Bull Radar

Style Outperformer:

• Large-Cap Value -.4%

Sector Outperformers:

• 1) Education +3.2% 2) Retail +1.3% 3) Restaurants +.7%

Stocks Rising on Unusual Volume:

• ARRS, KTWO, CROX, LTRPA, CYBR, HRI, AMPH, TRIP, ACIQ, ANGI, PTLA, NVEE, XOMA, SBH, BWXT, FOSL, TCX, CSOD, ETSY, MTZ, ALRM, WMGI, MGNX, JAZZ, AAOI, CROX, SGMS, LTRPA, NVDA, HRI, ZFGN, CVNA, ENV, FLS, GDOT, SUN, WWD, LGND, CARG, RRR, FOSL, KELD, IAC, INOV, MAXR, BOLD and LILA

Stocks With Unusual Call Option Activity:

• 1) EPD 2) FNSR 3) ZION 4) TRIP 5) KNX

Stocks With Most Positive News Mentions:

• 1) TRIP 2) CYBR 3) CVNA 4) ULTA 5)LB

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +2.7% Above 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 46.4% of Issues Advancing, 51.0% Declining
• 70 New 52-Week Highs, 53 New Lows
• 34.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.2%
• Vix 16.5 +.6%
• Total Put/Call .89 -6.3%
• TRIN/Arms 1.43 +44.4%

Thursday Watch

Evening Headlines

Bloomberg:      

• China Has More Distressed Corporate Debt Than All of EM Combined.

• Stocks Rally Builds in Asia After Election Hurdle. Stocks in Asia jumped following a strong U.S. session as investors moved past the hurdle of uncertainty presented by America’s midterm elections and saw benefits in Washington’s gridlock. Equities posted strong gains in Japan and South Korea as trading got underway Thursday, while Australian shares also advanced. Futures pointed higher in Hong Kong and China. The S&P 500 Index rose more than 2 percent as investors bet a split Congress dimmed chances President Donald Trump’s signature tax cuts will be reversed while reducing the possibility of major fiscal initiatives that might have pushed up interest rates. The dollar ticked higher and Treasury yields held gains. Japan’s Topix index rose 1.4 percent as of 9:03 a.m. in Tokyo. Hong Kong’s Hang Seng futures climbed 0.8 percent. Australia’s S&P/ASX 200 Index advanced 0.4 percent. S&P 500 futures were little changed. 

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

• Fed Preview, Abe's Spending Dilemma, China's Tech Race: Eco Day.

• Risk-Asset Rally Has Legs as Split Congress Seen Mending Trade.

• Acting AG Whitaker Says He's Committed to Leading a ‘Fair’ DOJ.

Wall St. Journal:  

• Jeff Sessions Pushed Out as Attorney General.

• The Nancy Pelosi Method.

• Trump 2.0 Begins.

• What the Midterm Election Shows: America’s Two Parties Live In Divergent Worlds.

MarketWatch.com:

• Here are the post-election stock-market winners in the Dow, S&P 500 and Nasdaq.

• As election clouds clear, get ready for the rush back into U.S. stocks, says strategist.

Fox News:   

• Top Dems demand Whitaker recusal from Russia probe, sound alarm after Sessions' resignation.

CNBC:       

• S&P 500 and Dow surge in best rally after midterm elections since 1982. 

• Comcast is developing a video-streaming box for broadband-only customers.

• Cramer's advice on investing during Washington gridlock: Buy fast growers.

• Mike Bloomberg and Tom Steyer become kingmakers for Democrats as both billionaires mull a 2020 run.

• Square(SQ) earnings beat on top and bottom line but miss on guidance.

• JP Morgan's(JPM) widely followed market analyst sees year-end rally, led by the riskiest assets.

• Stocks making the biggest moves after hours: Roku, Square, Wynn Resorts and more.

Zero Hedge:

• Technology Detox: The Health Benefits of Unplugging & Unwinding.

• Japanese Machine Orders Crash Most On Record As BoJ Member Admits "Can't Solve Structural Problems".

• "Two Can Play That Game" - Trump Threatens "War Posture" If Dems Pursue Investigations.

• "You Are A Rude, Terrible Person": Trump Unloads On CNN's Jim Acosta During Tense Press Briefing.

• Credit Card Debt Unexpectedly Shrinks As Student Loans Hit Fresh Record High.

• It Begins: Maxine Waters Vows To Examine Trump Ties To Deutsche Bank.

• Major Math Error Puts Widely-Cited Global Warming Study On Ice.

• Stocks Surge On Midterm-Malaise But Bonds & Bullion Bid.

Night Trading 

• Asian equity indices are +.5% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 84.25 -2.0 basis points. 

• Asia Pacific Sovereign CDS Index 9.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 67.41 -.05%.

• FTSE 100 futures +.64%.

• S&P 500 futures -.17%.

• NASDAQ 100 futures -.23%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (AZN)/.66

• (CAH)/1.07

• (DDS)/.52

• (DISCA)/.61

• (DHI)/1.22

• (JCI)/.93

• (LGND)/1.03

• (LOXO)/-1.21

• (SGMS)/-.24

• (STRA)/.68

After the Close:

• (ATVI)/.50

• (BRKS)/.38

• (DBX)/.06

• (FNKO)/.23

• (HTZ)/1.77

• (OSTK)/-.71

• (RDFN)/.02

• (DIS)/1.34

• (YELP)/.35

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 213K versus 214K the prior week.

• Continuing Claims are estimated to rise to 1634K versus 1631K prior.
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds rate at 2.0-2.25%.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Trade Balance report, German Import Price report, WasDe Crop report, 3Q Mortgage Delinquencies/Foreclosures report, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index, Stifel Growth Conference, (ASML) investor day, (ATI) investor day, (ULTA) investor day, (LB)/(CATO)/(BKE) Oct. sales reports and the (SYK) analyst meeting could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.

Stocks Close Substantially Higher on Election Optimism, Stable Long-Term Rates, Diminished Trade War Fears, Tech/Healthcare Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 16.8 -15.6%

• Euro/Yen Carry Return Index 135.07 +.21%

• Emerging Markets Currency Volatility(VXY) 9.95 -.8%

• S&P 500 Implied Correlation 39.53 -.70%

• ISE Sentiment Index 96.0 +71.4%
  

• Total Put/Call .97 -13.4%

• NYSE Arms 1.32 +45.05%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.67 -2.63%
  

• America Energy Sector High-Yield CDS Index 534.0 -1.09%

• European Financial Sector CDS Index 84.13 -3.94%

• Italian/German 10Y Yld Spread 289.0 -7.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 9.55 -1.29%

• Emerging Market CDS Index 186.71 -2.04%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.16 +.52%

• 2-Year Swap Spread 18.0 -1.0 basis point

• TED Spread 26.25 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -41.5 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.43 +.34%
• 3-Month T-Bill Yield 2.35% +1.0 basis point

• Yield Curve 26.75 -2.25 basis points

• China Iron Ore Spot 72.05 USD/Metric Tonne +.36%

• Citi US Economic Surprise Index 9.70 -.1 point

• Citi Eurozone Economic Surprise Index -49.4 -1.9 points

• Citi Emerging Markets Economic Surprise Index -9.30 unch.

• 10-Year TIPS Spread 2.08+1.0 basis point
• 78.1% chance of Fed rate hike at Dec. 19th meeting, 79.5% chance at Jan. 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +420 open in Japan 
• China A50 Futures: Indicating +157 open in China

• DAX Futures: Indicating +48 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 100% Net Long

Bull Radar

Style Outperformer:

• Large-Cap Growth +2.5%

Sector Outperformers:

• 1) Software +3.6% 2) Healthcare Providers +3.5% 3) Internet+3.0%

Stocks Rising on Unusual Volume:

• ITG, IEFA, AY, TWLO, NOBL, ETSY, TYL, ARRS, ASH, DATA, WES, EFAV, NBLX, NRE, FIVN, USMV, FOXF, SRRK, SEND, DVA, RPD, DCP, DIOD, HZNP, NBL, GHDX, CTMX, NBLX, PLNT, EVH, NEWR, KTOS, CTSO, WES, GVA, STAA, RNG, CNC, NVRO, ZEN, XEC, WCG, FEYE, DXCM, PDCE, ALGN, PXD, PEN, MDRX and TREE

Stocks With Unusual Call Option Activity:

• 1) CPE 2) PLNT 3) ETSY 4) MDXG 5) IAC

Stocks With Most Positive News Mentions:

• 1) TWLO 2) ODP 3) DATA 4) EVH 5) DXCM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +21.3% Above 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 67.4% of Issues Advancing, 30.2% Declining
• 65 New 52-Week Highs, 40 New Lows
• 31.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.9%
• Vix 17.3 -13.0%
• Total Put/Call 1.07 -4.5%
• TRIN/Arms 1.84 +101.0%