Stocks Reversing Sharply Lower into Final Hour on Global Recession Fears, Oil Decline, Technical Selling, Energy/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 28.6 -.8%
• Bloomberg Global Risk On/Risk Off Index 138.0 +31.0 points

• Euro/Yen Carry Return Index 130.35 +.39%

• Emerging Markets Currency Volatility(VXY) 11.33 -1.13%

• S&P 500 Implied Correlation 52.9 +7.0%

• ISE Sentiment Index 80.0 -32.0 points

• Total Put/Call .73 -12.0%

• NYSE Arms 1.58 +46.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.87 +1.89%
  

• US Energy High-Yield OAS 802.58 +.92%

• European Financial Sector CDS Index 63.81 +3.44%

• Italian/German 10Y Yld Spread 147.5 -3.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  58.83 -2.36%
  

• Emerging Market CDS Index 170.50 +1.16%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.86 unch.

• 2-Year Swap Spread 8.25 -.25 basis point

• TED Spread 13.75 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -.25 basis point
  
• MBS  5/10 Treasury Spread  90.0 +.75 basis point
  
• IHS Markit CMBX BBB- 6 67.0 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.50 -.10%
• 3-Month T-Bill Yield .11% unch.

• Yield Curve 54.0 +1.25 basis points
  

• China Iron Ore Spot 120.31 USD/Metric Tonne -.47%

• Citi US Economic Surprise Index 179.90 -3.2 points

• Citi Eurozone Economic Surprise Index 92.60 -1.1 points

• Citi Emerging Markets Economic Surprise Index 35.4 +6.1 points

• 10-Year TIPS Spread 1.70 -1.0 basis point
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +59 open in Japan 
• China A50 Futures: Indicating -127 open in China

• DAX Futures: Indicating -104 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.5%

Sector Underperformers:

• 1) Energy -2.6% 2) Oil Service -2.1% 3) Networking -1.6%

Stocks Falling on Unusual Volume: 

• EBIX, CARR, AZEK, ALE, MC, NBIX, SPTN, REG, DK, ELAN, ENR, CNK, TRHC, RPAY, ALBO, BCEI, VIR, ZUMZ, HLNE, LIND, HDS, GM, BGS, OXY, URBN, AVAV, GBT, OTRK, EOG, BIGC, SPWR, PRO, DCP, NKLA, LRN, POR, ATNX, STRO and PDCE
  

Stocks With Unusual Put Option Activity:

• 1) PBI 2) RH 3) XLY 4) ZS 5) AR
  

Stocks With Most Negative News Mentions:

• 1) GME 2) POR 3) PROG 4) HDS  5) CHDN
  

Charts:

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

 

Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%

Sector Outperformers:

• 1) Gaming +2.7% 2) Airlines +1.7% 3) Homebuilding +1.0%

Stocks Rising on Unusual Volume:

• VRTU, RH, KRA, OSTK, NAV, SLQT, PENN, SAGE, NLS, RDFN, PRPL, ODT, VRNT, DKNG, MD, W, AAN, NFE, IPOB and DLTH
  

Stocks With Unusual Call Option Activity:

• 1) YRCW 2) NAV 3) TPR 4) AGEN 5) SHY

Stocks With Most Positive News Mentions:

• 1) NAV 2) RH 3) BBBY 4) SAFM 5) CASY

Charts:

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

 

Morning Market Internals

NYSE Composite Index:

• Volume Running -22.6% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 59.0% of Issues Advancing, 37.9% Declining
• 43 New 52-Week Highs, 11 New Lows
• 47.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.8% 
• Bloomberg Global Risk-On/Risk-Off Index 210.0 +102.0 points
• Vix 28.0 -2.7%
• Total Put/Call .77 -7.2%
• TRIN/Arms 1.05 -2.78%

Stocks Substantially Higher into Afternoon on Oil Gain, Technical Buying, Short-Covering, Tech/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 28.8 -8.4%
• Bloomberg Global Risk On/Risk Off Index 123.0 +211.0 points

• Euro/Yen Carry Return Index 129.92 +.44%

• Emerging Markets Currency Volatility(VXY) 11.49 +.97%

• S&P 500 Implied Correlation 50.1 +.48%

• ISE Sentiment Index 112.0 -15.0 points

• Total Put/Call .82 -8.9%

• NYSE Arms 1.17 +10.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.1 -2.77%
  

• US Energy High-Yield OAS 793.80 +.69%

• European Financial Sector CDS Index 61.69 -2.0%

• Italian/German 10Y Yld Spread 151.25 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index  59.90 +1.73%
  

• Emerging Market CDS Index 168.85 -2.0%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.86 -.01%

• 2-Year Swap Spread 8.5 unch.

• TED Spread 13.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.75 basis point
  
• MBS  5/10 Treasury Spread  89.25 -.75 basis point
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.55 +.54%
• 3-Month T-Bill Yield .11% unch.

• Yield Curve 52.75 -4.25 basis points
  

• China Iron Ore Spot 122.01 USD/Metric Tonne +.58%

• Citi US Economic Surprise Index 183.10 -.8 point

• Citi Eurozone Economic Surprise Index 93.90 -2.0 points

• Citi Emerging Markets Economic Surprise Index 29.3 +3.4 points

• 10-Year TIPS Spread 1.71 +2.0 basis points
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +67 open in Japan 
• China A50 Futures: Indicating +69 open in China

• DAX Futures: Indicating +29 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long

 

Morning Markert Internals

NYSE Composite Index:

• Volume Running -16.5% Below 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 70.5% of Issues Advancing, 27.4% Declining
• 21 New 52-Week Highs, 16 New Lows
• 43.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.3% 
• Bloomberg Global Risk-On/Risk-Off Index 96.0 +183.0 points
• Vix 29.2 -7.3%
• Total Put/Call .81 -10.0%
• TRIN/Arms 1.60 +50.0%