Stocks Lower into Afternoon on Profit-Taking, Oil Decline, Yen Strength, Financial/Telecom Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 11.79 +.68%

• Euro/Yen Carry Return Index 123.81 -.49%

• Emerging Markets Currency Volatility(VXY) 9.58 -2.04%

• S&P 500 Implied Correlation 46.61 +1.05%

• ISE Sentiment Index 92.0 unch.
  

• Total Put/Call .76 -8.43%

• NYSE Arms 1.64 +7.86%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.69 +.45%
  

• America Energy Sector High-Yield CDS Index 359.0 -2.69%

• European Financial Sector CDS Index 94.88 +1.03%

• Western Europe Sovereign Debt CDS Index 22.67 +7.80%

• Asia Pacific Sovereign Debt CDS Index 25.18 +.28%

• Emerging Market CDS Index 214.82 +1.15%
  

• iBoxx Offshore RMB China Corporate High Yield Index 134.91 +.23%

• 2-Year Swap Spread 36.25 +1.0 basis point

• TED Spread 55.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -27.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.57 -.36%
• 3-Month T-Bill Yield .50% -1.0 basis point

• Yield Curve 117.0 -2.0 basis points
  

• China Import Iron Ore Spot $90.50/Metric Tonne -.92%

• Citi US Economic Surprise Index 45.70 -1.7 points

• Citi Eurozone Economic Surprise Index 70.20 -.5 point

• Citi Emerging Markets Economic Surprise Index 46.30 -.1 point

• 10-Year TIPS Spread 2.02 -2.0 basis points
• 61.3% chance of Fed rate hike at May 3 meeting, 74.7% chance at June 14 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -148 open in Japan 
• China A50 Futures: Indicating -13 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

• Higher: On gains in my in my retail/medical sector longs and emerging market shorts

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.2%

Sector Underperformers:

• 1) Banks -1.2% 2) Computer Hardware -1.0% 3) Telecom -.9%

Stocks Falling on Unusual Volume: 

• HCLP, DGI, BPT, BNFT, ZOES, HPE, NCMI, ACIA, BIDU, BGS, MGA, BCC, LGND, RWT, PEI, KBR, SEMG, RICE, SND, CRZO, TDS and EMES

Stocks With Unusual Put Option Activity:

• 1) HZNP 2) CRC 3) XLU 4) AVP 5) JCP

Stocks With Most Negative News Mentions:

• 1) ACIA 2) HPE 3) JACK 4) HGG 5) CRK

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.2%

Sector Outperformers:

• 1) Retail +2.3% 2) Hospitals +1.7% 3) Utilities +1.12%

Stocks Rising on Unusual Volume:

• AAOI, AXDX, OLED, RH, INCY, FL, KEM, EHTH, BL, TVTY, WK, CONE, JWN, DDS, WB, NUS, SEM, BJRI, PEGA, LB, SINA, SPNC, UCTT, GTLS, TPC, SEM, MTZ, RLGY, INTU, CENX, GPS, THC, FSLR, CRI, NWL, STZ and COTV

Stocks With Unusual Call Option Activity:

• 1) JONE 2) OIH 3) HZNP 4) OLED 5) HPE

Stocks With Most Positive News Mentions:

• 1) RH 2) JWN 3) OLED 4) THC 5) INTU

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +22.1% Above 100-Day Average
• 5 Sectors Rising, 5 Sectors Declining
• 35.3% of Issues Advancing, 60.9% Declining
• 59 New 52-Week Highs, 15 New Lows
• 62.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.0%
• Vix 12.2 +4.4%
• Total Put/Call .74 -10.8%
• TRIN/Arms 1.44 -5.8%

Friday Watch

Night Trading 

• Asian equity indices are -.50% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 95.5 +.25 basis point.
• Asia Pacific Sovereign CDS Index 25.25 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 71.83 -.01%. 
• S&P 500 futures -.11%. 
• NASDAQ 100 futures -.12%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BCC)/-.04
• (COG)/.01
• (FL)/1.32
• (JCP)/.61
• (MGA)/1.35
• (RDC)/-.09

Economic Releases

10:00 am EST

• New Home Sales for January are estimated to rise to 570K versus 536K in December. 
• Final Univ. of Mich. Consumer Sentiment for February is estimated to rise to 96.0 versus a prior estimate of 95.7.  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Canadian inflation report and the (ETN) analyst conference could also impact trading today.

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

Stocks Reversing Slightly Higher into Final Hour on Economic Optimism, Less European/Emerging Markets/US High-Yield Debt Angst, Oil Gain, Energy/Drug Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 11.80 +.51%

• Euro/Yen Carry Return Index 124.47 +.39%

• Emerging Markets Currency Volatility(VXY) 9.73 -.21%

• S&P 500 Implied Correlation 46.07 +1.99%

• ISE Sentiment Index 105.0 +66.7%
  

• Total Put/Call .81 -8.99%

• NYSE Arms 1.51 +7.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.0 -.85%
  

• America Energy Sector High-Yield CDS Index 359.0 -2.69%

• European Financial Sector CDS Index 93.91 +.01%

• Western Europe Sovereign Debt CDS Index 21.02 -7.11%

• Asia Pacific Sovereign Debt CDS Index 25.09 -1.92%

• Emerging Market CDS Index 213.81 -1.59%
  

• iBoxx Offshore RMB China Corporate High Yield Index 134.83 +.10%

• 2-Year Swap Spread 35.25 +.75 basis point

• TED Spread 54.5 +2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -27.75 +.5 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.88 +.36%
• 3-Month T-Bill Yield .51% -1.0 basis point

• Yield Curve 119.0 unch.
  

• China Import Iron Ore Spot $91.34/Metric Tonne -3.14%

• Citi US Economic Surprise Index 45.70 -1.7 points

• Citi Eurozone Economic Surprise Index 70.70 -1.2 points

• Citi Emerging Markets Economic Surprise Index 46.40 -1.2 points

• 10-Year TIPS Spread 2.04 -1.0 basis point
• 62.7% chance of Fed rate hike at May 3 meeting, 75.4% chance at June 14 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -51 open in Japan 
• China A50 Futures: Indicating +5 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio: 

• Slightly Lower: On losses in my in my biotech/retail sector longs 

• Disclosed Trades: None

• Market Exposure: 100% Net Long