Bear Radar

Style Underperformer:

• Small-Cap Value -1.7%

Sector Underperformers:

• 1) Oil Service -5.4% 2) Road & Rail -4.3% 3) Construction -3.3%

Stocks Falling on Unusual Volume: 

• GTES, LIVN, TGT, LB, JEC, VCRA, EVBG, VST, HP, CASH, SMLP, ROST, VNOM, FIVE, SGMS, WHD, KSS and RARX

Stocks With Unusual Put Option Activity:

• 1) XRT 2) BBY 3) FL 4) RF 5) EMB

Stocks With Most Negative News Mentions:

• 1) LB 2) WLL 3) NAVI 4) AAPL 5) JD

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth -1.3%

Sector Outperformers:

• 1) Biotech -.1% 2) Homebuilders -.1% 3) Semis -.2%

Stocks Rising on Unusual Volume:

• KLIC, NVDA, TSRO, BBY, PDD, A, JACK, PSTG, SHPG, URBN, CARB, NGG, HCM, ZG, OHI, CYOU, ALGN, NOW, SPB, RDY, WP, ZEN, CPB and AMAT

Stocks With Unusual Call Option Activity:

• 1) DVA 2) OKTA 3) RF 4) IYR 5) ADI

Stocks With Most Positive News Mentions:

• 1) URBN 2) ADI 3) MDT 4) CPB 5) BBY

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +42.5% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 21.6% of Issues Advancing, 76.4% Declining
• 32 New 52-Week Highs, 482 New Lows
• 26.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.8%
• Vix 22.4 +11.6%
• Total Put/Call .99 +3.1%
• TRIN/Arms 1.33 +66.3%

Tuesday Watch

Evening Headlines

Bloomberg:              

• China Is Paying for Most of Trump's Trade War, Research Says.  

• IMF Sees Australia Risks Tilt to Downside on China, Trade War.   

• Europe’s Most Reliable Rate-Hike Beacon Goes Dim.

• Stock Slump Extends to Asia After U.S. Tech Sinks. Stocks in Asia declined as trading got underway Tuesday after weakness in some of the biggest technology companies sent U.S. stocks tumbling, adding to pessimism about escalating trade tensions. The yen ticked higher while the dollar and Treasuries were little changed. Equities fell in Japan, Australia and South Korea, while futures tipped a weaker open in Hong Kong. S&P 500 Index futures were also weaker after software developers and semiconductor manufacturers led the gauge lower Monday. The Nasdaq 100 Index plunged more than 3 percent to the lowest since April on renewed concern the trade war will hurt global demand and disrupt supply chains for the major technology companies that have carried the bull market for almost 10 years. Japanese automakers were under pressure with Nissan Motor Co. tumbling after the arrest on misconductallegations of the carmaker’s chairman, Carlos Ghosn. Japan’s Topix index fell 0.8 percent as of 9:10 a.m. in Tokyo. Australia’s S&P/ASX 200 Index dropped 0.7 percent. South Korea’s Kospi index lost 1 percent. Hong Kong’s Hang Seng Index futures declined 1.2 percent. S&P 500 futures fell 0.2 percent.   

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

• U.S. Full Employment, China Trade Pay, Japan's Quandry: Eco Day.

• Cryptocurrencies Plummet, With Bitcoin Breaking Below $5,000.  

• Mueller Says Whitaker’s Rise Has ‘No Effect’ on Case Under Appeal.

Wall St. Journal:

• Outlook for Traditional TV Goes From Bad to Worse.

• A Silicon Valley Tech Leader Walks a High Wire Between the U.S. and China.

• Pelosi Works to Quell Dissent Within Her Party.

• Apple Cuts iPhone Production, Creating Turmoil for Suppliers.

• Opioid Industry Fights Efforts to Make It Pay for Crisis.

• The Price of a Bad Year for Money Managers: Fewer Jobs, Less Pay.

MarketWatch.com:

• Arrest of legendary CEO Carlos Ghosn creates peril for investors in not one but three car companies.

Fox News:   

• Trump, RNC double down on attack on retired Navy war hero McRaven who led bin Laden operation.

CNBC:          

• The five most important tech stocks are getting slaughtered, with each down more than 20% from highs. 

• Bitcoin drops 12% to below $5,000.

• The sell-off can't end until these 10 problems are fixed, Jim Cramer argues.  

• Cloud stocks get hammered, with Salesforce suffering worst day since early 2016.

• Jeff Bezos' new 'shadow' adviser at Amazon is a female executive of Chinese descent.

• Stocks making the biggest moves after hours: Urban Outfitters, L Brands and more.

• Amazon(AMZN) stores every conversation you have with Alexa — here's how to delete them.

• Mark Zuckerberg reportedly blamed Sheryl Sandberg as Facebook faced numerous scandals.

Zero Hedge:

• Chipotle Caught Lying After Firing "Racist" Manager; Backpedals When Internet Outs Food Thief.

• These Are The Biggest Winners And Losers Since The S&P 500's Record High.

• "Democratic Socialist" Ocasio-Cortez Couldn't Name The 3 Branches Of Government.

• Fractured Democratic Party Fighting Over Pelosi's Bid For House Speaker.

• Eurodollar Futures: Powell May Figure It Out Sooner, He Won't Have Any Other Choice.

• "The Outlook For The Global Economy Has Deteriorated": Oil, Copper, & Lumber Signal The Next Economic Downturn Is Here.

• Zuckerberg's "War Face" Has Driven Key Executives Away, Stoked Tension With Sandberg.

• Credit Spreads Are Blowing Up.

• RIP FANG.

Night Trading 

• Asian equity indices are -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 94.75 +1.75 basis points. 

• Asia Pacific Sovereign CDS Index 10.25 unch.

• Bloomberg Emerging Markets Currency Index 67.37 -.01%.

• FTSE 100 futures -.40%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.22%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (CBRL)/1.91

• (EV)/.85

• (HIBB)/.16

• (PDCO)/.37

After the Close:

• (GME)/.56

• (NTNX)/-.27

• (CRM)/.50

Economic Releases

8:30 am EST

• Housing Starts for October are estimated to rise to 1225K versus 1201K in September.

• Building Permits for October are estimated to rise to 1260K versus 1241K in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone PPI report and the weekly US retail sales reports could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.

Stocks Substantially Lower into Final Hour on Trade War Fears, Global Growth Worries, European/Emerging Markets/US High-Yield Debt Angst, Tech/Medical Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 21.0 +10.7%

• Euro/Yen Carry Return Index 133.95 +.02%

• Emerging Markets Currency Volatility(VXY) 10.08 +.20%

• S&P 500 Implied Correlation 44.04 +6.5%

• ISE Sentiment Index 86.0 -40.3%
  

• Total Put/Call .92 -1.08%

• NYSE Arms .79 -13.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.70 +2.2%
  

• America Energy Sector High-Yield CDS Index 665.0 +1.28%

• European Financial Sector CDS Index 102.33 +2.49%

• Italian/German 10Y Yld Spread 322.5 +10.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.26 +1.28%

• Emerging Market CDS Index 208.0 +2.97%
  

• iBoxx Offshore RMB China Corporate High Yield Index 146.67 -.06%

• 2-Year Swap Spread 19.25 -.75 basis point

• TED Spread 30.75 +4.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -31.0 +4.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.36 +.06%
• 3-Month T-Bill Yield 2.35% unch.

• Yield Curve 27.25 +.75 basis point

• China Iron Ore Spot 72.39 USD/Metric Tonne -.29%

• Citi US Economic Surprise Index 8.80 -5.2 points

• Citi Eurozone Economic Surprise Index -55.10 +.4 point

• Citi Emerging Markets Economic Surprise Index -9.20 unch.

• 10-Year TIPS Spread 2.0 -3.0 basis points
• 69.6% chance of Fed rate hike at Jan. 30th meeting, 85.8% chance at March 20th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -216 open in Japan 
• China A50 Futures: Indicating -72 open in China

• DAX Futures: Indicating -23 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 25% Net Long