Bull Radar

Style Outperformer:

• Mid-Cap Growth -2.01%

Sector Outperformers:

• 1) Hospitals +.95% 2) REITs -.53% 3) Gold & Silver -.71%
  

Stocks Rising on Unusual Volume:

• VHS, HCA, BBY, THC, CYH, HMSY, SWHC, RGR, UHS, CDE, CNC, GGC, CIEN and TNGO

Stocks With Unusual Call Option Activity:

• 1) FITB 2) GRPN 3) SWHC 4) SLM 5) CLR
  

Stocks With Most Positive News Mentions:

• 1) T 2) HRS 3) S 4) TWX 5) BAC

Charts:

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

Wednesday Watch

Night Trading

• Asian equity indices are -.25% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 113.0 -4.0 basis points.
• Asia Pacific Sovereign CDS Index 87.0 -2.5 basis points.
• FTSE-100 futures +.19%.
• S&P 500 futures -.61%.
• NASDAQ 100 futures -.42%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BDX)/1.40
• (WLP)/1.83
• (TWX)/.82
• (DVN)/.69
• (M)/.29
• (THC)/.36
• (QCOM)/.82
• (WFM)/.60
• (MNST)/.55
• (PRU)/1.67 

Economic Releases
10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,000,000 barrels versus a -2,045,000 barrel decline the prior week. Distillate supplies are estimated to fall by -1,250,000 barrels versus a -93,000 barrel decline the prior week. Gasoline inventories are estimated to fall by -1,500,000 barrels versus a +935,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -1.5% versus a +.5% gain the prior week.

3:00 pm EST

• Consumer Credit for September is estimated to fall to $10.175B versus $18.123B in August.

Upcoming Splits

• (HMST) 2-for-1
  

Other Potential Market Movers

• The US election results, Eurozone retail sales data, EC report on Spanish budget, Troika report on Greece, EU forecast for Europe, EU assessment of Spanish budget, 10Y T-Note auction, weekly MBA mortgage applications report and the Wells Fargo Tech/Media/Telecom Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and consumer staple shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Rising into Final Hour on US Election Optimism, Less Eurozone Debt Angst,Short-Covering, Tech/Commodity/Financial Sector Strength

 Broad Market Tone:

• Advance/Decline Line: Higher
  
• Sector Performance: Almost Every Sector Rising
• Volume: Slightly Below Average
• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 17.30 -6.08%
• ISE Sentiment Index 153.0 +35.3%
• Total Put/Call .94 +16.05%
• NYSE Arms .54 -40.39%

Credit Investor Angst:

• North American Investment Grade CDS Index 96.34 bps -.62%
• European Financial Sector CDS Index 168.59 bps -3.09%
• Western Europe Sovereign Debt CDS Index 111.21 bps -.12%
• Emerging Market CDS Index 229.85 bps -2.49%
• 2-Year Swap Spread 11.0 +1.5 basis points
• TED Spread 22.0 unch.
• 3-Month EUR/USD Cross-Currency Basis Swap -25.5 +.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .09% unch.
• Yield Curve 145.0 +4 basis points
• China Import Iron Ore Spot $121.10/Metric Tonne +.50%
• Citi US Economic Surprise Index 50.70 -2.1 points
• 10-Year TIPS Spread 2.49 +2 basis points

Overseas Futures:

• Nikkei Futures: Indicating +100 open in Japan
• DAX Futures: Indicating +33 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, then added them back
• Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +1.31%

Sector Underperformers:

• 1) Hospitals -1.01% 2) Utilities +.28% 3) REITs +.32%
  

Stocks Faling on Unusual Volume:

• HCA, THC, CYH, VVUS, CBM, TBBK, CVC, XCO, PWE, CHTR, ESRX, BSFT, NVO, CDE, Z, GNRC, FOSL, IMPV, NYX, TDW, DISCA, NSM, DWRE, NLY, MR, PCYC, MSCI, SNCR, AT and ET

Stocks With Unusual Put Option Activity:

• 1) ESRX 2) HCA 3) HL 4) NYX 5) HUM
  

Stocks With Most Negative News Mentions:

• 1) CDE 2) SREV 3) TWTC 4) TER 5) ENR
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.73%

Sector Outperformers:

• 1) Education +3.24% 2) Steel +2.45% 3) Defense +1.92%
  

Stocks Rising on Unusual Volume:

• ALJ, UBS, DISH, TSU, VIV, RYAAY, MYGN, FN, ENOC, MM, AFSI, JIVE, HAS, AOL, THO, RYAAY, WTW, VSI, CSC, ANDE, TESO, BZH, RTEC, CVD, MED, SYKE, EOG, KLIC, AFSI, THO, WGO, CLNE, PSX, NSR, R, FIS, NTI, DRIV, TXI, MLM, SLH, BCOR, EOG, VMC, FBC, FUN, KRO and CHMT

Stocks With Unusual Call Option Activity:

• 1) ESRX 2) AOL 3) DECK 4) CDE 5) FOSL
  

Stocks With Most Positive News Mentions:

• 1) CVD 2) ODP 3) ACI 4) MRO 5) SIAL

Charts:

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

Tuesday Watch

Evening Headlines 
Bloomberg: 

• Euro Near 8-Week Low on Greece Aid Concern, Slowing Data. The euro traded 0.2 percent from an eight-week low amid concern Greece will struggle to win bailout funds, risking its future in the European monetary bloc. The shared currency maintained declines versus most of its 16 major counterparts ahead of data that may add to signs the region’s debt crisis is hurting growth. Australia’s dollar climbed to the highest in five weeks after the Reserve Bank unexpectedly left interest rates unchanged. The Dollar Index was near the strongest level in two months before today’s U.S. presidential election. The yen advanced as Japanese shares fell, boosting demand for haven assets. “The euro is looking softer in a risk-averse market ahead of the Greek parliamentary vote on its budget and austerity measures,” said Ken Takahashi, assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. (TRBK) “Should they be rejected, concerns about a Greek exit could flare up again and the euro could see another leg down.” 
• Enel Credit Rating Cut by Moody’s on Falling Demand, Regulation. Enel SpA (ENEL), Italy’s biggest utility, had its credit rating cut by Moody’s Investors Service to Baa2 from Baa1 on concerns falling demand is hurting profit margins. “Whilst Moody’s expects the company to continue to take measures to limit the impact on its financial profile, these are unlikely to be sufficient to counter the increased risks and pressures,” Moody’s said yesterday in a statement.
• China’s Stocks Drop Most in Week; China Eastern, Moutai Decline. Chinese stocks fell, dragging down the benchmark index by the most in a week, before a Chinese leadership congress and U.S. presidential election this week. China Eastern Airlines Corp. [], the nation’s second-biggest domestic carrier, slid 2.8 percent after Credit Suisse Group AG downgraded the stock to underperform. Liquor maker Kweichow Moutai Co. (600519) paced declines for consumer staples producers on speculation recent gains were excessive relative to earnings prospects. Aluminum Corp. of China Ltd. and China Shenhua Energy Co. led losses for metal and energy producers on concern Europe will struggle to contain its sovereign debt problems. The Shanghai Composite Index (SHCOMP) slumped 1.5 percent to 2,082.40 at the 11:30 a.m. local-time break, heading for the biggest decline since Oct. 26.
• Copper Orders in China See 'No Big Recovery," Macquarie Says. Copper stockpiles in bonded warehouses in Shanghai at about 750,000 tons vs 300,000 tons end-2011, Bonnie Liu, analyst at Macquarie Group Ltd. said in an emailed research note. There are more than 1 millions tons of aluminum inventories in "visible" warehouses in China. Aluminum output will be around 22 million tons this year, may rise 10% next year, leading to further build-up of inventories, with demand growth in 2013 estimated at 7-8%.
• Netanyahu Says Iranian Nuclear Program to Cease If Re-Elected. Israeli Prime Minister Benjamin Netanyahu, who faces national elections in January, said the Iranian nuclear program would cease to exist by the end of his next term, should he be re-elected. “The responsibility, in the end, is that of the prime minister,” Netanyahu said when asked if Israel could decide to strike Iran even if the military chief of staff opposed such a move.
• Apple(AAPL) Said to Be Exploring Switch From Intel for Mac. Apple Inc. (AAPL) is exploring ways to replace Intel Corp. (INTC) processors in its Mac personal computers with a version of the chip technology it uses in the iPhone and iPad, according to people familiar with the company’s research. Apple engineers have grown confident that the chip designs used for its mobile devices will one day be powerful enough to run its desktops and laptops, said three people with knowledge of the work, who asked to remain anonymous because the plans are confidential. Apple began using Intel chips for Macs in 2005. 
• China Most Threatening Cyberspace Force, U.S, Panel Says. China is “the most threatening actor in cyberspace” as its intelligence agencies and hackers use increasingly sophisticated techniques to gain access to U.S. military computers and defense contractors, according to the draft of an annual report mandated by Congress. Chinese hackers are moving into “increasingly advanced types of operations or operations against specialized targets,” such as sensors and apertures on deployed U.S. military platforms, according to the report. “China’s persistence, combined with notable advancements in exploitation activities over the past year, poses growing challenges to information systems and their users,” the U.S.- China Economic and Security Review Commission said in the draft obtained by Bloomberg News. “Chinese penetrations of defense systems threaten the U.S. military’s readiness and ability to operate.”
• Suzuki Pulls Out of U.S. Car Market After Almost Three Decades. Suzuki Motor Corp. (7269) will pull out of the U.S. car market after almost three decades, following Saab Automobile and Isuzu Motors Ltd. (7202) among automakers making their exits after failing to earn profits in the country. Suzuki will stop the sale of new automobiles in the U.S., though it will continue offering motorcycles, all-terrain vehicles and boat motors, the Hamamatsu, Japan-based carmaker said in a statement today. The company’s U.S. distributor filed for bankruptcy protection in Santa Ana, California as part of the reorganization.

Wall Street Journal: 

• Election 2012: Streaming Coverage.
• In Battlegrounds, an Eye on Recount Rules. With Photo Finishes Possible in Several States, Observers on Both Sides Scrutinize Provisions for Rechecking Vote Tallies.
• Lagarde Puts Pressure on White House Winner. The head of the International Monetary Fund said Monday the pressure is on the next resident of the White House, warning of global reverberations if the so-called fiscal cliff is not addressed quickly once the election is decided. IMF Managing Director Christine Lagarde, speaking at the end of two days of meetings of finance officials in Mexico City, told reporters that the global recovery is fragile and “remains at risk if the needed policy actions are not implemented.” Foremost on the list of things that must be addressed: the package of tax increases and across-the-board spending cuts that could take effect at the beginning of next year in the U.S. if Congress and the White House fail to take action before year end.
• Deadly Blasts Escalate Strife in Bahrain. Five bombs exploded in districts of Bahrain's capital popular with tourists and Westerners, killing two expatriates and escalating tensions between the government and its opponents in the Persian Gulf monarchy. There was no claim of responsibility for Monday's attacks in Manama. Bahrain's security forces regularly clash with extremist factions of the largely Shiite Muslim political opposition, which is frustrated by the slow pace of political change by the Sunni leadership.
• Europe, Central Bank Spar Over Athens Aid. Discord Over Who Should Shoulder Burden of Giving Greece More Time to Repay Loans Comes Ahead of Crucial Deadline.Europe's governments and the European Central Bank are at odds about who should shoulder the financial burden of giving Greece more time to repay its loans and remain part of the euro zone. The search for a solution for Greece, whether by forgiving some of the money it owes or giving it yet more bailout loans, has come back to haunt the currency union ahead of the ECB's monthly policy meeting on Thursday. 
• Greeks Plan Strikes On Eve of Votes. Greece's three-party coalition is having to prepare for two major votes on austerity in Parliament this week, at the same time a series of strikes is set to paralyze the country in protest of the plans, and as the coalition deals with internal divides.
• Stephens: Liberal Exceptionalism. How long can the laws of fiscal—and political—gravity be suspended?

Barron's:

• AAPL(AAPL): Street Heartened by Big ‘mini’ Sales, Affirms Estimates.

Fox News: 

• Exclusive: Cable warning of Benghazi consulate vulnerability would have gone to White House, officials say. Current and former intelligence officials tell Fox News that a classified State Department cable sent Aug. 16 -- and which said the Benghazi consulate could not defend against a "coordinated attack" -- would certainly have gone to the White House National Security Council staff. "The National Security Council sees everything," a former senior intelligence official told Fox News. "The staff are sitting on top of all the cable traffic which means the national security advisor (Tom Donilon) and deputy national security advisor (Denis McDonough) have some explaining to do. If Libya was of interest to this administration, the national security staff saw it."

CNBC: 

• Businesses Will Have a Lot of ‘Concerns’ If Obama Wins: Ross. An Obama re-election will only increase corporate America’s fears as it holds back on investing in the country amid a stalemate over the “fiscal cliff” and lack of clarity over tax rates, billionaire investor Wilbur Ross told CNBC.
• Decision 2012: Doctors Fight Over Obamacare Provision. 
• Traders Bet on Romney Stocks as Cliff Hanger Election Nears. (graph)

Zero Hedge: 

• Valencia To People: 'Don't Get Sick' As Pharmacies Strike Indefinitely.
• The Chinese Credit Bubble - Full Frontal.

Business Insider: 

• 20 US Cities That Are Getting Crushed By Foreclosures. 
• The 10 People In Line To Lead The Federal Reserve. 
• This Ugly Chart Illustrates How Australia's Economy Is Such A Mess.
• The Lines At NYC's Port Authority Are Like Nothing We've Ever Seen Before. (pics)
• The Most Interesting Ballot Initiatives Planned For Election Day. 
• Residents Of NYC's Devastated Rockaways Are Still In A State Of Disbelief. (video)

NY Post: 

• EXCLUSIVE: Rochdale rogue trader probe. The FBI has started a probe of a rogue Wall Street trader for alleged stock manipulation, The Post has learned. The trader, identified by people familiar with the probe as David Miller, of Rochdale Securities, allegedly made an unauthorized purchase of 1.6 million shares of Apple — a $1 billion trade that has rocked the small brokerage and put it on the brink of extinction.

The Blaze: 

• Sen. McCain Reaches Breaking Point Discussing Benghazi With Media: I Don’t Expect You to ‘Understand Our Veterans’. (video)

Gallop: 

• Romney 49%, Obama 48% in Gallup's Final Election Survey.

USA Today: 

• CBS transcript: Obama wouldn't call Benghazi terrorism. On the eve of the presidential election CBS News program 60 Minutes released a transcript of an interview with President Obama in which he said it was "too early to tell" whether the attack on the U.S. consulate in Libya was an act of terrorism. The statement appears to contradict Obama's claim in a second debate with GOP presidential candidate Mitt Romney that he identified the Sept. 11 attack that killed Ambassador Christopher Stevens and three other Americans as a terror attack the day after it happened.

Reuters:

• Nike(NKE) close to selling Cole Haan to Apax: sources. Nike Inc is in final negotiations to sell its Cole Haan handbag and shoe brand to private equity firm Apax Partners, in a deal that could fetch around $500 million, according to three people familiar with the matter. 
• Express Scripts(ESRX): 2013 views too aggressive; shares fall. U.S. pharmacy benefits manager Express Scripts Holding Co said analyst forecasts for its 2013 results were too aggressive, casting doubt on how well it is integrating its $29 billion purchase of Medco Health Solutions Inc and sending its shares down 14 percent. 
• Zillow(Z) forecasts weak revenue on losing advertiser. Real estate website Zillow Inc forecast fourth-quarter revenue below analysts' estimates after it lost one of its larger advertisers, Foreclosure.com, sending the company's shares down 25 percent in after-market trading. 
• Fed's Williams: QE3 to likely top $600 billion. The U.S. Federal Reserve's latest round of asset purchases will probably top $600 billion, surpassing its second round of bond-buying, as the central bank continues to buy assets until the labor market improves, a top Fed official said on Monday.

Telegraph: 

• IMF warns over-taxed France risks slipping behind Italy and Spain. The International Monetary Fund has told France to take urgent measures to head off national economic decline, warning that the country risks being left behind as southern Europe embraces reform.

MailOnline: 

• Exclusive: Romney UP one point in Ohio and TIED in Pennsylvania and Wisconsin, according to his campaign's internal polling. Mitt Romney is ahead by a single percentage point in Ohio - the swing state that could well decide the election - according to internal polling data provided to MailOnline by a Republican party source. Internal campaign polling completed on Sunday night by campaign pollster Neil Newhouse has Romney three points up in New Hampshire, two points up in Iowa and dead level in Wisconsin. Most startlingly, the figures show Romney and Obama deadlocked in Pennsylvania.

China Daily:

• China Labor Force May Decline by 30 Million by End of Decade. A decrease in the labor force will result in a lower savings ratio, diminishing returns and slower economic growth, citing Cai Fang, director of the Institute of Population and Labor Economics under the Chinese Academy of Social Sciences. China's cheap labor is "drying up", he said.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.75% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 117.0 -1.0 basis point.
• Asia Pacific Sovereign CDS Index 89.5 -1.0 basis point.
• FTSE-100 futures +.22%.
• S&P 500 futures +.11%.
• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (NYX)/.41
• (EMR)/1.05
• (MRO)/.65
• (DTV)/.92
• (CVS)/.84
• (DISH)/.56
• (FOSL)/1.16
• (MMC)/.38
• (CVC)/.16
• (TDW)/.75
• (DISCA)/.63
• (CSC)/.47
• (NWSA)/.37
• (DOX)/.69
• (RAX)/.19

Economic Releases
10:00 am EST

• JOLTs Job Openings for September are estimated to rise to 3653 versus 3561 in August.

Upcoming Splits

• (HMST) 2-for-1
  

Other Potential Market Movers

• The US election, Eurozone Services PMI, Eurozone PPI, Germany Factory Orders, ISM New York for October, 3Y T-Note auction, weekly retail sales reports and the Piper Jaffray Tech/Media/Telecom Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.