Weekly Outlook

Click here for Wall St. Week Ahead by Reuters.

Click here for Stocks to Watch Monday by MarketWatch.

Click here for TradeTheNews.com Weekly Calendar.

BOTTOM LINE: I expect US stocks to finish the week mixed as seasonal strength, buyout speculation and less economic fear offsets emerging market worries, profit-taking and more shorting. My trading indicators are giving mixed signals and the Portfolio is 75% net long heading into the week

Market Week in Review

S&P 500 1,091.49 -.31%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 1,091.49 -.31%
DJIA 10,309.92 -.22%
NASDAQ 2,138.44 -.85%
Russell 2000 577.21 -1.45%
Wilshire 5000 11,048.12 -.49%
Russell 1000 Growth 485.38 -.23%
Russell 1000 Value 553.99 -.56%
Morgan Stanley Consumer 672.08 +.42%
Morgan Stanley Cyclical 780.02 -.79%
Morgan Stanley Technology 544.33 -.79%
Transports 3,922.84 -.84%
Utilities 375.71 +1.35%
MSCI Emerging Markets 40.16 -1.92%

Lyxor L/S Equity Long Bias Index 958.79 +.01%

Lyxor L/S Equity Variable Bias Index 846.31 -.55%

Lyxor L/S Equity Short Bias Index 977.63 -.36%

Sentiment/Internals
NYSE Cumulative A/D Line +60,618 +1.28%
Bloomberg New Highs-Lows Index -22 -450.0%
Bloomberg Crude Oil % Bulls 37.0 +42.3%
CFTC Oil Net Speculative Position +86,348 unch.

CFTC Oil Total Open Interest 1,250,074 unch.
Total Put/Call 1.04 +5.05%
OEX Put/Call 1.99 +23.60%
ISE Sentiment 92.0 -29.23%
NYSE Arms 4.66 +154.65%
Volatility(VIX) 24.74 +9.32%
G7 Currency Volatility (VXY) 14.14 +9.19%
Smart Money Flow Index 9,517.57 +1.74%

Money Mkt Mutual Fund Assets $3.330 Trillion -.2%
AAII % Bulls 41.67 -2.48%
AAII % Bears 41.67 +30.96%

Futures Spot Prices
CRB Index 273.09 -.43%

Crude Oil 76.05 -2.95%
Reformulated Gasoline 192.62 -2.35%
Natural Gas 5.19 +9.91%
Heating Oil 196.22 -2.07%
Gold 1,175.50 +2.51%
Bloomberg Base Metals 190.92 -.53%
Copper 312.55 +.24%

US No. 1 Heavy Melt Scrap Steel 210.67 USD/Ton -11.23%

China Hot Rolled Domestic Steel Sheet 3,754 Yuan/Ton +1.60%

S&P GSCI Agriculture 347.16 -.13%

Economy
ECRI Weekly Leading Economic Index 128.80 +1.26%

Citi US Economic Surprise Index -24.70 -11.26%

Fed Fund Futures imply 51.9% chance of no change, 48.1% chance of 25 basis point cut on 12/16

US Dollar Index 74.86 -.57%

Yield Curve 252.0 -12 basis points

10-year US Treasury Yield 3.21% -16 basis points

Federal Reserve’s Balance Sheet $2.189 Trillion -.11%

U.S. Sovereign Debt Credit Default Swap 31.0 unch.

10-year TIPS Spread 2.10% -9 basis points
TED Spread 24.0 -2 basis points
N. Amer. Investment Grade Credit Default Swap Index 105.25 +1.95%

Euro Financial Sector Credit Default Swap Index 79.67 +10.15%
Emerging Markets Credit Default Swap Index 279.17 +3.80%
CMBS Super Senior AAA 10-year Treasury Spread 484.0 unch.

M1 Money Supply $1.691 Trillion -1.60%

Business Loans 679.20 +3.38%
4-Wk MA of Jobless Claims 496,500 -3.2%

Continuing Claims Unemployment Rate 4.1% -20 basis points
Average 30-year Mortgage Rate 4.78% -5 basis points
Weekly Mortgage Applications 601.0 -4.47%

ABC Consumer Confidence -47 -2 points
Weekly Retail Sales +2.10% +30 basis points
Nationwide Gas $2.63/gallon -.01/gallon
US Heating Demand Next 7 Days 16.0% below normal
Baltic Dry Index 3,974 -11.83%

Oil Tanker Rate(Arabian Gulf to US Gulf Coast) 30.0 -7.69%

Rail Freight Carloads 213,382 +2.56%

Iraqi 2028 Govt Bonds 74.94 -.75%

Best Performing Style
Large-Cap Growth -.23%

Worst Performing Style
Small-Cap Value -1.62%

Leading Sectors
HMOs +3.89%

Telecom +3.02%

Airlines +2.65%

Medical Equipment +2.55%
Drugs +1.83%

Lagging Sectors
Homebuilders -2.74%
Coal -3.23%
Networking -3.31%
REITs -3.45%
I-Banks -4.29%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish Lower, Weighed Down by Commodity, Insurance, REIT and Bank Shares

Evening Review
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After-hours Stock Chart

Stocks Lower into Final Hour on Mid-East Financial Worries, Profit-Taking, More Shorting

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Technology longs, Financial longs and Retail longs. I added (IWM)/(QQQQ) hedges and added to my (EEM) short today, thus leaving the Portfolio 75% net long. The tone of the market is very negative as the advance/decline line is substantially lower, almost every sector is falling and volume is very light. Investor anxiety is very high. Today’s overall market action is bearish. The VIX is rising +19.68% and is high at 24.51. The ISE Sentiment Index is low at 90.0 and the total put/call is high at 1.02. Finally, the NYSE Arms has been running extraordinarily high most of the day, hitting 10.0 at its intraday peak, and is currently 4.0. The Euro Financial Sector Credit Default Swap Index is falling -.12% to 76.37 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is rising +2.84% to 105.25 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is rising +2 basis points to 24 basis points. The TED spread is now down 442 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising +17.89% to 34.19 basis points. The Libor-OIS spread is unch. at 12 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is down -4 basis points to 2.11%, which is down -54 basis points since July 7th. The 3-month T-Bill is yielding .02%, which is down -2 basis points today. Many market leading stocks are substantially outperforming the broad market. Healthcare-related, Airline, Education, Retail and Telecom shares are holding up pretty well also. I am hearing Black Friday sales are likely to exceed expectations. The rebound in European shares and muted reaction in the North Amer. Inv. Grade CDS Index are also big positives. The extraordinarily high NYSE Arms reading on light volume is a positive. On the negative side, the market’s severe negative reaction to news that was out early Wed. morning is somewhat puzzling. I suspect the yen’s recent accelerating strength and rising overcapacity worries out of China are also big culprits. Asian shares have been trading poorly for a few days now. I will closely monitor the market’s internal reaction to next week’s likely positive news before further shifting exposure. Nikkei futures indicate an +114 open in Japan and DAX futures indicate a -3 open in Germany on Monday. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, bargain hunting, lower energy prices, falling long-term rates, less financial sector fear, retail sector optimism and seasonal strength.

Today's Headlines

Bloomberg:

- Royal Bank of Scotland Group Plc was the biggest underwriter of loans to Dubai World, the state company seeking to reschedule debt, while HSBC Holdings Plc has the most at risk in the United Arab Emirates, according to JPMorgan Chase & Co.

- European stocks advanced, rebounding from biggest drop in seven months for the Dow Jones Stoxx 600 Index, as concern over Dubai’s attempt to delay its debt repayments abated. Royal Bank of Scotland Group Plc, which was Dubai World’s biggest loan arranger since January 2007 according to JPMorgan Chase & Co., climbed 5.2 percent, having plunged to a seven- month low yesterday. Michelin & Cie., the world’s second-largest tiremaker, and Volkswagen AG, Europe’s biggest carmaker, led auto stocks higher after the Stoxx 600 Automobiles and Parts Index sank 4.3 percent yesterday. The Stoxx 600 gained 1.3 percent to 242.85 at 4:40 p.m. in London, having earlier dropped as much as 1.8 percent. “There’s a strong signal that we’re not going to let a country like that fall,” said Kilian de Kertanguy, a fund manager at Cholet-Dupont Gestion SA in Paris, which oversees about $2.3 billion.

- European confidence in the economic outlook improved in November to the highest since the collapse of Lehman Brothers Holdings Inc., suggesting the recovery in the 16-nation euro region is gathering strength. An index of executive and consumer sentiment rose for an eighth straight month to 88.8 from 86.1 in October, the European Commission in Brussels said today. That was the highest since September 2008, when Lehman filed the biggest bankruptcy in U.S. history, compounding the financial crisis.

Wall Street Journal:

- Best Buy Co. (BBY) Chief Executive Brian Dunn said his early reports from the electronics retailer's stores indicate shopper traffic is up over last year and that shoppers are in a buying mood. "In this connected world we live in, I have been getting updates all morning, and our crowds--first in the East and then within the Central part as those stores opened up-- were materially bigger than last year, and the West Coast reports, too, are the same," Dunn said in an interview with Dow Jones Newswires. "The (traffic) numbers are definitely up over last year," he said. "I'm about to close out my third quarter, so I have to be careful what I say, but we are definitely seeing a lot of shoppers." Dunn wouldn't comment more specifically on sales trends so far, but he reiterated his belief that Best Buy has planned inventory and promotions well for the holiday. Last year, retailers had too much inventory and had to make deep discounts as they approached Christmas, he said. But this year, Best Buy has more opportunity to "strategically build our inventory in places that matter to the consumer," he said. "We're not going to disappoint customers and we're not going to disappoint our shareholders."

- Hersey Co. received indications it could raise at least $10 billion from two banks, JPMorgan Chase and Bank of America’s Merrill Lynch unit, towards a possible $17 billion bid for Cadbury Plc.

- Discounters were doing well early Black Friday morning, with door-busters bringing in big crowds, while higher-end and some apparel retailers were seeing somewhat muted traffic despite big discounts. Mass merchants like Wal-Mart Stores Inc. and Target Corp., as well as lower-end department stores like J.C. Penney Co. and electronics retailer Best Buy Inc., saw strong demand for big sales items, with electronics an early winner. But there was some robust demand for tougher-sell items like cookware and jewelry.

CNBC:

- Dubai's debt woes may serve as a catalyst for a correction in stock markets but it does not signal a new crisis, investment manager Mohammed El-Erian told CNBC Friday.

MarketWatch.com

- Contrarians give thanks. Average adviser remains surprisingly pessimistic.

Washington Post:

- In U.S. history, there may have been no better time to own a junk car, a rattling old fridge and a leaking dishwasher. On the heels of its ballyhooed "Cash for Clunkers" program for cars, the federal government is expected to finalize details in the coming weeks of another tax-supported shopping extravaganza, known as "Cash for Appliances." Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models. And like the $3 billion cars program that gave consumers money for swapping their clunkers for more fuel-efficient rides, the appliance initiative seems destined to inspire shoppers, drive up sales for a while and profoundly divide economists over how much lasting good this chunk of government spending will do for the economy.

The Business Insider:

- The California housing market was supposed to have started crashing again by now, according to those who have ridiculed the uptick of the past few months as a head fake.As of October, however, California appears to be hanging in there.

- Black Friday Sales Frenzy Explodes As Americans Kiss Recession Goodbye. Judging from the fire hose of tweets this morning, Walmart is doing some brisk Black Friday business.

- JPMorgan: Stop Freaking Out, The UAE Can Easily Save Dubai.

Reuters:

- Activision Blizzard Inc said on Friday its "Call of Duty" video game franchise pushed past the $3 billion mark in global retail sales.

The Economic Times:

- I think there are some terms been negotiated that if Abu Dhabi does bail out Dubai with a $10 billion emergency loan kind of a thing right now -I think the payment is due on 12th - so then what are the terms and how they would like Dubai’s economy and financials to be manage hereafter. Now the way things stand today already the CDS spread and the sovereign yield they have gone up world over, people are again getting concerned whether the debt obligations will be met on 12th. The majority view is that within UAE Abu Dhabi is still financially strong, this is a very comfortable position to bail out Dubai, so over the weekend some solution will emerge and may be early next week Monday you will see that Dubai Authorities announcing that they are in the position to meet their debt obligations. That is a most likely scenario.