Broad Market Tone: - Advance/Decline Line: Substantially Higher
- Sector Performance: Almost Every Sector Rising
- Volume: Around Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst: - VIX 34.15 -7.48%
- ISE Sentiment Index 103.0 -24.26%
- Total Put/Call 1.06 -10.92%
- NYSE Arms .34 -61.65%
Credit Investor Angst:- North American Investment Grade CDS Index 130.19 -3.33%
- European Financial Sector CDS Index 270.59 -3.63%
- Western Europe Sovereign Debt CDS Index 341.83 -2.93%
- Emerging Market CDS Index 309.50 +.67%
- 2-Year Swap Spread 34.0 +1 bp
- TED Spread 35.0 +1 bp
Economic Gauges:- 3-Month T-Bill Yield .00% unch.
- Yield Curve 183.0 +5 bps
- China Import Iron Ore Spot $179.0/Metric Tonne -.22%
- Citi US Economic Surprise Index -39.40 -.9 point
- 10-Year TIPS Spread 1.93% -2 bps
Overseas Futures: - Nikkei Futures: Indicating +135 open in Japan
- DAX Futures: Indicating +90 open in Germany
Portfolio:
- Higher: On gains in my Tech, Biotech, Medical and Retail sector longs
- Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my(EEM) short, then added some back
- Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is bullish, as the S&P 500 surges meaningfully higher to session highs, despite Eurozone debt angst, US tax hike concerns, some disappointing economic data, emerging markets inflation fears and global growth worries. On the positive side, Software, Computer, Semi, Disk Drive, Networking, Computer Service, Bank, Education, Road & Rail and Airline shares are especially strong, rising more than +3.0%. Small-Cap and Cyclical shares are outperforming. Tech stocks have traded very well throughout the day. Oil is declining -1.06%, gold is falling -1.05% and the UBS-Bloomberg Ag Spot Index is down -1.2%. The Spain sovereign cds is falling -5.91% to 375.33 bps, the France sovereign cds is declining -5.98% to 181.0 bps, the Italy sovereign cds is falling -6.09% to 473.50 bps, the Portugal sovereign cds is declining -5.96% to 1,138.18 bps, the Ireland sovereign cds is falling -6.41% to 831.67 bps and the Belgium sovereign cds is falling -4.98% to 277.67 bps. On the negative side, Telecom and REIT shares are underperforming, rising less than +1.25%.
Lumber is down -.27% and Copper is falling -1.5%. Rice is still very near its multi-year high, rising +35.0% in about 10 weeks. The average US price for a gallon of gas is -.01/gallon today to $3.63/gallon. It is up .49/gallon in about 7 months. The Greece sovereign cds is soaring +24.3% to 5,034.45 bps, the Russia sovereign cds is gaining +1.83% to 227.0 bps, the Israel sovereign cds is gaining +1.4% to 188.60 bps and the Brazil sovereign cds is gaining +2.64% to 175.0 bps. The Greece sovereign cds is hitting an all-time high again today. The Germany sovereign cds is still near its record high. The Eurozone Financial Sector CDS Index and the Western Europe Sovereign CDS Index are still near all-time highs. The The UBS-Bloomberg Ag Spot Index is still near its recent record high, which is also a large negative. Korean shares plunged -3.52% overnight to the low end of their recent range and are now down -14.7% ytd. Most gauges of eurozone debt angst remain very elevated and continue to trend higher, despite today's pullbacks. Today's volume was better, but still not good. Europe is attempting to kick the can down the road again, which could lead to more short-covering/bargain-hunting in the near-term. However, the situation is still very problematic as Europe's "solutions" will only further dampen economic activity and worsen budgets over the longer-term. I expect US stocks to trade modestly higher into the close from current levels on declining eurozone debt angst, short-covering, bargain-hunting, technical buying and falling energy/food prices.
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