Bull Radar

Style Outperformer:

• Mid-Cap Value -.20%

Sector Outperformers:

• 1) Coal +2.69% 2) Steel +1.90% 3) Education +.90%
  

Stocks Rising on Unusual Volume:

• MPC, KMX, NFLX, QLIK and QCOR

Stocks With Unusual Call Option Activity:

• 1) MPC 2) SWY 3) QLIK 4) MDRX 5) CNX
  

Stocks With Most Positive News Mentions:

• 1) SAI 2) STZ 3) NFLX 4) AXP 5) ZNGA

Charts:

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

Monday Watch

Weekend Headlines
Bloomberg: 

• Europe Seeks to Contain Spanish Troubles as Finance Chiefs Meet. European officials will move to prevent Spain from dragging the single currency into a new round of convulsions this week as a series of high-level meetings aim to ease the three-year-old European debt crisis. European finance ministers meet in Luxembourg today to discuss Spain’s overhaul effort and closer banking cooperation, while on Oct. 10, Spanish Prime Minister Mariano Rajoy travels for talks with French President Francois Hollande in Paris. Germany’s Chancellor Angela Merkel tomorrow makes her first visit to Greece since the crisis began in 2009. “It feels as if we are in for a month or so of Spanish trouble,” Erik Nielsen, London-based chief global economist at UniCredit SpA (UCG), wrote in a note yesterday. Nielsen cited the risk that Spain will wait too long to request financial assistance and that a rescue package will be badly designed.
• Merkel Arrival in Athens to Be Met by Anti-Austerity Protesters. Greek protesters are gearing up for German Chancellor Angela Merkel’s first visit to Athens since the financial crisis began with plans for strikes, rallies and a petition demanding reparations from the Nazi occupation. Greece’s need for bailouts and the German-led conditions attached to the emergency loans have made Merkel the face of austerity to Greeks. She has been depicted in the media wearing jackboots and an SS uniform. While Greek Prime Minister Antonis Samaras called her visit tomorrow a “very positive development,” opposition leaders intend a show of anger and frustration after five years of recession.
• Cameron Says U.K. Rich Will Pay More Tax Without Mansion Levy. U.K. Prime Minister David Cameron said his government will announce additional measures to increase taxes on the rich, while ruling out a so-called mansion tax wanted by his Liberal Democrat coalition partners. He said people who save and buy large houses shouldn’t be hit “every year with a massive great tax. That’s not going to happen.”
• Huawei, ZTE Provide Opening for China Spying, Report Says. Huawei Technologies Co. and ZTE Corp. (000063), China’s two largest phone-equipment makers, provide opportunities for Chinese intelligence services to tamper with U.S. telecommunications networks for spying, according to a congressional report to be released today. The House intelligence committee report says the two companies failed to cooperate with a yearlong investigation and to adequately explain their U.S. business interests and relationship with the Chinese government, according to a draft provided by the panel. “Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems,” says the report, from the committee’s chairman, Michigan Republican Mike Rogers, and its top Democrat, Maryland Representative C.A. “Dutch” Ruppersberger. 
• Chavez Declared Winner Over Capriles in Venezuelan Election. Venezuelan President Hugo Chavez was declared the winner in his closest election fight since taking office 14 years ago, overcoming cancer surgeries to extend his self-declared socialist revolution by six more years. With 90 percent of the votes counted, the 58-year-old former paratrooper received 54 percent of the votes cast, the national electoral council said tonight. Henrique Capriles Radonski, the former governor of Miranda state, won 45 percent, the council said. Pre-election polls showed the race tightening, with some showing Capriles ahead.   
• China Home Prices Rise a 4th Month as Sales Rebound, SouFun Says. China’s new home prices rose for a fourth month as a rebound in property sales eased developers’ funding woes, according to SouFun Holdings Ltd. (SFUN) Prices in September climbed 0.17 percent from August to 8,753 yuan ($1,393) per square meter (10.76 square feet), the country’s biggest real estate website owner said in an e-mailed statement today, based on its survey of 100 cities. The city of Kunshan in the eastern Jiangsu province had the biggest gain, with prices rising 2 percent. 
• Sun Hung Kai Says H.K. Builders Face China-Led Cost Pressure. Hong Kong builders face increases of more than 10 percent a year in construction costs because of competition for workers and materials from projects in China, according to Sun Hung Kai (16) Properties Ltd., the world’s biggest developer by value. “We’re seeing double-digit increases every year and we’ll be seeing this for quite some time,” Victor Lui, deputy managing director at Hong Kong-based Sun Hung Kai, said in an interview. “There’re a lot of projects going on in mainland China and we are competing with them for everything: materials, workers, even architects, designers and surveyors.”
• Australian Banks Seeing ‘Relentless’ Increase in Costs, ANZ Says. Australian banks are seeing a “relentless” increase in costs even as they shift their reliance to deposits from wholesale funding, Australia and New Zealand Banking Group Ltd. Chief Executive Officer Phil Chronican said. The cost of funding has “gone up and up, although it has stabilized this year,” Chronican said in an interview on the Inside Business program on the Australian Broadcasting Corp. “We’re refinancing this year borrowings that were made three, four and five years ago at materially lower costs.”
• Japan’s China Row May Spur GDP Fall This Quarter, JPMorgan Says. Japan’s territorial spat with China may cause the Japanese economy to contract this quarter and hasten a current account slide as exports decline and Chinese tourism to Japan drops off, according to a JPMorgan report. The dispute will knock 0.8 percentage point off Japan’s gross domestic product in the October-December period, JPMorgan Securities Japan Co. economists Masaaki Kanno and Masamichi Adachi wrote in an e-mailed note yesterday. They now estimate fourth-quarter GDP will contract 0.8 percent from the previous quarter, compared with a previous estimate of no growth.
• World Bank Sees East Asia Growth Sliding to 11-Year Low on China. The World Bank said policy makers in Asia’s emerging economies have room to ease monetary and fiscal policies as China’s slowdown drags the region’s growth to an estimated 11-year low this year. Growth in developing East Asia, which excludes Japan and India, will probably ease to 7.2 percent from 8.3 percent in 2011, the Washington-based lender said in a report today. That is the slowest pace since 2001, according to World Bank data, and lower than a forecast in May of 7.6 percent. The International Monetary Fund is set to revise down its global outlook for this year tomorrow at an annual meeting in Tokyo where officials will tackle a slowdown triggered by Europe’s sovereign-debt crisis.  
• A 'Flash Crash' Hits India, Markets Wary of Repeat. (video)
• Copper Rally Is Overdone, Set to Move Lower, INTL FCStone sees copper falling to around $8,050/t in next four weeks. Steel, iron ore are also "vulnerable" as steelmills are not cutting back enough output, keeping the market oversupplied, the co. said.
• Former SEC Watchdog Kotz Violated Ethics Rules, Review Finds. The former internal watchdog for the U.S. Securities and Exchange Commission violated ethics rules by overseeing investigations that touched on people with whom he had “personal relationships,” an outside review found. H. David Kotz, who resigned as the agency’s inspector general in January amid questions about his tactics and conduct, shouldn’t have participated in a probe of the SEC’s office re- organization because he engaged in “extensive” and “flirtatious” communications with an employee associated with the project, according to the review. 
• Foxconn Labor Disputes Disrupt IPhone Output for 2nd Time. Foxconn Technology Group, the assembler of Apple Inc.(AAPL) iPhones, had to stop production for the second time in as many weeks after factory-line workers at one of its plants protested against increased pressure.

Wall Street Journal:

• Depositors Turn Up Heat on Ailing Spanish Banks.
• 'Trickle-Down Government' and Internet Freedom. While tyrants make a run at global Internet censorship, the Obama administration stands by passively.

Business Insider:

• And Now... Here's The REAL Reason The Unemployment Rate Has Fallen So Much This Year.  
• Fox News Host Asks Jack Welch About 2 Obama Donors Working At The Bureau Of Labor Statistics.
• The Dismal Truth About Spain's Desperate Economic Situation.
• The Unemployment Rate Drop Does Not Change My Recession Outlook.  
• Here's Goldman's Worst-Possible, Black-Sky Scenario For The Fiscal Cliff. 
• Oh Boy: The New Der Spiegel Cover Warns About Inflation.
• If You're Bullish On China, You Must Be Able To Answer These Three Questions.  
• Polls Are Collapsing For Obama All Over The Place After The Debate.

Zero Hedge:

• Consumer Credit Soars As Uncle Sam Resumes Handing Out Billions In Student Loans With Reckless Abandon. 
• On This Day In History, Gas Prices Have Never Been Higher (Again). (graph) 
• US Foodstamp Usage Rises To New Record High. (graph) 
• Fed Balance Sheet Composition Update. (graphs) 
• Turkish-Syrian Artillery Exchanges Resume On Sunday. 
• Gallup Goes To Town On BLS Massagery. 
• Paris Luxury Apartment Prices Slide As French "1%"ers Dump Real Estate To Avoid Soaring Taxes.

CNBC: 

• Europe’s Richer Regions Want Out. Catalonia may be the catalyst for a renewed wave of separatism in the European Union, with Scotland and Flanders not far behind. The great paradox of the European Union, which is built on the concept of shared sovereignty, is that it lowers the stakes for regions to push for independence. While a post-national European Union may be emerging out of the euro zone crisis, with a drive for more fiscal union and more centralized control over national budgets and banks, the crisis has accelerated calls for independence from member countries’ richer regions, angry at having to finance poorer neighbors. 
• Deadly Meningitis Outbreak Increases to 91 Cases. U.S. health officials on Sunday reported an additional 27 cases in a fungal meningitis outbreak linked to steroid injections that has killed seven people and now affected 91 in nine states.

New York Times:

• Citing U.S. Fears, Arab Allies Limit Syrian Rebel Aid. For months, Saudi Arabia and Qatar have been funneling money and small arms to Syria’s rebels but have refused to provide heavier weapons, like shoulder-fired missiles, that could allow opposition fighters to bring down government aircraft, take out armored vehicles and turn the war’s tide. While they have publicly called for arming the rebels, they have held back, officials in both countries said, in part because they have been discouraged by the United States, which fears the heavier weapons could end up in the hands of terrorists. As a result, the rebels have just enough weapons to maintain a stalemate, the war grinds on and more jihadist militants join the fray every month. 

TechCrunch.com: 

• Google(GOOG) Launching AdWords Business Credit Card To Boost SMB Search Ad Spend, Starting First In UK, Extending To U.S.

Financial Times:

• EU braced for budget fight with UK. Brussels is bracing itself for a battle with David Cameron as fears grow that the British prime minister will block a proposed €1tn seven-year spending plan and push for a two-tier EU budget. Mr Cameron is understood to be interested in Brussel’s longer-term plan of a separate spending programme for the eurozone, with UK and European officials considering a compromise that would see the EU budget split in two – marking a further acceleration towards a divided Europe.

Telegraph: 

• IMF to cut growth forecast for UK in gloomy global outlook. The International Monetary Fund is expected to cut its growth forecast for the UK next week, when it downgrades the outlook for the global economy.
• ECB board member shuts door on Greek pleas for leniency. Greece cannot have more time to repay its debt to the European Central Bank because it would be illegal and "illogical", board member Joerg Asmussen has said, as he shut the door on pleas for leniency from the bank.
• Spain's jobless flee to Argentina. Desperate Spaniards are fleeing in their thousands to set up new lives in Argentina, preferring rampant inflation to the prospect of searching for a job in a country with the highest unemployment rate in the industrialised world.

Weslt am Sonntag:

• Greece may miss its target of reducing debt to 120% of GDP in next eight years, citing people familiar with Greek talks. Greece faces debt of 140% of GDP in 2020. The German government has ruled out a third rescue package or cancellation of its share of debt.
• Greece is sure to exit the euro, Ifo Institute for Economic Research President Hans-Werner Sinn said. Economic problems to arise if Greece remains in the euro are "simply not solvable," citing Sinn. A temporary Greek exit is "better for the Greeks and better for us," he said.

El Pais:

• Spain to Lend EU560m to Catalonia for Past Due Bills. Spain to make payment to region on Tuesday, citing people in the Budget Ministry. Cash will be used by Catalonia to pay down liabilities including EU387m of bills past due dates to hospitals, schools.
• Canary Islands Request EU757m From Spain Rescue Fund. Region will use loan to repay debt, citing Javier Gonzalez, head of the Canary Islands finance office.

La Figaro:

• The French government is looking into ways to get companies such as Google Inc.(GOOG), Microsoft(MSFT) and Apple Inc.(AAPL) to pay more taxes in France on revenue they make in the country.

Nikkei:

• Japanese Automakers to Cut Chinese Production. Japan's three largest automakers plan to cut production to half of normal levels as workers return from holidays this week. Steps will mean 30,000-40.000 fewer vehicles from each maker over a month. Cuts expand on reductions made before last week's holiday. Automakers to monitor anti-Japan protests in China.
• Asahi Glass Halts Solar Output at Tennessee Plan. Inventory build up of glass for solar cells leads co. to halt production, lay off half of 120 employees. Inventory at the Tennessee plant is about 4-5 months and co. wants inventory at 2 months.

Yonhap News Agency: 

• N. Korea's trade with China nearly tripled over past 5 years. North Korea's trade with China nearly tripled over the past five years, South Korean government data showed Sunday, underscoring the isolated North's growing economic reliance on its major ally. Trade between North Korea and China stood at US$5.63 billion last year, up 284 percent from $1.98 billion in 2007, Seoul's unification ministry said in a report to the National Assembly.
  

Vietnam News:

• Vietnam Property Projects Delayed by Finance Problems. 900 of 1,108 property projects in Ho Chi Minh City unfinished due to financial problems, citing city's construction dept. figures.

Jerusleum Post: 

• Analysis: Iran, Hezbollah likely behind UAV trespass. Of all the hostile elements seeking to harm Israeli national security, only two have the capability, track record and motivation to send drones into Israeli airspace: Iran and its Shi’ite proxy Hezbollah.

Haaretz:

• Iran denies offering West 'nine-step plan' to end nuclear standoff. Iran denied on Saturday a U.S. media report that said it had offered a "nine-step plan" aimed at solving its stand-off with the West over its disputed nuclear program.

Weekend Recommendations

Barron's:

• Made positive comments on (BCO), (VIAB) and (JCI).
• Made negative comments on (SHF).

Night Trading

• Asian indices are -1.0% to -.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 129.50 unch.
• Asia Pacific Sovereign CDS Index 109.25 -.75 basis point.
• FTSE-100 futures -.50%.
• S&P 500 futures -.21%.
• NASDAQ 100 futures -.22%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases

•  None of note
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The EU Finance Ministers meeting, activation of Europe's ESM, Troika report on Greece, Germany trade balance and the China HSBC Services PMI could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the week.

Weekly Outlook

U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, Eurozone debt angst, US "fiscal cliff" concerns, Mid-east unrest, rising US election uncertainty, high food/energy prices, more shorting and earnings worries. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Market Week in Review

S&P 500 1,460.93 +1.41%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,460.93 +1.41%
• DJIA 13,610.15 +1.29%
• NASDAQ 3,136.18 +.64%
• Russell 2000 842.86 +.65%
• Value Line Geometric(broad market) 363.63 +1.13%
• Russell 1000 Growth 678.13 +1.17%
• Russell 1000 Value 722.46 +1.63%
• Morgan Stanley Consumer 852.48 +1.99%
• Morgan Stanley Cyclical 990.66 +2.27%
• Morgan Stanley Technology 684.66 +.03%
• Transports 5,046.43 +3.14%
• Utilities 479.93 +.88%
• Bloomberg European Bank/Financial Services 84.46 +3.66%
• MSCI Emerging Markets 41.74 +.50%
• Lyxor L/S Equity Long Bias 1,056.31 +.11%
• Lyxor L/S Equity Variable Bias 804.13 +.10%
• Lyxor L/S Equity Short Bias 539.66 unch.

Sentiment/Internals

• NYSE Cumulative A/D Line 159,405 +1.93%
• Bloomberg New Highs-Lows Index 287.0 +140
• Bloomberg Crude Oil % Bulls 34.2 -9.5%
• CFTC Oil Net Speculative Position 215,880 -6.67%
• CFTC Oil Total Open Interest 1,556,877 +.07%
• Total Put/Call .91 -8.08%
• OEX Put/Call 1.36 +67.90%
• ISE Sentiment 86.0 -12.0%
• NYSE Arms 1.23 -26.63%
• Volatility(VIX) 14.33 -8.90%
• S&P 500 Implied Correlation 45.42 -6.98%
• G7 Currency Volatility (VXY) 7.60 -3.31%
• Smart Money Flow Index 11,670.95 +.22%
• Money Mkt Mutual Fund Assets $2.564 Trillion -.50%
• AAII % Bulls 33.86 -6.2%
• AAII % Bears 33.23 -8.86%

Futures Spot Prices

• CRB Index 307.62 -.54%
• Crude Oil 89.88 -2.41%
• Reformulated Gasoline 295.25 +1.30%
• Natural Gas 3.40 +2.38%
• Heating Oil 315.59 +.25%
• Gold 1,780.80 +.41%
• Bloomberg Base Metals Index 219.42 +.04%
• Copper 377.80 +.65%
• US No. 1 Heavy Melt Scrap Steel 347.67 USD/Ton -3.78%
• China Iron Ore Spot 104.20 USD/Ton unch.
• Lumber 276.10 -1.57%
• UBS-Bloomberg Agriculture 1,681.22 -.93%

Economy

• ECRI Weekly Leading Economic Index Growth Rate +4.7% +90 basis points
• Philly Fed ADS Real-Time Business Conditions Index -.4282 +6.36%
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 111.98 -.01%
• Citi US Economic Surprise Index 43.5 +37.7 points
• Fed Fund Futures imply 58.0% chance of no change, 42.0% chance of 25 basis point cut on 10/24
• US Dollar Index 79.34 -.69%
• Yield Curve 148.0 +8 basis points
• 10-Year US Treasury Yield 1.74% +11 basis points
• Federal Reserve's Balance Sheet $2.791 Trillion +.14%
• U.S. Sovereign Debt Credit Default Swap 49.34 +30.57%
• Illinois Municipal Debt Credit Default Swap 197.0 -4.09%
• Western Europe Sovereign Debt Credit Default Swap Index 140.42 -5.04%
  
• Emerging Markets Sovereign Debt CDS Index 199.85 -7.23%
  
• Saudi Sovereign Debt Credit Default Swap 86.93 -4.49%
• Iraq Sovereign Debt Credit Default Swap 483.28 +4.15%
• China Blended Corporate Spread Index 405.0 -10 basis points
• 10-Year TIPS Spread 2.57% +15 basis points
• TED Spread 25.5 -1.25 basis points
• 2-Year Swap Spread 14.0 +.75 basis point
• 3-Month EUR/USD Cross-Currency Basis Swap -22.0 +4.25 basis points
• N. America Investment Grade Credit Default Swap Index 93.96 -6.1%
  
• European Financial Sector Credit Default Swap Index 178.63 -12.23%
  
• Emerging Markets Credit Default Swap Index 214.38 -3.98%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 97.0 unch.
• M1 Money Supply $2.360 Trillion -.47%
• Commercial Paper Outstanding 975.10 -1.50%
• 4-Week Moving Average of Jobless Claims 375,00 +1,000
• Continuing Claims Unemployment Rate 2.6% unch.
• Average 30-Year Mortgage Rate 3.36% -4 basis points
• Weekly Mortgage Applications 1,020.40 +16.6%
• Bloomberg Consumer Comfort -36.9 +2.8 points
• Weekly Retail Sales +2.40% unch.
• Nationwide Gas $3.79/gallon unch.
• U.S. Heating Demand Next 7 Days 41.0% above normal
• Baltic Dry Index 845.0 +10.3%
• China (Export) Containerized Freight Index 1,214.62 -1.01%
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 unch.
• Rail Freight Carloads 257,225 +2.79%

Best Performing Style

• Large-Cap Value +1.63%

Worst Performing Style

• Large-Cap Growth +.29%

Leading Sectors

• Homebuilders +5.9%
• Airlines +5.1%
• Banks +3.6%
• Road & Rail +3.2%
• Biotech +3.2%

Lagging Sectors

• Oil Service -1.4%
• Networking -1.6%
• Alternative Energy -1.7%
• Restaurants -2.0%
• Computer Hardware -3.9%

Weekly High-Volume Stock Gainers (18)

• SRPT, CRDN, OCN, NC, MDRX, CHUY, MFRM, GNRC, SPSC, GWAY, MUR, TBBK, DFRG, WLP, PCS, AZZ, EBSB and TSRO

Weekly High-Volume Stock Losers (13)

• UBA, AIMC, RPM, LXK, ADTN, HPQ, GMAN, HMSY, FNP, EXPR, MSCI, INFA and NUVA

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers

*5-Day Change

Stocks Reversing Lower into Final Hour on Rising Global Growth Fears, Mid-East Unrest, Tech/Commodity Sector Weakness, Technical Selling

Today's Market Take:
 
Broad Market Tone:

• Advance/Decline Line: Lower
• Sector Performance: Mixed
• Volume: Below Average
• Market Leading Stocks: Underperforming

Equity Investor Angst:

• VIX 14.22 -2.13%
• ISE Sentiment Index 82.0 -37.4%
• Total Put/Call .90 +12.5%
• NYSE Arms 1.42 +116.35%

Credit Investor Angst:

• North American Investment Grade CDS Index 94.86 bps -.23%
• European Financial Sector CDS Index 178.79 bps -3.76%
• Western Europe Sovereign Debt CDS Index 137.77 bps -4.13%
• Emerging Market CDS Index 214.09 bps -1.53%
• 2-Year Swap Spread 14.0 +.75 basis point
• TED Spread 25.5 unch.
• 3-Month EUR/USD Cross-Currency Basis Swap -22.25 +.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .10% unch.
• Yield Curve 147.0 +5 basis points
• China Import Iron Ore Spot $104.20/Metric Tonne unch.
• Citi US Economic Surprise Index 43.50 +25.8 points
• 10-Year TIPS Spread 2.57 +2 basis points

Overseas Futures:

• Nikkei Futures: Indicating +29 open in Japan
• DAX Futures: Indicating -40 open in Germany

Portfolio:

• Slightly Higher: On gains in my Biotech/Retail sector longs and index hedges
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
• Market Exposure: Moved to 25% Net Long