Weekly Outlook

U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, some disappointing earnings outlooks, profit-taking, more shorting, technical selling, high energy prices and Eurozone debt angst. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.

Market Week in Review

S&P 500 1,316.33 +.07%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,316.33 +.07%
  
• DJIA 12,660.40 -.47%
  
• NASDAQ 2,816.55 +1.07%
  
• Russell 2000 796.96 +1.32%
  
• Wilshire 5000 13,712.10 +.40%
  
• Russell 1000 Growth 615.83 +.91%
  
• Russell 1000 Value 651.53 -.92%
  
• Morgan Stanley Consumer 776.59 -.43%
  
• Morgan Stanley Cyclical 979.10 +.85%
• Morgan Stanley Technology 643.14 +.27%
  
• Transports 5,344.78 +1.21%
  
• Utilities 447.97 -.13%
  
• MSCI Emerging Markets 42.07 +2.28%
  
• Lyxor L/S Equity Long Bias Index 997.38 +.76%
  
• Lyxor L/S Equity Variable Bias Index 817.85 unch.
  
• Lyxor L/S Equity Short Bias Index 556.57 -1.50%
  

Sentiment/Internals

• NYSE Cumulative A/D Line 138,961 +2.27%
  
• Bloomberg New Highs-Lows Index 241 +74
  
• Bloomberg Crude Oil % Bulls 47.0 +4.44%
  
• CFTC Oil Net Speculative Position 177,845 +3.87%
  
• CFTC Oil Total Open Interest 1,341,810 -2.84%
  
• Total Put/Call .88 +11.39%
  
• OEX Put/Call 1.04 -12.61%
  
• ISE Sentiment 139.0 +46.32%
  
• NYSE Arms 1.78 +63.30%
  
• Volatility(VIX) 18.53 +1.37%
• S&P 500 Implied Correlation 73.79 -3.27%
  
• G7 Currency Volatility (VXY) 10.30 +.68%
  
• Smart Money Flow Index 10,343.81 +1.25%
  
• Money Mkt Mutual Fund Assets $2.692 Trillion unch.
  
• AAII % Bulls 48.40 +2.48%
  
• AAII % Bears 18.91 -19.94%

Futures Spot Prices

• CRB Index 317.57 +2.47%
  
• Crude Oil 99.56 +1.19%
  
• Reformulated Gasoline 292.68 +5.07%
  
• Natural Gas 2.76 +15.94%
  
• Heating Oil 307.04 +2.33%
  
• Gold 1,735.40 +3.93%
  
• Bloomberg Base Metals Index 232.63 +5.26%
  
• Copper 388.90 +3.80%
  
• US No. 1 Heavy Melt Scrap Steel 401.67 USD/Ton unch.
  
• China Iron Ore Spot 139.80 USD/Ton unch.
• Lumber 237.50 -1.29%
  
• UBS-Bloomberg Agriculture 1,519.49 +1.82%
  

Economy

• ECRI Weekly Leading Economic Index Growth Rate -6.50% +100 basis points
• Philly Fed ADS Real-Time Business Conditions Index .0088 -59.45%
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 107.15 +.49%
  
• Citi US Economic Surprise Index 65.40 -5.8 points
  
• Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 3/13
  
• US Dollar Index 78.84 -1.65%
  
• Yield Curve 168.0 -10 basis points
  
• 10-Year US Treasury Yield 1.89% -13 basis points
  
• Federal Reserve's Balance Sheet $2.902 Trillion +.04%
  
• U.S. Sovereign Debt Credit Default Swap 45.09 -1.05%
  
• Illinois Municipal Debt Credit Default Swap 225.0 +1.83%
  
• Western Europe Sovereign Debt Credit Default Swap Index 331.47 -4.60%
• Emerging Markets Sovereign Debt CDS Index 270.83 -6.23%
  
• Saudi Sovereign Debt Credit Default Swap 137.26 -5.72%
• Iraqi 2028 Government Bonds 78.22 -1.26%
• China Blended Corporate Spread Index 680.0 -19 basis points
  
• 10-Year TIPS Spread 2.10% +7 basis points
  
• TED Spread 50.0 -2 basis points
  
• 3-Month Euribor/OIS Spread 78.0 -7 basis points
  
• 3-Month EUR/USD Cross-Currency Basis Swap -72.75 +3.5 basis points
  
• N. America Investment Grade Credit Default Swap Index 101.14 -6.80%
  
• Euro Financial Sector Credit Default Swap Index 177.22 -9.94%
  
• Emerging Markets Credit Default Swap Index 265.54 -6.18%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 220.0 +5 basis points
  
• M1 Money Supply $2.219 Trillion -.43%
  
• Commercial Paper Outstanding 971.40 +.40%
  
• 4-Week Moving Average of Jobless Claims 377,500 -.70%
  
• Continuing Claims Unemployment Rate 2.8% +10 basis points
  
• Average 30-Year Mortgage Rate 3.98% +10 basis point
  
• Weekly Mortgage Applications 775.60 -4.96%
  
• Bloomberg Consumer Comfort -46.4 +1.0 point
  
• Weekly Retail Sales +2.90% -20 basis points
  
• Nationwide Gas $3.39/gallon unch.
  
• U.S. Heating Demand Next 7 Days 25.0% below normal
• Baltic Dry Index 726.0 -15.78%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 -6.67%
  
• Rail Freight Carloads 219,706 -4.10%
  

Best Performing Style

• Small-Cap Growth +1.61%

Worst Performing Style

• Large-Cap Value -.92%

Leading Sectors

• Gold & Silver +8.37%
  
• Airlines +7.83%
  
• Coal +3.94%
• Computer Hardware +3.57%
• Medical Equipment +2.92%

Lagging Sectors

• Banks -1.45%
• Defense -1.58%
  
• Telecom -1.64%
• Papers -2.35%
• I-Banks -2.96%

Weekly High-Volume Stock Gainers (14)

• ILMN, IPHI, MITI, JCP, CA, FLDM, PLCM, DAL, JAH, NUVA, SAVE, VLTR, KNX and ANGO
  

Weekly High-Volume Stock Losers (18)

• CBU, WWD, MRCY, CR, SON, KSU, RBN, THS, WLP, PJC, MTZ, SNDK, GLW, CRR, CCOI, IDCC, TWIN and MNTA
  

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers
  

*5-Day Change

Stocks Slightly Lower into Final Hour on Global Growth Fears, Profit-Taking, Some Earnings Disappointments

Broad Market Tone:

• Advance/Decline Line: Higher
  
• Sector Performance: Mixed
  
• Volume: Below Average
  
• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• VIX 18.46 -.59%
  
• ISE Sentiment Index 130.0 +73.33%
  
• Total Put/Call .95 -2.06%
  
• NYSE Arms 1.48 -20.65%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 101.14 +.70%
  
• European Financial Sector CDS Index 177.12 -1.93%
  
• Western Europe Sovereign Debt CDS Index 331.63 -.37%
  
• Emerging Market CDS Index 266.87 -.05%
  
• 2-Year Swap Spread 32.0 -1 bp
  
• TED Spread 50.0 -1 bp
  
• 3-Month EUR/USD Cross-Currency Basis Swap -73.0 -4.0 basis points
  

Economic Gauges:

• 3-Month T-Bill Yield .05% unch.
  
• Yield Curve 169.0 -3 bps
  
• China Import Iron Ore Spot $139.80/Metric Tonne unch.
  
• Citi US Economic Surprise Index 65.40 -3.2 points
  
• 10-Year TIPS Spread 2.10 -1 bp
  

Overseas Futures:

• Nikkei Futures: Indicating -26 open in Japan
• DAX Futures: Indicating +6 open in Germany

Portfolio:

• Higher: On gains in my Technology, Biotech, Medical and Retail sector longs
  
• Disclosed Trades: Added to my (IWM), (QQQ) hedges and then covered some of them, added to my (GOOG) long and took profits in another tech long
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bearish, as the S&P 500 trades slightly lower, but near session highs, on more global growth fears, profit-taking, more shorting, technical selling, high energy prices and some earnings disappointments. On the positive side, Coal, Alt Energy, Oil Service, Gold & Silver, Hospital, HMO and Airline shares are especially strong, rising more than +1.25%. Small-caps are outperforming. The UBS-Bloomberg Ag Spot Index is falling -.5% and Oil is down -.25%. Oil continues to trade poorly given the recent uptick in saber-rattling from Iran, escalating violence in Mid-east, better US economic data and euro bounce. Major Asian indices rose around +.5% overnight, led by a +.92% gain in India shares. The Germany sovereign cds is falling -2.25% to 85.0 bps, the Italy sovereign cds is down -5.4% to 399.17 bps, the France sovereign cds is falling -3.2% to 166.0 bps and the Belgium sovereign cds is down -5.72% to 240.0 bps. The Italian/German 10Y Yield Spread is falling -3.4% to 403.95 bps. On the negative side, Energy, Utility, Defense and Drug shares are under pressure, falling more than -.5%. The Portugal sovereign cds is up +2.68% to 1,433.35 bps(+32.5% in 10 days to new record high), the Japan sovereign cds is gaining +2.7% to 132.36 bps, the Hungary sovereign cds is rising +1.2% to 581.0 bps and the Brazil sovereign cds is rising +1.75% to 147.17 bps. Lumber has declined -11.0% since its Dec. 29th high and is still near the lower end of its recent range(near a multi-year low) despite the better US economic data, more dovish Fed commentary, improving sentiment towards homebuilders, equity rally and decline in eurozone debt angst. Moreover, the Baltic Dry Index has plunged over -60.0% from its Oct. 14th high and is now down over -50.0% ytd. The 10Y T-Note Yield is falling -4 bps to 1.89% and remains a large concern considering the recent stock rally, falling Eurozone debt angst and improvement in US economic data. The Western Europe Sovereign CDS Index is still near its Jan. 9th all-time high. The TED spread is near the highest since May 2009. The 2Y Euro Swap Spread is near the highest since Nov. 2008. The 3M Euribor-OIS spread is near the highest since February 2009. The Libor-OIS spread is still very near the widest since May 2009, which is also noteworthy considering the equity surge off the recent lows. Overall, the improvement in credit gauges appears to be stalling at still stressed levels, which may be related to rising concerns surrounding Portugal. China Iron Ore Spot has plunged -22.8% since Sept. 7th of last year. Shanghai Copper Inventories are up over 300.0% ytd to the highest level since March of last year. Bloomberg ran a concerning story last night on India’s most expensive property market. Residential home sales in Mumbai hit a 3-year low in December as prices hit another record. The city’s unsold inventory hit 44 months worth(healthy market normally has around 8 months) at the current absorption rate. Major European indices fell around -1.0%, with the Bloomberg European Bank/Financial Services Index falling -.87%. European equities continue to price in a pause in the debt crisis and a stabilization in economic growth. While the "debt crisis can" appears to have been kicked again, economic growth is likely to contract further in the region over the coming months as more austerity measures take hold. The Philly Fed’s ADS Real-Time Business Conditions Index has stalled over the last 3 weeks after showing meaningful improvement from mid-Nov. through year-end. Equity investors are currently pricing in a successful outcome to the Greece bailout talks and a calming in Portugal's serious debt situation. I am more concerned about the latter. Volume is poor today and trading has an unstable feel. For an intermediate-term equity advance from current levels, I would still expect to see further European credit gauge improvement, subsiding hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices and higher-quality stock market leadership. One of my longs, (GOOG), is bouncing strongly off its 200-day moving average ahead of Facebook's IPO, which will make its shares look even cheaper. I think the shares offer compelling value around current levels and should outperform over the intermediate-term. I expect US stocks to trade mixed-to-higher into the close from current levels on less Eurozone debt angst, short-covering and more tech/financial sector optimism.

Bear Radar

Style Underperformer:

• Large-Cap Value -.70%

Sector Underperformers:

• 1) Utilities -1.40% 2) Energy -.60% 3) Restaurants -.50%

Stocks Falling on Unusual Volume:

• RVBD, JNPR, DISH, LO, AEP, CVX, BP, FRAN, CRUS, ABAX, OMCL, ABFS, IDXX, HUBG, SBUX, ESIO, JDSU, MIND, YRCW, HBHC, CHRW, CAVM, PLXS, DISH, RHI, FRAN, KMP, F, CB, LM, QUAD, GDOT, DV, ARBA, FICO, RHI and NRGY
  

Stocks With Unusual Put Option Activity:

• 1) RVBD 2) LO 3) ECA 4) CB 5) CRR
  

Stocks With Most Negative News Mentions:

• 1) CLF 2) JNPR 3) RVBD 4) NRGY 5) AEP
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.63%

Sector Outperformers:

• 1) Gold & Silver +1.75% 2) Airlines +1.73% 3) Oil Service +1.46%

Stocks Rising on Unusual Volume:

• CCI, SA, CPHD, INFA, SYNA, QGLC, KLAC, TSRA, STX, FSLR, CLNE, SGEN, EMN, WMS, ATE, ELX, NWL, RMD, SOA, INVN, HUN, UAL, ROC, KND and GDP
  

Stocks With Unusual Call Option Activity:

• 1) FTR 2) CHRW 3) INFA 4) CIGX 5) JAG
  

Stocks With Most Positive News Mentions:

• 1) SBUX 2) BA 3) CPHD 4) JCP 5) LMT
  

Charts:

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