Bull Radar

Style Outperformer:

• Large-Cap Growth +1.5%

Sector Outperformers:

• 1) Steel +6.0% 2) Tobacco +4.0% 3) Disk Drives +2.5%

Stocks Rising on Unusual Volume:

• MRCY, MLNX, SIMO, CLF, CONN, GLOP, VALE, PLOW, SYK, SLGN, EVR, BA, ALGN, IGV, SSB, ANTM, TSS, IBN, HOG, AMD, RCL, OSIS, OSK, IR, DRQ, RHI, PVTL, ALLY and MKSI

Stocks With Unusual Call Option Activity:

• 1) VIAB 2) CHRW 3) ON 4) HOG 5) XME

Stocks With Most Positive News Mentions:

• 1) SYK 2) AMD 3) RCL 4) BA 5) AAPL

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +7.2% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 56.1% of Issues Advancing, 40.7% Declining
• 40 New 52-Week Highs, 10 New Lows
• 31.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.1%
• Vix 19.3 +.9%
• Total Put/Call 1.01 +14.8%
• TRIN/Arms 1.04 +11.8%

Wednesday Watch

Evening Headlines

Bloomberg:   

• May Wins Backing to Reopen Brexit Deal as EU Prepares to Dig In.

• U.S. and China Are Talking Some More, But Deal Prospects Are Still Slim.    

• China's Economic Woes Have Further to Spread Across Asia.

• Venezuela Resolution Held Up Over Concerns About Military Action.

• Maduro Fights Back With Targeted Killings and Media Blackout.

• Asian Stocks Set for Mixed Start; Pound Declines. Asian stocks looked set for a mixed start Wednesday as earnings season rolled on and investors awaited the Federal Reserve’s policy meeting. The pound remained lower after lawmakers voted to renegotiate the Brexit withdrawal agreement with Brussels. Australian equities rose and futures in Japan and China signaled a flat start, while contracts for shares in Hong Kong edged higher. The S&P 500 Index was primed to recover from its slight decline on Tuesday, with American equity futures advancing as Apple Inc. gave a forecast that showed stability after a tough end to last year. Crude held on to its advance as the U.S. put a de facto ban on Venezuelan oil. Treasuries edged higher with the dollar Tuesday. Futures on the S&P 500 Index advanced 0.3 percent and Nasdaq futures climbed 0.8 percent. The S&P 500 on Tuesday fell 0.2 percent. Futures on Japan’s Nikkei 225 were little changed in Singapore. Hang Seng Index futures rose 0.1 percent earlier. Australia’s S&P/ASX 200 Index advanced 0.4 percent.   

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

• Bitter Cold in U.S. Midwest Could Bring Near-Record Power Use.

• It’s Almost Too Cold in Chicago to Get a Pizza Delivered.

• Last Month’s Stock Rout Leads to More Forgiving Investors This Earnings Season.

Wall St. Journal: 

• As Border Tightens, Migrants Turn to Remote Part of Desert.

• Abrams to Give Response to Trump’s State of the Union.

• Chinese Exit U.S. Commercial Real Estate as Beijing Directs Money Home.

• May Seeks to Renegotiate Brexit Deal With European Union.

• PG&E Files for Bankruptcy, Setting Up Complex Restructuring Case.

• Vale to Close 10 Dams in Wake of Brazil Mining Disaster.

MarketWatch.com:

• Bitcoin dips below $3,400, on track for 5th straight losing session.

Fox News:

• Dem White House hopeful’s ‘Medicare-for-All’ pitch sees little poll support in practice.

• EXCLUSIVE: Dems on key House panel to strike 'God' from oath, draft shows.

CNBC:

• Apple CEO Tim Cook on US-China trade negotiations: ‘There is a bit more optimism in the air’.

• Apple(AAPL) shares jump after barely beating on earnings, and iPhone sales drop 15% from last year.

• Apple(AAPL) reports 62.8 percent margin in services business as it discloses unit’s profit for first time.

• Stocks making the biggest moves after hours: Apple, Amgen, AMD and more.

• Crime still plagues cryptocurrencies, as $1.7 billion was stolen from investors last year.

Zero Hedge:

• Indiana Bill Requires Students To Pass Citizenship Exam To Graduate High School.

• WTF Is Trump Thinking - A Plum Post For A Prominent Opponent?

• WTI Extends Gains After Smaller Than Expected Crude Build.

• 3rd DC Antifa Arrested, Charged With Multiple Felonies In "Ethnic Intimidation" Attack On Latino Marines.

• Cali Board Of Trustees Scraps 'Pledge Of Allegiance' Over "White Nationalism" History.

• Bankrupt PG&E Seeks To Pay $130 Million In 2018 Bonuses.

• In Major Win For May, MPs Approve Amendment To Eliminate Irish Backstop.

• Golden Crosses, Tech Wrecks, & Confidence Crumbles.

Business Insider:

• AMD(AMD) posts mixed results and guides lower, but beaten down shares spike.

• The polar vortex striking the US will cause temperatures to plummet up to 40 degrees colder than normal.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 84.75 -.75 basis point. 

• China Sovereign CDS 58.25 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 68.16 -.04%.

• FTSE 100 futures +.37%.

• S&P 500 futures -.04%.

• NASDAQ 100 futures +.36%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (BABA)/11.51

• (ANTM)/2.20

• (T)/.84

• (ADP)/1.18

• (BA)/4.55

• (GD)/2.99

• (HES)/-.38

• (IR)/1.29

• (MCD)/1.89

• (OSK)/.96

• (RCL)/1.52

• (SMG)/-1.24

After the Close:

• (CRUS)/.78

• (FB)/2.17

• (MSFT)/1.09

• (MDLZ)/.63

• (PYPL)/.67

• (QCOM)/1.09

• (TSLA)/2.01

• (X)/1.83

• (V)/1.25

• (WYNN)/1.35

Economic Releases

8:30 am EST

• The ADP Employment Change for Jan. is estimated to fall to 183K versus 271K in Dec.
  

10:00 am EST

• Pending Home Sales MoM for Dec. is estimated to rise +.5% versus a -.7% decline in Jan.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,702,710 barrels versus a +7,970,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +2,631,860 barrels versus a +4,050,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,580,290 barrels versus a -617,000 barrel decline the prior week. 
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds rate at 2.25-2.5%.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Vice Premier's visit for trade talks, FOMC press conference, Australia inflation data, weekly MBA Mortgage Applications report and the Eurozone Industrial Production report could also impact trading today.

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

Stocks Lower into Final Hour on China Trade Deal Worries, Earnings Jitters, Technical Selling, Tech/Retail Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 19.14 +1.43%

• Euro/Yen Carry Return Index 129.92 +.08%

• Emerging Markets Currency Volatility(VXY) 9.0 -.66%

• S&P 500 Implied Correlation 46.57 -1.59%

• ISE Sentiment Index 88.0 +14.3%
  

• Total Put/Call .85 -17.5%

• NYSE Arms .96 -19.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.96 +.06%
  

• America Energy Sector High-Yield CDS Index 705.0 +.56%

• European Financial Sector CDS Index 89.82 -1.96%

• Italian/German 10Y Yld Spread 243.25 -2.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 84.63 +.50%
  

• Emerging Market CDS Index 180.99 +.64%
  

• iBoxx Offshore RMB China Corporate High Yield Index 155.62 +.18%

• 2-Year Swap Spread 13.50 unch.

• TED Spread 36.25 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -4.75 -1.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 68.18 +.20%

• 3-Month T-Bill Yield 2.41% +3.0 basis points

• Yield Curve 14.25 -1.0 basis point

• China Iron Ore Spot 82.80 USD/Metric Tonne +5.28%

• Citi US Economic Surprise Index .2 -.8 point

• Citi Eurozone Economic Surprise Index -81.5 +.3 point

• Citi Emerging Markets Economic Surprise Index -11.6 +.1 point

• 10-Year TIPS Spread 1.77 unch.

• 1.0% chance of Fed rate hike at March 20th meeting, 5.0% chance at May 1st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -19 open in Japan 

• China A50 Futures: Indicating -47 open in China

• DAX Futures: Indicating -2 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 75% Net Long