Bear Radar

Style Underperformer:

• Mid-Cap Growth +.3%

Sector Underperformers:

• 1) Computer Hardware -1.8% 2) Homebuilders -.8% 3) Restaurants -.4%

Stocks Falling on Unusual Volume: 

• EFII, LGND, JWN, RVNC and AXGN

Stocks With Unusual Put Option Activity:

• 1) AET 2) PPG 3) STLD 4) LGND 5) IMGN

Stocks With Most Negative News Mentions:

• 1) UBQU 2) LGND 3) SNAP 4) JWN 5) PCG

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.8%

Sector Outperformers:

• 1) Banks +2.8% 2) Gaming +1.7% 3) Airlines +1.6%

Stocks Rising on Unusual Volume:

• FDC, MERC, GS, PETQ, CDLX, MSA, UAL, ECH, LASR, EEMA, CNOB, IOSP, PPBI, SNV, VC, VRTS, BAC, COLB, ATTU, MS, MITK, BLUE, USAK, TDC, TLRY and GTES

Stocks With Unusual Call Option Activity:

• 1) BC 2) FDC 3) USB 4) XLI 5) MS

Stocks With Most Positive News Mentions:

• 1) GS 2) SCHW 3) BAC 4) CMA 5) MET

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +14.6% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 61.5% of Issues Advancing, 36.2% Declining
• 16 New 52-Week Highs, 6 New Lows
• 23.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.8%
• Vix 18.6 -.1%
• Total Put/Call 1.13 +11.9%
• TRIN/Arms 1.1 -.9%

Wednesday Watch

Evening Headlines

Bloomberg:        

• Brexit Pushes Britain to Brink as Government Fights for Survival.

• Why May Is Facing a U.K. Confidence Vote (And How It Works).

• EU Expresses Horror at Brexit Vote, Refuses to Reopen Deal.  

• China Adding Stimulus Emboldens Asia Stock Traders to Hit `Buy'.  

• Bonds That Were Ground Zero for China Debt Worries Now Top Pick.

• Asia Stocks Mixed as Rally Eases; Pound Steadies. The rally that drove Asian equities to a six-week high showed signs of stalling Wednesday, while the pound steadied after U.K. politicians voted down a Brexit deal. Shares in Australia and South Korea were little changed and Japanese equities retreated from their almost 9 percent advance since Christmas. Earlier, the S&P 500 Index climbed the most in a week as risk assets across the globe were spurred in part by signs of more stimulus to come in China. The 10-year Treasury yield held at 2.71 percent, while the dollar was steady against major peers. The yield spread between five-year and 30-year Treasuries steepened Tuesday, touching a level unseen since February amid further comments from Federal Reserve officials stressing patience when it comes to policy changes. Japan’s Topix index slid 0.4 percent as of 9:07 a.m. in Tokyo. Hang Seng futures slid 0.1 percent. Australia’s S&P/ASX 200 Index was little changed. Futures on the S&P 500 added 0.1 percent.    

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

• Fed Hawk Urges Patience, What's Next for Central Banks: Eco Day.  

• Junk Bond Forecasts Are Quickly Going From Good to Great.

Wall St. Journal: 

• U.K. Parliament Roundly Rejects May’s Brexit Plan.

• Big Banks Find Sweet Spot.

• Census Can’t Ask About Citizenship, Judge Rules.

• Accountability for Brexit.

• Think College Is Expensive? Wait Until It’s Free.

• White House Looks to Shake Democrats’ Resolve on Shutdown. 

• Walmart(WMT) Could Leave CVS Caremark Pharmacy Networks Amid Dispute.

• Fed’s Dovish Shift Buoys Markets in 2019’s First Weeks.

Fox News:

• As new US-bound caravan grows to more than 2,000, Mexicans lash out against another wave of migrants.

CNBC:

• Theresa May lost big on her Brexit deal vote — here’s what could happen now

• Stocks making the biggest moves after hours: United Airlines, Snap, Apple & more.

• Netflix’s(NFLX) price bump means Amazon(AMZN), Apple’s(AAPL) stocks are bargains.

• PayPal(PYPL) shares could soon break through the $100 level, says trader.

• Here’s how much members of Congress get paid, even during a government shutdown.

• Cramer Remix: Don’t take your cue on all of retail from Macy’s(M).

• Cramer’s charts suggest lower volatility, higher stock prices in coming months.

Zero Hedge:

• American Psychologists Join Gillette, Warn "Traditional Masculinity Can Hurt Boys".

• 'Senior Trump Official': "I Hope A Long Shutdown Smokes Out The Resistance".

• Race-Baiting CNN Analyst Slams Host For "White Privilege", Then Discovers He's Black.

• A New Tactic To Suppress Online Speech: Taxing Social Media.

• Kirsten Gillibrand Announces Plans To Run For President.

• Ukrainian Hackers Broke Into The SEC's EDGAR Database, Made $4.1 Million From Insider Trades.

• Round Two: Snowmageddon Threatens East Coast This Weekend.

• WTI Dips After Smaller Than Expected Crude Draw.

• Entire 'Market' Rallies On NFLX Price-Hike - Shrugs Off Dimon, May, & Grassley.

Business Insider:

• United Airlines' profit tops Wall Street expectations thanks to a new strategy at its hubs.

Telegraph:

• Comment: We risk talking the UK economy into recession with all those Brexit scare tactics.

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 88.50 -1.5 basis points. 

• China Sovereign CDS 61.5 -2.0 basis points.

• Bloomberg Emerging Markets Currency Index 67.84 -.04%.

• FTSE 100 futures -.26%.

• S&P 500 futures +.09%.

• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (BAC)/.63

• (BLK)/6.40

• (SCHW)/.64

• (CMA)/1.89

• (GS)/4.78

• (PNC)/2.78

• (USB)/1.06

After the Close:

• (AA)/.50

• (CSX)/.99

• (FUL)/.99

• (KMI)/.25

• (PLXS)/.90

Economic Releases

8:30 am EST

• The Import Price Index MoM for Dec. is estimated to fall -1.3% versus a -1.6% decline in Nov.

• The Import Price Index MoM Ex-Petro for Dec. is estimated unch. versus a -,3% decline in Nov.

• The Export Price Index MoM for Dec. is estimated to fall -.7% versus a -.9% decline in Nov.
  

10:00 am EST

• The NAHB Housing Market Index for January is estimated at 56.0 versus 56.0 in Dec.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,392,330 barrels versus a -1,680,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +2,524,560 barrels versus a +8,066,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,504,110 barrels versus a +10,611,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall -.66% versus a -1.1% decline prior.

2:00 pm EST

• US Fed Beige Book release.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Home Price report, UK/Germany CPI reports, weekly MBA Mortgage Applications report, TD Securities Mining Conference and the (UNFI) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are slightly lower, weighed down by financial and consumer shares in the region. I expect US stocks to open mixed and to strengthen into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Rising into Afternoon on China Stimulus Optimism, More Dovish FOMC Commentary, Oil Gain, Tech/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 18.25 -4.3%

• Euro/Yen Carry Return Index 128.50 -.35%

• Emerging Markets Currency Volatility(VXY) 9.38 -.42%

• S&P 500 Implied Correlation 46.02 -2.5%

• ISE Sentiment Index 78.0 +6.85%
  

• Total Put/Call 1.03 unch.

• NYSE Arms 1.19 +52.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.25 -2.1%
  

• America Energy Sector High-Yield CDS Index 739.0 +.50%

• European Financial Sector CDS Index 102.23 -2.24%

• Italian/German 10Y Yld Spread 266.75 +5.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 89.25 -.65%
  

• Emerging Market CDS Index 193.14 -.92%
  

• iBoxx Offshore RMB China Corporate High Yield Index 153.38 +.04%

• 2-Year Swap Spread 16.25 +.25 basis point

• TED Spread 36.75 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -2.75 -4.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.83 -.19%
• 3-Month T-Bill Yield 2.43% +2.0 basis points

• Yield Curve 18.0 +.75 basis point

• China Iron Ore Spot 71.42 USD/Metric Tonne +.15%

• Citi US Economic Surprise Index -7.80 -2.3 points

• Citi Eurozone Economic Surprise Index -85.7 +1.0 point

• Citi Emerging Markets Economic Surprise Index -18.7 +1.0 point

• 10-Year TIPS Spread 1.80-2.0 basis point
• 2.8% chance of Fed rate hike at March 20th meeting, 8.7% chance at May 1st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -55 open in Japan 
• China A50 Futures: Indicating +10 open in China

• DAX Futures: Indicating +3 open in Germany

Portfolio: 

• Higher: On gains in my biotech/tech/medical/retail sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long