BETWEEN THE HEDGES

Tuesday, May 20, 2014

Bull Radar

Posted by Gary .....at 10:52 AM

Style Outperformer:

Large-Cap Value -.50%

Sector Outperformers:

1) Hospitals +.68% 2) Internet +.34% 3) Utilities -.21%

Stocks Rising on Unusual Volume:

ARX, OPHT, SSLT, CLVS and FEYE

Stocks With Unusual Call Option Activity:

1) INO 2) NI 3) NEE 4) SPLS 5) DKS

Stocks With Most Positive News Mentions:

1) AAPL 2) CDNS 3) HCA 4) GOOG 5) DOW

Charts:

ETFs Rising on Unusual Volume

Stocks Rising on Unusual Volume

Tuesday Watch

Posted by Gary .....at 1:11 AM

Evening Headlines
Bloomberg:

Pop-Up Army Shows How Splintering Ukraine Girds for War. A training grenade arcs toward a group of nine men practicing combat with trench shovels. This is the Ukrainian government’s volunteer civilian army, getting a crash combat course as the country braces for war. “I’m sure they won’t lay down their guns during the first fight,” Colonel Volodymyr Gornik, who lobbed the projectile, said at the base outside Kiev, the capital. “They won’t be cannon fodder.”

Russia Close to $400 Billion Gas Pipeline Deal in Pivot to China. Russia is close to signing a decades-long contract to supply natural gas to China at a price that would value the deal at about $400 billion, according to Prime Minister Dmitry Medvedev. Medvedev’s boss Vladimir Putin arrives in Shanghai today to try and complete an agreement after more than 10 years of talks. The stumbling block has been price, but with Putin facing trade and financial sanctions from the U.S. and European Union after he annexed Crimea from Ukraine, a deal is seen as probable. “It’s time we reached an agreement with the Chinese on this issue,” Medvedev said in a Bloomberg Television interview in Moscow yesterday. “It is very likely that there will be a contract, which means long-term contracts.”

China’s Casino-to-Internet Bust Deepens as ChiNext Sinks. Chinese stock investors are running out of places to hide. First, it was the Macau casinos, which began tumbling in January after an average 217 percent rally in the previous two years. Then came the selloff in Internet shares, which dragged down Tencent Holdings Ltd. and Sina Corp. more than 15 percent since March. Small-cap stocks were the latest to buckle, with the ChiNext Index entering a bear market last week. The few pockets of strength in the $3.2 trillion stock market are disappearing as China’s weakening economy reduces investor appetite for even the fastest-growing companies. All 10 industry groups in the CSI 300 Index of mainland-traded shares have retreated this year while just 1 percent of the 170 Chinese stock funds tracked by Bloomberg recorded gains, versus more than 70 percent last year.

China Plans Additional 100 IPOs in Second Half of 2014. China plans to have about 100 initial public offerings from June through the end of this year as the government pushes for development in capital markets. The stock sales will be spread over time to ensure there are a similar number each month, China Securities Regulatory Commission Chairman Xiao Gang said in a statement posted on the regulator’s website yesterday.

Irish Jump Into Real Estate Game as Bubble Echoes Grow. Charles O’Rourke reckons it’s different this time as he jumps into the real estate game. The 81-year-old retiree says he took “massive” losses on his bank stocks when Ireland’s financial system melted down in 2008. Now he’s joined billionaires George Soros and John Paulson in acquiring shares in one of the real estate investment trusts buying property in the Irish capital, Dublin.

Credit Suisse Agrees to Plead Guilty in Tax Case Says US. Credit Suisse AG representatives appeared in a Virginia federal court to plead guilty on behalf of the Swiss firm to helping Americans cheat on their taxes, making it the first bank in more than a decade to admit to a crime in the U.S. The prosecution marks a tougher stance by the Justice Department, which has faced criticism that it avoided pursuing large banks after the 2008 financial crisis because of the potential economic fallout. U.S. prosecutor Mark Lytle today said the bank would enter a plea.

Asian Stocks Swing After U.S. Shares Gain on Low Volumes. Asian stocks swung between gains and losses as information technology companies rose and industrial shares fell, after U.S. equities increased amid low volume as Internet and small-cap shares extended a rebound. Yahoo Japan Corp. soared 14 percent as brokerages raised its rating after the nation’s largest Internet portal canceled plans to acquire eAccess Ltd. from SoftBank Corp. Ryman Healthcare Ltd., aNew Zealand healthcare provider, dropped 2 percent. Sumitomo Metal Mining Co. rose 4.3 percent in Tokyo. The MSCI Asia Pacific Index was little changed at 139.32 as of 9:29 a.m. in Tokyo after falling 0.8 percent over the past two days.

Wall Street Journal:

Putin Again Orders Troops at Ukraine Border to Return to Bases. NATO, U.S. Officials Say They See No Evidence Yet of Pullback. President Vladimir Putin ordered Russian troops involved in exercises near the Ukrainian border to return to base—again—and called anew on Monday for Ukraine's government to withdraw its military from the restive east. The North Atlantic Treaty Organization and the Obama administration were skeptical, however, saying they have yet to see evidence of any drawdown of Russian troops despite a series of similar claims from the Kremlin.

Worries of a Bank-Loan-ETF Exodus Mount. Investors have been pulling money out of exchange-traded funds backed by bank loans, once again raising concerns about the ability of lightly traded financial markets to handle a big exodus from ETFs. Leveraged-loan ETFs last month had three consecutive weekly net withdrawals, together valued at $107.5 million, marking the only such streak of investors pulling money out of the group since the first bank-loan ETF was launched in 2011,...

J.P. Morgan's(JPM) Dimon Aims to Stay Put. CEO Tells Group of Shareholders, 'I'm Going Nowhere.

Zero Hedge:

Thailand Army Declares Martial Law.

What Would Warren Do? (video)

'Smoking Gun' From The Federal Reserve's Murder Of The Middle Class. (graph)

GoPro Is Going Public: It Hopes You Don't Focus On The Following Chart.

Thai Stocks Tumble As Army Censors Media To "Avoid Provoking Unrest".

Business Insider:

WikiLeaks Threatens To Reveal Information That Glenn Greenwald Says Could Lead To 'Deaths'.

Reuters:

Fed's super-easy policies pose risks, officials say. The Federal Reserve's super-easy policies, if pursued for too long, could have adverse consequences in the long run, two top Fed officials said on Monday, although the biggest risk is not runaway inflation. Instead, San Francisco Fed President John Williams told reporters after participating in a monetary policy conference at the George W. Bush Institute in Dallas, one major risk is that low rates for too long could push asset prices too high, or encourage investors to take on too much risk.

Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99

MNI:

China's Trade Outlook Remains Severe, Mofcom Official Says. External demand is still weak with the recovery in developed economies remaining unstable and demand from emerging economies shrinking, citing Zhang Ji, the head of the foreign trade department of the Ministry of Commerce. It would be an arduous job for China to meet its 7.5% full-year trade growth target, Zhang said.

Australian Financial Review:

Australia's AAA Rating May Be Reviewed Without More Cuts. S&P sovereign analyst Craig Michaels cited as saying that the ratings agency is "looking to see the government improve budget performance over the next few years."

Evening Recommendations

None of note

Night Trading

Asian equity indices are -.50% to +.50% on average.

Asia Ex-Japan Investment Grade CDS Index 121.0 +2.0 basis points.

Asia Pacific Sovereign CDS Index 85.75 +.25 basis point.

FTSE-100 futures +.01%.

S&P 500 futures -.03%.

NASDAQ 100 futures +.03%.

Morning Preview Links

Earnings of Note
Company/Estimate

(DCI)/.47

(DKS)/.53

(TRB)/.68

(MDT)/1.12

(TJX)/.67

(ADI)/.56

(TDW)/.62

(INTU)/3.50

(CRM)/.10

(HD)/.99

(RRGB)/.72

(SPLS)/.21

Economic Releases

None of note

Upcoming Splits

(AWH) 3-for-1

Other Potential Market Movers

The Fed's Dudley speaking, Fed's Plosser speaking, Fed's Fischer nomination vote in Senate, UK inflation data, weekly US retail sales reports, Goldman Sachs Basic Materials Conference, UBS Financial Services Conference, (CSCO) investor day, (WFC) investor day and the (ARMH) investor day could impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and financial 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.

Monday, May 19, 2014

Stocks Rising into Final Hour on Diminished Russia/Ukraine Tensions, Buyout Speculation, Technical Buying, Biotech/Tech Sector Strength

Posted by Gary .....at 3:19 PM

Broad Equity Market Tone:

Advance/Decline Line: Higher

Sector Performance: Most Sectors Rising

Volume: Light

Market Leading Stocks: Outperforming

Equity Investor Angst:

Volatility(VIX) 12.46 +.16%

Euro/Yen Carry Return Index 145.03 +.02%

Emerging Markets Currency Volatility(VXY) 7.13 -.97%

S&P 500 Implied Correlation 56.47 +1.63%

ISE Sentiment Index 112.0 +14.29%

Total Put/Call .78 -15.22%

NYSE Arms 1.10 -9.69%

Credit Investor Angst:

North American Investment Grade CDS Index 65.16 +.64%

European Financial Sector CDS Index 79.34 +1.68%

Western Europe Sovereign Debt CDS Index 37.24 +4.49%

Asia Pacific Sovereign Debt CDS Index 86.26 +1.91%

Emerging Market CDS Index 263.76 -2.07%

China Blended Corporate Spread Index 358.99 -.20%

2-Year Swap Spread 15.5 +.75 basis point

TED Spread 20.75 -.5 basis point

3-Month EUR/USD Cross-Currency Basis Swap -6.25 +.5 basis point

Economic Gauges:

3-Month T-Bill Yield .02% unch.

Yield Curve 219.0 +3.0 basis points

China Import Iron Ore Spot $98.50/Metric Tonne -2.18%

Citi US Economic Surprise Index 3.0 +5.3 points

Citi Emerging Markets Economic Surprise Index -24.60 +.6 point

10-Year TIPS Spread 2.16 -2.0 basis points

Overseas Futures:

Nikkei Futures: Indicating +100 open in Japan

DAX Futures: Indicating +11 open in Germany

Portfolio:

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

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

Market Exposure: Moved to 75% Net Long

Today's Headlines

Posted by Gary .....at 2:58 PM

Bloomberg:

Russia Says It Has Ordered Troops Near Ukraine Back to Base. President Vladimir Putin ordered Russian troops near the Ukrainian border back to base, the Kremlin said, signaling a possible easing of tensions six days before Ukraine’s presidential election. Putin toldforces in the Rostov, Belgorod and Bryansk regions to return to their bases after completing exercises, according to the presidential press service. The comments came as Ukrainian forces continued skirmishes with pro-Russian insurgents after separatists in the Donetsk and Luhansk regions said they planned their own elections later this year. Putin, whom the Ukrainian government accuses of fomenting unrest in the east and who annexed Crimea in March, promised a withdrawal of Russian forces from the border two weeks ago. NATO Secretary General Anders Fogh Rasmussen said today he’s yet to see any sign troops have been pulled back.
China Stocks Fall to Three-Week Low as Home-Price Growth Slows. China’s stocks fell, sending the benchmark index to the lowest level in three weeks, amid concern weakness in the property market and curbs on interbank borrowing will worsen the economic slowdown. Poly Real Estate Group Co. led Shanghai-based developers to the biggest loss among industry groups after new-home prices climbed in the fewest cities since October 2012. China Minsheng Banking Corp. slid to a two-month low as UBS AG said it was cautious on the lender’s shares after the government ordered interbank lending restrictions. Wuliangye Yibin Co. fell 2.5 percent after the China Securities Journal said the company had cut the price of some liquor products by more than 30 percent. The Shanghai Composite Index (SHCOMP) dropped 1.1 percent to 2,005.18 at the close, the lowest since April 28, after briefly dropping below the 2,000 level.
Iron Ore Declines Below $100 for First Time Since 2012 on China. Iron ore slipped below $100 a ton for the first time in almost two years on speculation a home-price growth slowdown in China, the biggest user, will dampen demand and worsen the global seaborne glut. Ore with 62 percent content delivered to the Chinese port of Tianjin fell 2.2 percent to $98.50 a dry ton today, the lowest since Sept. 13, 2012, according to data from The Steel Index Ltd. The commodity dropped 27 percent this year, after falling 7.4 percent last year. Iron ore entered a bear market in March as the world’s biggest miners including BHP Billiton Ltd. and Rio Tinto Group boosted output as economic expansion in China is forecast by analyst to slow to the weakest since 1990. The commodity used to make steel was expected to be below $100 going into 2015 as the surplus builds, Goldman Sachs Group Inc. said this month.
Finra Trading-Surveillance System Will Be Curbed, Ketchum Says. The Financial Industry Regulatory Authority, Wall Street’s self-regulator, is moving to curb a trading-surveillance system that has generated opposition from brokers, Chief Executive Officer Rick Ketchum said today.
Mom and Pop Bet Against Hedge Funds on Junk-Rated Loans. Mom-and-Pop investors have had it with junk-rated loans. Professional money managers, meanwhile, are still piling in and using borrowed money to buy them up. History will decide who’s the smart money here.

CNBC:

U.S. Charges China With Cyber-Spying on American Firms. The Justice Department filed criminal charges against five hackers in the Chinese military Monday, accusing them of stealing American trade secrets through cyber-espionage. The efforts were directed at six American victim companies: Westinghouse Electric, U.S. subsidiaries of SolarWorld AG, U.S. Steel, Allegheny Technologies and Alcoa. The United Steel Workers union was also targeted. Each of the alleged hackers was hit with 31 criminal counts for a conspiracy that stretched back eight years, officials said.
Roommates are a financial lifeline for some seniors. Living with roommates when you're 25 is one thing. When you're 65, it's another story—but it's a reality for a growing number of older Americans.

ZeroHedge: