Morning Market Internals

NYSE Composite Index:

• Volume Running -40.4% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 58.4% of Issues Advancing, 37.8% Declining
• 128 New 52-Week Highs, 2 New Lows
• 64.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.6%
• Vix 12.6 -.2%
• Total Put/Call .80 -1.2%
• TRIN/Arms .79 -26.9%

Stocks Slightly Lower into Final Hour on Economic Data, Profit-Taking, Technical Selling, Defense/Industrial Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.7 +.32%

• Euro/Yen Carry Return Index 125.86 -.05%

• Emerging Markets Currency Volatility(VXY) 6.39 -.47%

• S&P 500 Implied Correlation 43.56 -.82%

• ISE Sentiment Index 93.0 +19
  

• Total Put/Call .81 +1.25%

• NYSE Arms .98 -4.85%

Credit Investor Angst:

• North American Investment Grade CDS Index 44.71 -.79%
  

• America Energy Sector High-Yield CDS Index 548.0 +.07%

• European Financial Sector CDS Index 53.29 -.01%

• Italian/German 10Y Yld Spread 167.25 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 53.18 -.59%
  

• Emerging Market CDS Index 182.22 -.04%
  

• iBoxx Offshore RMB China Corporate High Yield Index 167.27 -.04%

• 2-Year Swap Spread 7.75 +.5 basis point

• TED Spread 36.25 -1.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -13.75 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.32 +.18%
• 3-Month T-Bill Yield 1.56% +1.0 basis point

• Yield Curve .27 -1.0 basis point

• China Iron Ore Spot 90.0 USD/Metric Tonne +.06%

• Citi US Economic Surprise Index -10.4 -.1 point

• Citi Eurozone Economic Surprise Index 25.50 +.9 point

• Citi Emerging Markets Economic Surprise Index -16.1 -.7 basis point

• 10-Year TIPS Spread 1.76 unch.
• 6.0% chance of Fed rate cut at March 18th meeting, 14.8% chance of cut at April 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -35 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating -1 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running -38.7% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 54.6% of Issues Advancing, 41.4% Declining
• 116 New 52-Week Highs, 3 New Lows
• 64.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.7%
• Vix 12.7 +.2%
• Total Put/Call .77 -3.8%
• TRIN/Arms .93 -9.7%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 53.0 -1.5 basis points.

• China Sovereign CDS 31.25 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index  66.25 +.08%.
• FTSE 100 futures -.01%.

• S&P 500 futures unch.

• NASDAQ 100 futures -.04%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases 
10:00 am EST

• The Richmond Fed Manufacturing Index for Dec. is estimated at 1 versus -1 in Nov. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The $41B 5Y T-Note auction and the weekly UR retail sales reports could also impact trading today.

Market Hours
Shortened:

• 9:30 am - 1:00 pm EST
  

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

Stocks Rising into Final Hour on Global Growth Optimism, Technical Buying, Oil Gain, Energy/Healthcare Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.7 +1.8%

• Euro/Yen Carry Return Index 125.93 +.08%

• Emerging Markets Currency Volatility(VXY) 6.40 -1.23%

• S&P 500 Implied Correlation 43.7 -4.0%

• ISE Sentiment Index 74.0 -7
  

• Total Put/Call .79 +1.3%

• NYSE Arms .86 -34%

Credit Investor Angst:

• North American Investment Grade CDS Index 45.02 -.67%
  

• America Energy Sector High-Yield CDS Index 547.0 +1.11%

• European Financial Sector CDS Index 53.29 +1.81%

• Italian/German 10Y Yld Spread 167.25 +1.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 53.49 -.96%
  

• Emerging Market CDS Index 182.35 +.10%
  

• iBoxx Offshore RMB China Corporate High Yield Index 167.33 +.08%

• 2-Year Swap Spread 7.25 unch.

• TED Spread 37.5 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -12.75 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.26 -.01%
• 3-Month T-Bill Yield 1.55%-1.0 basis point

• Yield Curve .28 -1.0 basis point

• China Iron Ore Spot 90.25 USD/Metric Tonne -.06%

• Citi US Economic Surprise Index -10.3 -2.7 basis points

• Citi Eurozone Economic Surprise Index 24.60 +8.3 points

• Citi Emerging Markets Economic Surprise Index -15.4 +.8 basis point

• 10-Year TIPS Spread 1.76 -2.0 basis points
• 6.1% chance of Fed rate cut at March 18th meeting, 13.2% chance of cut at April 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -16 open in Japan 
• China A50 Futures: Indicating +26 open in China

• DAX Futures: Indicating +1 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/medical/industrial sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long