Bull Radar

Style Outperformer:

• Mid-Cap Growth +.5%

Sector Outperformers:

• 1) Homebuilders +2.8% 2) Video Gaming +2.0% 3) Airlines +1.5%

Stocks Rising on Unusual Volume:

• BZH, SLDB, LITE, NTLA, VSM, ARMK, EQT, HUYA, IIVI, AAP, WPP, ZNH, DVMT, TSEM, PLUS, IGV, UL, ASTE, KRNT, MLCO, PS, GDS, OPTN, CRUS, ERI, FNSR and CALX

Stocks With Unusual Call Option Activity:

• 1) DISCA 2) SRE 3) BKS 4) CI 5) CARS

Stocks With Most Positive News Mentions:

• 1) BZH 2) AAP 3) GE 4) NVDA 5) ARMK

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +19.5% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 66.9% of Issues Advancing, 30.8% Declining
• 17 New 52-Week Highs, 106 New Lows
• 28.70% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.1%
• Vix 19.4 -5.0%
• Total Put/Call 1.01 -14.4%
• TRIN/Arms 1.01 -42.6%

Tuesday Watch

Evening Headlines

Bloomberg:         

• China's Government Has More Room to Leverage Up as Growth Slows.

• Asia Stocks Slide After U.S. Sell-off; Yields Drop. Asian stocks tumbled at the open on Tuesday, with Japanese benchmarks sliding more than 3 percent, following a tech-led slump on Wall Street overnight thanks to a deteriorating outlook for iPhone sales. Treasury yields dropped and the yen headed higher. Key indexes slid from Tokyo and Seoul to Sydney, and futures in Hong Kong pointed to a significant drop. Apple Inc. suppliers are under pressure after the iPhone maker faltered on signs of a deteriorating sales outlook. S&P 500 Index futures dipped. The Nasdaq 100 Index dropped for a third day and the Russell 2000 small-cap benchmark erased its gains for the year. Oil fell for a record 12th straight day. The dollar traded at 18-month highs. Japan’s Topix index slumped 3 percent as of 9:23 a.m. in Tokyo. Australia’s S&P/ASX 200 Index dropped 1.7 percent. South Korea’s Kospi index fell 2 percent. Hong Kong Hang Seng Index futures lost 1.1 percent. S&P 500 futures rose 0.1 percent.  

• Five Things You Need to Know to Start Your Day.   

• Trump Car Tariffs, New FOMC Voter, Japan GDP Disasters: Eco Day.

• WTI Slides for 11th Straight Day.  

• Sell-Off Becomes Roughest Since 2011 on Third Leg of Nasdaq Drop.

• Funds Keep Dumping Blocks of GE Shares at an Exceedingly Rapid Pace.  

• Robots Are Coming for Europe’s Jobs.  

• Hedge Funds Turn Short on Nasdaq Futures While ETFs See Outflows.

• Coal Demand Bounced Back in 2017 After Two Years of Decline: IEA.

Wall St. Journal:

• Broward’s Ballots.

• Vatican Bars U.S. Bishops’ Action on Sex Abuse.

• Record Biotech IPO May Be Worth the $7 Billion.

• U.S., China Resume Talks to Cool Trade Tensions.

MarketWatch.com:

• These S&P 500 companies increased quarterly sales the most while expanding margins. 

• One stat reveals the absurdity of San Francisco’s pricey housing market.

Fox News:   

• Dozens of Dems mulling White House campaigns, as wide-open 2020 contest ramps up.

CNBC:        

• There's something behind this market sell-off that no one is talking about: The strong dollar.

• Kellogg exploring sale of Keebler, Famous Amos and fruit snacks business.

• Facebook(FB) shares close at lowest price since April 2017 as tech stocks plunge.

• Mnuchin and top Chinese official are reportedly talking trade ahead of Trump-Xi meeting. 

• Trump to meet with White House trade team to discuss tariffs on European automakers: Report.

• Goldman shares drop the most in 7 years as Malaysia seeks refunds on doomed deal.

• Trump warns OPEC against cutting oil production: 'Prices should be much lower based on supply'.  

• Stocks making the biggest moves after hours: PG&E, Eventbrite and more.

• Tariffs are having a negative impact for only about 9 percent of companies, earnings calls show.

Zero Hedge:

• Here Is How Walmart Plans To Seize Further Control Of Your Community.

• Foreign Investors Reduce Chinese Bond Holdings For The First Time Since Feb 2017: Why This Matters.

• Provisional Ballot Boxes Discovered Inside AVIS Rental Car At Ft. Lauderdale Airport.

• Auto Stocks Slide On Reports US Car-Import Probe Is Advancing.

• The Economic Consequences Of Debt. 

• North Korea Expands "Secret" Missile Bases As Peace Talks Stall.

• Nomura: This Was "Death By Papercuts" Mixed With Hedge Fund Redemption Panic.

• Facebook(FB) Fired Oculus Founder For His Political Beliefs And Pro-Trump Donations.

• Dollar Jumps, Stocks Dump As Crude Carnage Continues.

Telegraph:

• Comment: China’s government talks about reform – while it tightens its grip.

• France calls for EU 'empire' and warns of euro break-up in next crisis.

Night Trading 

• Asian equity indices are -2.0% to -1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 88.50 +2.25 basis points. 

• Asia Pacific Sovereign CDS Index 9.75 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.37 unch.

• FTSE 100 futures -.26%.

• S&P 500 futures -.04%.

• NASDAQ 100 futures -.18%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (AAP)/1.76

• (BZH)/.97

• (HD)/2.27

• (TSN)/1.38

After the Close:

• (CWK)/.18

• (HI)/.67

• (PETQ)/.27

• (TLRY)/-.12

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for October is estimated to rise to 108.0 versus 107.9 in September.
  

2:00 pm EST

• The Monthly Budget Statement for October is estimated at -$100.0B versus -$63.2B in September.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan GDP report, Germany ZEW Index, monthly OPEC oil market report, weekly US retail sales reports, Morgan Stanley Chem/Ag Conference, RBC Midstream Conference, Stifel Healthcare Conference, Morgan Stanley Consumer/Retail Conference, Needham Networking/Communications/Security Conference, Scotiabank Transport/Industrials Conference, (SFLY) analyst meeting, (ZEN) analyst briefing and the (OSTK) analysts day could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on Fed Rate-Hike Fears, Gobal Growth Worries, Earnings Jitters, Tech/Energy Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 19.55 +12.8%

• Euro/Yen Carry Return Index 133.13 -.74%

• Emerging Markets Currency Volatility(VXY) 10.09 +1.0%

• S&P 500 Implied Correlation 41.06 +6.06%

• ISE Sentiment Index 61.0 -15.3%
  

• Total Put/Call 1.10 +.92%

• NYSE Arms 1.61 +50.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.83 +1.43%
  

• America Energy Sector High-Yield CDS Index 591.0 +4.07%

• European Financial Sector CDS Index 90.49 +2.77%

• Italian/German 10Y Yld Spread 304.0 +5.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 9.64 +.83%

• Emerging Market CDS Index 192.77 -.2%
  

• iBoxx Offshore RMB China Corporate High Yield Index 147.71 -.41%

• 2-Year Swap Spread 19.0 -.25 basis point

• TED Spread 27.25 +1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -48.5 -3.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.43 -.43%
• 3-Month T-Bill Yield 2.34% -1.0 basis point

• Yield Curve 25.75 -.5 basis point

• China Iron Ore Spot 70.09 USD/Metric Tonne +.13%

• Citi US Economic Surprise Index 9.90 -.1 point

• Citi Eurozone Economic Surprise Index -56.6 -.8 point

• Citi Emerging Markets Economic Surprise Index -4.40 +1.8 points

• 10-Year TIPS Spread 2.05 unch.
• 76.0% chance of Fed rate hike at Jan. 30th meeting, 91.8% chance at March 20th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -365 open in Japan 
• China A50 Futures: Indicating -87 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio: 

• Slightly Lower: On losses in my medical/biotech/tech/industrial sector longs

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

• Market Exposure: Moved to 25% Net Long