Stocks Falling into Final Hour on Global Growth Worries, Profit-Taking, Technical Selling, Energy/Gaming Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.01 +6.3%

• Euro/Yen Carry Return Index 130.04 -.31%

• Emerging Markets Currency Volatility(VXY) 8.16 -1.45%

• S&P 500 Implied Correlation 36.48 +4.26%

• ISE Sentiment Index 137.0 +101.40%
  

• Total Put/Call .84 +.12%

• NYSE Arms 1.26 +48.24%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.31 +.09%
  

• America Energy Sector High-Yield CDS Index 509.0 -2.92%

• European Financial Sector CDS Index 75.92 +2.13%

• Italian/German 10Y Yld Spread 243.50 -4.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 67.30 +.64%
  

• Emerging Market CDS Index 175.75 +.40%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.16 +.01%

• 2-Year Swap Spread 8.75 -.5 basis point

• TED Spread 18.75 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -17.5 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.53 +.10%
• 3-Month T-Bill Yield 2.40% -2.0 basis points

• Yield Curve 15.5 +.25 basis point

• China Iron Ore Spot 91.70 USD/Metric Tonne +.39%

• Citi US Economic Surprise Index -55.70 -2.8 points

• Citi Eurozone Economic Surprise Index -51.80 +2.9 points

• Citi Emerging Markets Economic Surprise Index -6.90 +1.5 points

• 10-Year TIPS Spread 1.91 -1.0 basis point
• 13.6% chance of Fed rate cut at June 19th meeting, 19.3% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -142 open in Japan 
• China A50 Futures: Indicating -20 open in China

• DAX Futures: Indicating +32 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value -.6%

Sector Underperformers:

• 1) Gaming -2.2% 2) Steel -2.0% 3) Oil Service -1.2%

Stocks Falling on Unusual Volume: 

• HOLI, ZGNX, PNR, X, NVS, AGRD and POOL

Stocks With Unusual Put Option Activity:

• 1) AET 2) OKTA 3) GPRO 4) SLV 5) NBEV

Stocks With Most Negative News Mentions:

• 1) PNR 2) ZGNX 3) X 4) MNI 5) AMD

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.3%

Sector Outperformers:

• 1) Education +1.0% 2) Social Media +.4% 3) Computer Services +.3%

Stocks Rising on Unusual Volume:

• PHAS, CERN, FARO, AVYA, TWST, IFRX, GSHD, NLSN, OKTA, PKI, CPB, INSW, DIS, CNC, LM, SWI, RH, GLOB, CBPO, ENTG, QTS, INSM, GWPH, WWE, COG, GSKY and SWI

Stocks With Unusual Call Option Activity:

• 1) AVYA 2) ZGNX 3) PZZA 4) ITB 5) OIH

Stocks With Most Positive News Mentions:

• 1) DIS 2) GOOS 3) CERN 4) ZS 5) MSI

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.1% Below 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 30.0% of Issues Advancing, 66.6% Declining
• 72 New 52-Week Highs, 12 New Lows
• 57.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.3%
• Vix 13.8 +4.9%
• Total Put/Call .91 +21.3%
• TRIN/Arms 1.49 +72.9%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 67.0 +. basis point. 

• China Sovereign CDS 43.5 +1.25 basis points.
  

• Bloomberg Emerging Markets Currency Index 67.48 +.02%.

• FTSE 100 futures +.18%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (LNN)/.55
• (SJR)/.30

After the Close:

• (PSMT)/.79
• (WDFC)/1.12

Economic Releases
6:00 am EST

• The NFIB Small Business Optimism Index for March is estimated to rise to 102.0 versus 101.7 in Feb.

10:00 am EST

• JOLTS Job Openings for Feb. are estimated to fall to 7550 versus 7581 in Jan.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Clarida speaking, Australia Home Sales report, $38B 3Y T-Note auction, weekly US retail sales reports, Needham Healthcare Conference, (DCI) investor day and the (PSMT) monthly sales report could also impact trading today.

BOTTOM LINE:  Asian indices are slightly lower, weighed down by consumer and industrial shares in the region. I expect US stocks to open mixed and to strengthen into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Reversing Slightly Higher into Afternoon on Diminishing Global Growth Worries, Oil Gain, Technical Buying, Commodity/Gaming Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.3 +4.0%

• Euro/Yen Carry Return Index 130.46 +.2%

• Emerging Markets Currency Volatility(VXY) 8.29 +.12%

• S&P 500 Implied Correlation 35.27 +1.38%

• ISE Sentiment Index 63.0 -11.3%
  

• Total Put/Call .63 -21.3%

• NYSE Arms .81 -8.99%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.31 +.09%
  

• America Energy Sector High-Yield CDS Index 509.0 -2.92%

• European Financial Sector CDS Index 75.92 +2.13%

• Italian/German 10Y Yld Spread 248.0 +.75 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 67.08 +.73%
  

• Emerging Market CDS Index 175.47 +2.53%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.14 +.08%

• 2-Year Swap Spread 9.25 -1.25 basis points

• TED Spread 18.0 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -17.25 -2.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.50 +.07%
• 3-Month T-Bill Yield 2.42% unch.

• Yield Curve 15.75 unch.

• China Iron Ore Spot 93.47 USD/Metric Tonne +.24%

• Citi US Economic Surprise Index -52.90 +.2 point

• Citi Eurozone Economic Surprise Index -53.70 +5.4 points

• Citi Emerging Markets Economic Surprise Index -8.40 +2.9 points

• 10-Year TIPS Spread 1.92 +1.0 basis point
• 13.6% chance of Fed rate cut at June 19th meeting, 17.6% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +50 open in Japan 
• China A50 Futures: Indicating +111 open in China

• DAX Futures: Indicating +15 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long