

• Asian equity indices are -1.25% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 88.0 -.25 basis point. 

• Asia Pacific Sovereign CDS Index 9.75 unch.

• Bloomberg Emerging Markets Currency Index 66.94 -.06%.

• FTSE 100 futures -.41%.

• S&P 500 futures -.58%.

• NASDAQ 100 futures -.57%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (MMM)/2.70

• (BIIB)/6.76

• (CAT)/2.85

• (CIT)/1.14

• (GLW)/.48

• (FITB)/.63

• (HOG)/.54

• (JBLU)/.42

• (LMT)/4.31

• (MCD)/1.99

• (PCAR)/1.52

• (PHM)/.94

• (DGX)/1.68

• (RF)/.36

• (UTX)/1.82

After the Close:

• (COF)/2.87

• (CSL)/1.73

• (CB)/2.39

• (IEX)/1.31

• (ILMN)/1.26

• (JNPR)/.44

• (IRBT)/.52

• (RHI)/.92

• (TER)/.63

• (TXN)/1.58

• (VMI)/1.78

• (VAR)/1.20

Economic Releases

10:00 am EST

• The Richmond Fed Manufacturing Index for October is estimated to fall to 24.0 versus 29.0 in September.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kashkari speaking, Fed's Bostic speaking, Fed's Evans speaking, $38B 2-Year T-Note auction and the Eurozone Consumer Confidence report could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly lower and to maintain lossesinto the afternoon.  The Portfolio is 50% net long heading into the day.

Stocks Slightly Lower into Final Hour on Fed Rate-Hike Fears, Earnings Jitters, Technical Selling, Financial/Homebuilding Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 19.61 -1.4%

• Euro/Yen Carry Return Index 134.52 -.18%

• Emerging Markets Currency Volatility(VXY) 9.73 -2.11%

• S&P 500 Implied Correlation 42.19 -.47%

• ISE Sentiment Index 84.0 +9.09%
  

• Total Put/Call 1.01 -10.6%

• NYSE Arms 1.21 +49.38%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.29 -.33%
  

• America Energy Sector High-Yield CDS Index 419.0 +.31%

• European Financial Sector CDS Index 91.13 -1.91%

• Italian/German 10Y Yld Spread 304.25 +2.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 9.81 +.05%

• Emerging Market CDS Index 202.42 -1.04%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.32 +.27%

• 2-Year Swap Spread 19.5 -.75 basis point

• TED Spread 17.25 +1.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -43.0 +2.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.98 -.08%
• 3-Month T-Bill Yield 2.30% unch.

• Yield Curve 28.5 -.25 basis point

• China Iron Ore Spot 72.74 USD/Metric Tonne -.12%

• Citi US Economic Surprise Index -.5 +1.2 points

• Citi Eurozone Economic Surprise Index -28.2 +1.0 point

• Citi Emerging Markets Economic Surprise Index -4.4 -.4 point

• 10-Year TIPS Spread 2.11 -1.0 basis point
• 83.0% chance of Fed rate hike at Dec. 19th meeting, 83.4% chance at Jan. 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -54 open in Japan 
• China A50 Futures: Indicating -35 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech/retail/medical sector longs

• Disclosed Trades: None

• Market Exposure: 50% Net Long