Bear Radar

Style Underperformer:

• Mid-Cap Growth +.2%

Sector Underperformers:

• 1) Social Media -2.1% 2) Software -1.0% 3) Internet -1.0%

Stocks Falling on Unusual Volume: 

• APPN, TTWO, ETH, FSLY, COUP, PLAN, RETA, MTCH, SWI, NEWR, PCTY, BOOT, MANH, SNAP, TSLA, KN and PLT

Stocks With Unusual Put Option Activity:

• 1) MTCH 2) INDA 3) ZNGA 4) DISH 5) SNAP

Stocks With Most Negative News Mentions:

• 1) F 2) NEWR 3) IAC 4) OPRA 5) MTCH

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.8%

Sector Outperformers:

• 1) Oil Service +4.1% 2) Healthcare Providers +4.0% 3) Biotech +3.8%

Stocks Rising on Unusual Volume:

• PBYI, GHL, OI, BTAI, COTY, ALEC, SUM, ARCH, GTES, AAWW, AA, PAG, TCO, SFM, VRS, MCHP, AIMT, LGIH, DENN, DDD, TOL, CERN, ON, PAGP, MDU, IBM, SDC, JKHY, UNH, AMGN, XOM, KMT, HAIN, HALO, BZH, HBI, REGN, NGVT, KEX, LEVI, UAL, PVH, PPBI, NS, LOPE, RUTH, OPB, IART, WWE, EGHT, HT, PAA and NAV

Stocks With Unusual Call Option Activity:

• 1) AA 2) CERN 3) DO 4) TSCO 5) XME

Stocks With Most Positive News Mentions:

• 1) HUM 2) USNA 3) COTY 4) AIMT 5) CERN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +29.5% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 75.0% of Issues Advancing, 22.8% Declining
• 187 New 52-Week Highs, 10 New Lows
• 61.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.6%
• Vix 15.4 -3.8%
• Total Put/Call .79 -4.8%
• TRIN/Arms 1.38 +102.9%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 54.5 -1.5 basis points.

• China Sovereign CDS 36.0 -3.5 basis points.

• Bloomberg Emerging Markets Currency Index  65.49 -.13%.
• FTSE 100 futures -.26%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.11%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (ABB)/.23
• (BMI)/.42
• (BSX)/.44
• (CG)/.44
• (ENR)/.97
• (GM)/.01
• (HUM)/2.19
• (MRK)/1.15
• (BTU)/-.92 

After the Close:

• (UHAL/3.8
• (AVB)/2.41
• (CTS)/1.04
• (COHR)/.77
• (FEYE)/.04
• (FLO)/.18
• (CTSH)/1.04
• (COHR)/.77
• (FOXA)/-.01
• (IAC)/1.88
• (IRBT)/.52
• (MET)/1.38
• (ORLY)/4.27
• (PTON)/-.31
• (QCOM)/.86
• (SAVE)/1.20
• (TWLO)/.01
• (WERN)/.60
• (YUMC)/.17
• (ZNGA)/.06

Economic Releases 

8:15 am EST

• The ADP Employment Change report for Jan. is estimated to fall to 158K versus 202K in Dec.

8:30 am EST

• The Trade Balance for Dec. is estimated at -$48.2B versus -$43.1B in Nov.

10:00 am EST

• The ISM Non-Manufacturing Index for Jan. is estimated to rise to 55.1 versus 55.0 in Dec.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,837,910 barrels versus a +3,548,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,736,300 barrels versus a +1,203,000 barrel gain the prior week. Distillate inventories are estimated to fall by -243,900 barrels versus a -1,289,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.1% versus a -3.3% decline prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Services PMI report, weekly MBA Mortgage Applications report, (M) investor day and the (COST) Jan. sales results could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.

Stocks Substantially Higher into Final Hour on Diminished Coronavirus Fears, Rising Trump Re-Election Odds, US Economic Data, Tech/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 16.0 -10.8%

• Euro/Yen Carry Return Index 125.45 +.57%

• Emerging Markets Currency Volatility(VXY) 6.55 -2.8%

• S&P 500 Implied Correlation 38.8 -8.3%

• ISE Sentiment Index 77.0 +3
  

• Total Put/Call .81 +11.0%

• NYSE Arms .61 -42.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 47.21 -5.61%
  

• America Energy Sector High-Yield CDS Index 642.0 -.73%

• European Financial Sector CDS Index 51.11 -5.74%

• Italian/German 10Y Yld Spread 135.0 -4.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 54.18 -4.15%
  

• Emerging Market CDS Index 186.69 -3.94%
  

• iBoxx Offshore RMB China Corporate High Yield Index 170.01 -.02%

• 2-Year Swap Spread 6.5 +.5 basis point

• TED Spread 19.25 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -6.75 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.56 +.35%
• 3-Month T-Bill Yield 1.56% +1.0 basis point

• Yield Curve .17 -3.0 basis points

• China Iron Ore Spot 80.70 USD/Metric Tonne +4.1%

• Citi US Economic Surprise Index 19.40 +3.5 points

• Citi Eurozone Economic Surprise Index 18.30 -.6 point

• Citi Emerging Markets Economic Surprise Index 25.6 +.8 point

• 10-Year TIPS Spread 1.64 +3.0 basis points
• 24.8% chance of Fed April 29th meeting, 43.0% chance of cut at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +305 open in Japan 
• China A50 Futures: Indicating +130 open in China

• DAX Futures: Indicating +1 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +1.4%

Sector Underperformers:

• 1) Gold & Silver -1.8% 2) Utilities -.7% 3) Homebuilders -.6%

Stocks Falling on Unusual Volume: 

• GOOG, KMT, RCII, PCH, WAT, NEM, GRA, EXP, MAG, IT, AAN, PINC, XPEL, VIR and AIMT

Stocks With Unusual Put Option Activity:

• 1) BKLN 2) EWH 3) IRM 4) ASHR 5) FCEL

Stocks With Most Negative News Mentions:

• 1) AAN 2) RCII 3) LOPE 4) TNDM 5) SYY

Charts:

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