Bear Radar

Style Underperformer:

• Small-Cap Value -.3%

Sector Underperformers:

• 1) Oil Service -2.9% 2) REITs -.8% 3) Energy -.7%

Stocks Falling on Unusual Volume: 

• ANGO, FNKO, RAD, CRNC and MRTX

Stocks With Unusual Put Option Activity:

• 1) EXPR 2) APLS 3) AXTA 4) ALXN 5) DD

Stocks With Most Negative News Mentions:

• 1) PIR 2) CVX 3) KMT 4) HXL 5) PSX

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.3%

Sector Outperformers:

• 1) Disk Drives +2.3% 2) Semis +2.1% 3) Social Media +1.2%

Stocks Rising on Unusual Volume:

• APA, APLS, INMD, GTT, MU, NXST, BYND, WDC, BECN, TLRA, MCHP, RUBI, LPG, AJRD, VICR, PDCO, WW, SEAS, IPHI, TGNA, ON, SQ, GTN, EXEL, PSNL, AERI, DNLI, IIVI, ITCI, FEYE, AKAM, LSCC, PTCT, LYFT, DXCM, VSH, DDOG and TWTR

Stocks With Unusual Call Option Activity:

• 1) APLS 2) MCHP 3) GM 4) ZEN 5) APA

Stocks With Most Positive News Mentions:

• 1) APLS 2) APA 3) MU 4) WDC 5) FEYE

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +1.8% Above 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 44.7% of Issues Advancing, 52.4% Declining
• 86 New 52-Week Highs, 8 New Lows
• 65.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.5%
• Vix 13.9 +.1%
• Total Put/Call .70 -14.6%
• TRIN/Arms .98 unch.

Tuesday Watch

Evening Headlines

Bloomberg:       

• China Plans to Send Team to U.S. for Jan. 15 Deal Signing.

• Hong Kong Landlords Face Tough Times as Shop, Office Rents Sink.  

• China Needs More Than Just Rules to Tackle Rising Bond Defaults.

• Why China Won’t Join Any Iran-Russia Coalition Against Trump.

• U.S. Adds to Mideast Forces, Denies Exit From Iraq After Errant Letter.

• Saudi Arabia Says ‘Very Keen’ to Avoid Regional Escalation.   

• Asia Stocks Rebound as Middle East Concerns Fade: Markets Wrap. Asian stocks rebounded as the risk-off mood sparked by geopolitical tensions in the Middle East ebbed. The yen held losses. Shares rose in Tokyo, Sydney and Seoul. Hong Kong futures tipped a firmer open. U.S. equity futures were flat after the S&P 500 Index rose for the third time in four sessions, erasing early losses, with heavyweight technology companies leading. Gold retreated from the highest in more than six years. Ten-year Treasury yields were around 1.80%. Crude oil fell below $63 a barrel in New York, after reaching the highest since April. Topix index rose 0.8% as of 9:03 a.m. in Tokyo. Australia’s S&P/ASX 200 Index added 0.9%. South Korea’s Kospi index added 0.7%. Hong Kong’s Hang Seng Index futures rose 0.6% earlier. S&P 500 futures were little changed. The S&P 500 Index rose 0.4% in New York.

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

• Boeing Reassigns 737 Max Workers With Factory Shutdown Looming.  

• Topgolf IPO Could Value Company at $4 Billion.  

• Oil Buyers Fear Iraqi Supply Hit in Spillover From Iran Crisis.

Wall Street Journal:

• Iranians Rally as Calls for Revenge on U.S. Deepen.

• Weinstein Faces Sex-Crime Charges in Los Angeles.

• Trump Administration to Roll Back Rules on Low-Income Housing.

• Schools Seek Ways to Curb Vaping Among Students,

Fox News:

• GOP senators move to dismiss articles of impeachment after Pelosi delays.

MarketWatch.com: 

• Opinion: 10 tech predictions for 2020: Apple, Tesla, Netflix and more.

CNBC:

• Dow recovers from 200-point drop to finish higher as investors shake off geopolitical concerns.

• American Airlines reaches deal with Boeing over 737 Max grounding compensation.

• Google(GOOG) hits an all-time high as investors shrug off antitrust investigations.

• Hyundai and Uber team up to debut new flying taxis at CES.

• AMD(AMD) claims new laptop chips outperform Intel(INTC).

• Stocks making the biggest moves after hours: American Airlines, Microchip, Pier 1 & more.

• 
  

  Byron Wien makes some bold 2020 calls in his widely followed surprises list including 2 rate cuts.

Zero Hedge:

• Chaos: Pentagon Denies "Poorly Worded" Iraq Withdrawal Letter, Esper Says "No Decision To Leave Iraq, Period".

• Ghosn's 'Great Escape' Masterminded By Ex-Green Beret, Involved 300-Mile High-Speed Rail Sprint.

• 3 People Critical In Salt Lake City After Tesla Runs Red Light, Smashes Into Car At "High Rate Of Speed".

• Almost $300 Million Stolen From Crypto-Exchanges In 2019.

• NATO Chief Silent On Whether The Alliance Would Respond To Iranian Attack On US.

• Six B-52 Bombers Ordered To Indian Ocean Base To Be "Available" Against Iran.

• Amphibious Assault Ship Bataan With 2,000 Marines On Board Is Headed Toward Iraq.

• WSJ Editorial Slams Iowa State's "Orwellian" Free-Speech Policies.

• Ten Insane, Completely Irrational Things Millions Of Americans Believe As We Enter The 2020s.

• Gold Nears 7 Year Highs As Stocks, Bonds Shrug Off Soaring Geopolitical Risk.

Night Trading 

• Asian equity indices are +.5% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 56.0 -.75 basis point.

• China Sovereign CDS 33.25  -1.0 basis point.

• Bloomberg Emerging Markets Currency Index  66.47 +.02%.

• FTSE 100 futures n/a.

• S&P 500 futures +.14%.

• NASDAQ 100 futures +.24%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ANGO)/.02

After the Close:

• None of note

Economic Releases  
8:30 am EST

• The Trade Deficit for Nov. is estimated at -$43.7B versus -$47.2B in Oct.
  

10:00 am EST

• Factory Orders for Nov. is estimated to fall -.8% versus a +.3% gain in Oct.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone CPI report, $38B 3Y T-Note auction, weekly US retail sales reports, Goldman Energy Conference and CES 2020 could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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

Stocks Reversing Slightly Higher into Afternoon on Global Growth Optimism, Short-Covering, Technical Buying, Homebuilding/Energy Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.6 +4.1%

• Euro/Yen Carry Return Index 125.87 +.5%

• Emerging Markets Currency Volatility(VXY) 6.75 +.3%

• S&P 500 Implied Correlation 43.0 -3.7%

• ISE Sentiment Index 114.0 +32
  

• Total Put/Call .86 +.2%

• NYSE Arms .91 -41.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 46.09 +1.2%
  

• America Energy Sector High-Yield CDS Index 512.0 -2.89%

• European Financial Sector CDS Index 54.87 +1.67%

• Italian/German 10Y Yld Spread 164.75 +2.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 56.96 +4.72%
  

• Emerging Market CDS Index 182.7 +.34%
  

• iBoxx Offshore RMB China Corporate High Yield Index 168.22 +.21%

• 2-Year Swap Spread 6.5 -2.75 basis points

• TED Spread 36.75 -3.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap .25 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.47 +.02%
• 3-Month T-Bill Yield 1.52%  +2.0 basis points

• Yield Curve .25 -5.0 basis points

• China Iron Ore Spot 92.75 USD/Metric Tonne +1.11%

• Citi US Economic Surprise Index -7.0 +2.3 points

• Citi Eurozone Economic Surprise Index 43.0 +9.5 points

• Citi Emerging Markets Economic Surprise Index -9.6 +1.1 basis points

• 10-Year TIPS Spread 1.77 -1.0 basis point
• 3.6% chance of Fed rate cut at March 18th meeting, 16.3% chance of cut at April 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +105 open in Japan 
• China A50 Futures: Indicating +72 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long