Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%

Sector Outperformers:

• 1) Oil Service +4.4% 2) Energy +2.7% 3) Steel +2.5%

Stocks Rising on Unusual Volume:

• MULE, FSCT, DXPE, ARNA, PRTA, FB, AVHI, AVYA, DLTH, ELLI, ERF, GPRK, FDX, ESTE, CM, LFIN, SCS, CVTI, PQG, HLF, MINI, SGH, HUBS, AKAO, TWTR and CISN

Stocks With Unusual Call Option Activity:

• 1) TROX 2) DHI 3) MULE 4) XLB 5) LQD

Stocks With Most Positive News Mentions:

• 1) PLCE 2) KMI 3) GLOG 4) RIG 5) PRTA

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -9.6% Below 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 63.0% of Issues Advancing, 34.3% Declining
• 45 New 52-Week Highs, 97 New Lows
• 45.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.2%
• Vix 17.3 -5.0%
• Total Put/Call 1.09 +31.3%
• TRIN/Arms .76 -18.1%

Wednesday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 76.25 +9.25 basis points(new series). 
• Asia Pacific Sovereign CDS Index 13.0 +1.0 basis point.
• Bloomberg Emerging Markets Currency Index 74.84 +.07%.
• FTSE 100 futures -.06%.
• S&P 500 futures +.10%.
• NASDAQ 100 futures +.04%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ATU)/.14
• (GIS)/.78
• (WGO)/.64
• (FIVE)/1.17
• (GES)/.54
• (MLHR)/.50
• (SCHL)/-1.04

Economic Releases
8:30 am EST

• The Current Account Balance for 4Q is estimated at -$125.0B versus -$100.6B in 3Q.

10:00 am EST

• Existing Home Sales for February are estimated to rise to 5.4M versus 5.38M in January.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,539,000 barrels versus a +5,022,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -2,046,920 barrels versus a -6,271,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,006,380 barrels versus a -4,360,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.03% versus a +2.0% gain prior.

2:00 pm EST

• The FOMC is expected to raise the benchmark Fed Funds Rate +.25%  to 1.5%-1.75%.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed Press Conference, UK Employment report, weekly MBA Mortgage Applications report and the (ESIO) analyst conference could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by financial and commodity 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 Rising into Final Hour on Technical Buying, Oil Gain, Yen Weakness, Energy/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.59 -2.6%

• Euro/Yen Carry Return Index 135.86 -.34%

• Emerging Markets Currency Volatility(VXY) 7.88 -.76%

• S&P 500 Implied Correlation 43.97 +2.64%

• ISE Sentiment Index 83.0 +23.8%
  

• Total Put/Call .90 -11.76%

• NYSE Arms .92 -51.23%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.29 +13.81% (new series)
  

• America Energy Sector High-Yield CDS Index 421.0 +3.34%

• European Financial Sector CDS Index 62.65 +18.13%

• Italian/German 10Y Yld Spread 131.25 -8.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.92 +7.85%

• Emerging Market CDS Index 143.07 +16.67%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.53 +.01%

• 2-Year Swap Spread 30.5 +.25 basis point

• TED Spread 41.25 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -17.25 +2.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 74.81 -.14%
• 3-Month T-Bill Yield 1.79% +3.0 basis points
  

• Yield Curve 54.75 unch.

• China Iron Ore Spot 66.30 USD/Metric Tonne +.91%

• Citi US Economic Surprise Index 41.4 -.7 point

• Citi Eurozone Economic Surprise Index -37.90 -5.1 points

• Citi Emerging Markets Economic Surprise Index 38.50 -.4 point

• 10-Year TIPS Spread 2.09 +1.0 basis point
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -60 open in Japan 
• China A50 Futures: Indicating +54 open in China

• DAX Futures: Indicating +37 open in Germany

Portfolio: 

• Slightly Higher: On gains in my industrial/medical/tech 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

Today's Headlines

Bloomberg:

• Trump Welcomes Saudi Crown Prince to U.S. as ‘Great Purchaser’. President Donald Trump welcomed Saudi Crown Prince Mohammed Bin Salman as a friend of the U.S. and “big purchaser” of American armaments and investments. “A lot of people are at work” because of Saudi Arabia’s business, Trump said, adding that the kingdom has finalized $12.5 billion in purchases of planes, missiles and frigates from U.S. companies. Prince Mohammed praised the kingdom’s “really deep” relationship with the U.S. and said the Saudis are considering $400 billion in U.S. investment opportunities.

• China's Aim to Remove Cancer Drug Taxes May Boost Pfizer(PFE), Glaxo.

• Trump's China Trade Spat Stirs Little Concern in Stock Market. (video)

• Tech Stocks Decouple From Facebook(FB). Facebook added to losses in high-flying tech peers on Monday. But today, they’re standing strong.

• California Is About to Get Hit With More Mudslides.

• As Fed Rate Fears Ebb, Dividend ETF Sees 27th Week of Inflows.

• Chinese Companies Are Buying Up Cash-Strapped U.S. Colleges.

Wall Street Journal:

• House Speaker Ryan Says Trump Won’t Fire Special Counsel in Russia Probe. Lawmaker declined to say who provided the assurances nor how Congress would react if Trump moved to end Robert Mueller’s probe, as concerns grow about president’s attacks.

• Package Explodes at FedEx Facility in Texas, Following Austin Bombs. Blast outside San Antonio may be linked to ‘serial bomber’ in Austin, FBI says.

• Banking on Deregulation Is Still a Good Bet. Despite some last-minute jitters in Washington, regulatory relief looks to be coming for small and medium-size banks. 

• China’s Leaders Smooth Trade Tensions but Talk Tough on Taiwan. But Premier Li Keqiang and President Xi Jinping took a stern line on Taiwan, warning against attempts to divide China.

MarketWatch.com:

• Your data is at risk on Facebook(FB), but so is your mental health.

Fox News:

• Shooter dead, two injured after shooting at Great Mills High School in Maryland. (video)

• Obama 2012 campaign 'sucked' data from Facebook, former official says. (video)

CNBC:

• Republicans scramble to release spending bill as government shutdown deadline nears. (video)

• Amazon's(AMZN) secretive health team talking with AARP about making products for older people.

• Venture firm Sequoia is building a $12 billion war chest after SoftBank raises stakes.

• Californians fed up with housing costs and taxes are fleeing state in big numbers. (video)

• Amazon(AMZN) shares could 'easily' hit $1,900 this year, Goldman Sachs says.

• Hedge fund managers that do the most research will post the best returns returns, study suggests.

• The suddenly hot job market for workers over 50.

• Zuckerberg has sold more Facebook(FB) stock in the last 3 months than any insider at any other company.

Zero Hedge:  

• Trump Calls Putin To Congratulate Him On Re-election Victory.

• Why Citi Is Suddenly Freaking Out About The Exploding LIBOR-OIS. (graph)

• The Problem Is Facebook(FB), Not Cambridge Analytica.

• Tempe Police Say "No Fault By Uber" In Fatal Crash.

• Fourth Nor'Easter Of The Month Could Paralyze North East (Again).

• Wall Street Unexpectedly Turns Extremely Bearish On Global Growth. (graph)

• Facebook(FB) Shares Extend Plunge After FTC Probe Revealed.

• Emperor Xi Delivers Stark Warning To Trump: Hands Off Taiwan.

Bear Radar

Style Underperformer:

• Small-Cap Value -.2%

Sector Underperformers:

• 1) Social Media -1.4% 2) Retail -.6% 3) Gold & Silver -.6%

Stocks Falling on Unusual Volume: 

• DLTH, GPI, PLCE, FB, LX, ORCL, DRNA, TWTR, ADAP, CAH and ORCL

Stocks With Unusual Put Option Activity:

• 1) ORCL 2) O 3) MTOR 4) CBOE 5) SPWR

Stocks With Most Negative News Mentions:

• 1) GPI 2) FB 3) ORCL 4) TWTR 5) QRVO

Charts:

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