Bull Radar

Style Outperformer:

• Small-Cap Value +.23%

Sector Outperformers:

• 1) Homebuilders +2.12% 2) Alt Energy +1.86% 3) Steel +1.77%
  

Stocks Rising on Unusual Volume:

• FSLR, DEPO, GTLS, CYBR, SHOO, TOL, SPWR, ZINC, FLWS, SF, RLGY, LNG, NLS and CBRL

Stocks With Unusual Call Option Activity:

• 1) BK 2) LOW 3) HPQ 4) SLXP 5) ACAS
  

Stocks With Most Positive News Mentions:

• 1) COH 2) DISH 3) MTH 4) SF 5) ISIS
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg:

• Sanctions Will Not Deter Putin: Rumer. (video) Eugene Rumer, senior associate and the director of Carnegie’s Russia and Eurasia Program, discusses the Ukraine crisis with Bloomberg's Trish Regan on "Street Smart."  

• Greek Plan to Tackle Economy Goes Before Finance Chiefs. Greece’s month-old government is about to find out whether a package of new economic measures sketched in recent days is enough to win more funding from the rest of the euro region to keep the country solvent. A draft list was sent to creditor institutions on Monday, based on a provisional agreement on Feb. 20. A Greek government official said the policies will be provided to the euro-area group of finance ministers on Tuesday before they discuss on a conference call whether the commitments go far enough.

• Asian Stocks Retreat as Investors Await Greece Policies, Yellen. Asian stocks dropped as investors awaited details on Greece’s package of economic measures and Federal Reserve Chair Janet Yellen’s testimony to lawmakers. The MSCI Asia Pacific Index slipped 0.1 percent to 144.79 as of 9.01 a.m. in Tokyo, with seven of its 10 industry groups retreating.

Wall Street Journal: 

• Ukraine’s Hryvnia Hits New Low; New Problems for Cease-Fire. Ukrainian military delays artillery withdrawal; central bank acts on currency. Ukraine’s central bank moved to calm panicky currency markets on Monday after the hryvnia plummeted to a new low against the dollar, while the cease-fire in the country’s east showed more signs of unraveling.

• Jury Finds Palestinian Authority, PLO Liable for Terrorist Attacks in Israel a Decade Ago. Federal jury orders groups to pay $218.5 million to victims’ families. A federal jury in New York on Monday found the Palestinian Authority and the Palestine Liberation Organization liable for supporting six terrorist attacks in Israel more than a decade ago and ordered the groups to pay $218.5 million to the American victims’ families. Monday’s verdict in Manhattan federal court follows a lengthy legal battle stemming 

• Big Banks Face Scrutiny Over Pricing of Metals. U.S. Justice Department investigates price-setting process for gold, silver, platinum and palladium. U.S. officials are investigating at least 10 major banks for possible rigging of precious-metals markets, even though European regulators dropped a similar probe after finding no evidence of wrongdoing, according to people close to the inquiries.

• U.S., Iran Explore Option of 10-Year Nuclear Freeze. Compromise could see 12-month ‘breakout’ period for a decade, then allow Iran to build capacity. The U.S. and Iran are exploring a nuclear deal that would keep Tehran from amassing enough material to make a bomb for at least a decade, but could then allow it to gradually build up its capabilities again.

• Brazil Experts Fear a Two-Year Downturn. Economists say nation is likely to suffer first back-to-back decline in GDP since 1930s. For all the debt crises, hyperinflation and boom-and-bust cycles Brazil’s economy has suffered in recent decades, the country hasn’t posted two consecutive years of contraction since the Great Depression. 

• A Simple Cure for ObamaCare: Freedom. The GOP needs a politically defensible alternative if the Supreme Court overturns federal-exchange subsidies.

Zero Hedge:

• Ex-Plunge Protection Team Whistleblower: "Governments Control Markets; There Is No Price Discovery Anymore". (video)

• To Obama, From Russia With Love... And 20 Megatons. (pic)

• Why The Last Thing US Equity Markets Want Is Good Data. (graph)

• Nasdaq Closes Green For Two Weeks In A Row: AAPL Grows By $100 Billion In February. (graph)

• The Chart That The Eurogroup Is Really Worried About. (graph)

• Yellen's "Humphrey-Hawkins" Testimony Preview: "Don't Rock The Boat".

• Recovery? Central Banks Are Easing Policy For 50% Of The World's Population. (graph)

• Big Barbie Is Watching You: Meet The WiFi-Connected Doll that Talks to Your Kids & Records Them.

• What Is China Building In The South China Sea?

• Despite US/Israel Demands, 'Isolated' Russia Offers Iran Advanced Anti-Aircraft Missiles.

• This Is The Biggest Problem Facing The World Today: 9 Countries Have Debt-To-GDP Over 300%. (table)

Business Insider:

• The 'Red King of Gambling' owes $160 million, and that says everything about China's problems.

• Australian mining giant BHP(BHP) just told the market exactly why oil prices are going lower.

• The eastern Ukraine ceasefire is crumbling.

Reuters:

• Stifel to buy Sterne Agee for $150 mln. Investment bank Stifel Financial Corp said it will buy privately held Sterne Agee Group Inc for $150 million to expand its wealth management and fixed-income business. The acquisition will add 730 financial advisers, boosting Stifel's headcount of wealth management professionals by 35 percent to more than 2,800.

• Fed's Williams says wouldn't rule out June rate hike -- Nikkei. "I wouldn't want to eliminate the possibility of a rate hike in June," Williams was quoted as saying. Williams is among the voting members this year on the Fed's policy-setting committee and his thinking on monetary policy is considered in the mainstream at the central bank.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 102.25 +1.75 basis points.

• Asia Pacific Sovereign CDS Index 64.75 -.25 basis point.

• S&P 500 futures -.01%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (EXPD)/.49

• (CMCSA)/.78

• (TREX)/.14

• (ODP)/.04

• (HD)/.89

• (DCI)/.37

• (CBRL)/1.62

• (TOL)/.30

• (SAFM)/2.99

• (AMT)/1.10

• (DPZ)/.93

• (M)/2.40

• (SPWR)/.24

• (WBMD)/.31

• (PZZA)/.50

• (DWA)/-.72

• (DYN)/.47

• (FSLR)/.77

• (CPRT)/.40

• (HPQ)/.91

Economic Releases
9:00 am EST

• The S&P/CS 20 City MoM SA for December is estimated to rise +.6% versus a +.74% gain in November.

9:45 am EST

• Preliminary Markit US Services PMI for February is estimated to rise to 54.5 versus 54.2 in January.
  

10:00 am EST 

• Consumer Confidence for February is estimated to fall to 99.5 versus 102.9 in January.

• Richmond Fed Manufacturing Index for February is estimated at 6.0 versus 6.0 in January.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Yellen's testimony to Senate, Eurozone CPI/GDP reports, HSBC China Manufacturing PMI, $26B 2Y T-Note auction,  weekly US retail sales reports, (JPM) investor day, Wells Fargo Real Estate Conference, (AKAM) investor summit and the RBC Healthcare Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Lower into Final Hour on Escalating Russia/Ukraine Tensions, Rising Emerging Markets Debt Angst, Global Growth Fears, Commodity/Gaming Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 14.85 +3.85%

• Euro/Yen Carry Return Index 140.77 -.49%

• Emerging Markets Currency Volatility(VXY) 10.37 +.19%

• S&P 500 Implied Correlation 63.78 +3.51%

• ISE Sentiment Index 114.0 +5.56%

• Total Put/Call .86 +8.86%

• NYSE Arms 1.88 +91.4% 

Credit Investor Angst:

• North American Investment Grade CDS Index 63.35 -.15%
• America Energy Sector High-Yield CDS Index 684.0 +.93%

• European Financial Sector CDS Index 58.88 -4.41%

• Western Europe Sovereign Debt CDS Index 24.46 -4.49%
• Asia Pacific Sovereign Debt CDS Index 64.79 -.32%

• Emerging Market CDS Index 387.82 +2.76%

• iBoxx Offshore RMB China Corporates High Yield Index 113.80 +.06%
• 2-Year Swap Spread 29.5 +1.0 basis point

• TED Spread 24.75 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -23.0 +1.75 basis points

Economic Gauges:

• 3-Month T-Bill Yield .02% +1.0 basis point

• Yield Curve 145.0 -3.0 basis points

• China Import Iron Ore Spot $63.44/Metric Tonne n/a

• Citi US Economic Surprise Index -45.60 +1.8 points
• Citi Eurozone Economic Surprise Index 50.1 -6.0 points

• Citi Emerging Markets Economic Surprise Index -10.70 +1.0 point

• 10-Year TIPS Spread 1.76 +1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating +3 open in Japan

• DAX Futures: Indicating -21 open in Germany

Portfolio: 

• Higher: On gains in my biotech/medical sector longs and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.35%

Sector Underperformers:

• 1) Steel -2.66% 2) Oil Tankers -2.07% 3) Gaming -1.93%

Stocks Falling on Unusual Volume:

• SLXP, CYBR, WBAI, CTB, DNOW, BCC, I, HURN, HSBC, DTLK, RCPT, NSP, DISH, SODA, ATRO, FEYE, ATLS, BA, COHU, CRTO, MHK, TSU, TSLA, ERF, VNDA, BCC and FUEL

Stocks With Unusual Put Option Activity:

• 1) VRX 2) BBY 3) ESRX 4) CRM 5) M

Stocks With Most Negative News Mentions:

• 1) RIG 2) NVDA 3) PCP 4) BA 5) WSM
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth -.03%

Sector Outperformers:

• 1) HMOs +2.26% 2) Biotech +1.09% 3) Drugs +.39%
  

Stocks Rising on Unusual Volume:

• PPO, HLSS, VRX, DGLY, TSEM, CLDX, GSM, DISCA, AWI, NSM, CSC, NRZ, HUM, KITE and XON

Stocks With Unusual Call Option Activity:

• 1) SLXP 2) ANGI 3) AFL 4) AMAT 5) CLDX
  

Stocks With Most Positive News Mentions:

• 1) LH 2) RTN 3) ITRI 4) VRX 5) CL
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg: 

• Kerry Warns of More Russia Sanctions as Ukraine Simmers. U.S. Secretary of State John Kerry warned that further sanctions may be imposed against Russia over the next few days if further breaches of a truce in Ukraine continue. “Some additional steps will be taken in response to the breaches of this cease-fire,” Kerry told reporters at the U.S. Embassy in London after talks Saturday with U.K. Foreign Secretary Philip Hammond. “There are some yet very serious sanctions that can be taken which have a profound, increased negative impact on the Russian economy.”  

• Putin’s Stealth Incursions Hinder NATO’s Ability to Strike Back. As the Kremlin’s warplanes probe the edges of NATO airspace, the alliance says its forces are ready if the Russians come. Political leaders will need a little longer to issue the marching orders. Whatever the scenario -- an overt Russian attack on eastern Europe, a proxy war fought by pro-Russian rebels, a Crimea-style infiltration -- the immediate suspicion will fall on Russian President Vladimir Putin as the man behind it. Who will order the North Atlantic Treaty Organization to strike back is less clear. The 28 governments in the U.S.-led alliance will all want a say, potentially slowing the deployment of a 5,000-man rapid-reaction force being set up to defend eastern Europe. 

• Greece's Tsipras Is on a High Wire. Greek Prime Minister Alexis Tsipras walks another high wire over the next 24 hours as he tries to come up with financial measures that satisfy both the demands of euro-region creditors and his anti-austerity party. After talks in Brussels between officials from the 19 euro members concluded late on Feb. 20 with an agreement to extend bailout funds for four months, the government in Athens now has until the end of Monday to complete a list of policies in return for the continued funding. Finance chiefs will then decide whether the proposals go far enough or trigger another round of emergency negotiations this week.

• The Real Battle Over Greece Still Lies Ahead. Greek Prime Minister Alexis Tsipras began the task of selling domestically a provisional deal with euro-area partners to extend bailout funds after securing a reprieve from the prospect of the country’s insolvency. “We won a battle, but not the war as the difficulties, the real difficulties, not only those related to the discussions and the relationship with our partners, are ahead of us,” Tsipras said in a televised speech on Saturday.   

• Yen at ‘Comfortable’ Level, BOJ Needn’t Act for Now: Abe Adviser. The yen has weakened to a “comfortable” level and the Bank of Japan can hold off expanding stimulus for now, given prospects for a recovery in the economy, said Etsuro Honda, an adviser to Prime Minister Shinzo Abe. It will take about six to eight months for the effects of the increase in monetary stimulus on Oct. 31 to filter through the economy, Honda said in an interview on Feb. 20. “So the BOJ can wait until at least around June to gauge the impact.”

• Asian Stocks Advance to Five-Month High After Greek Bailout Deal. Asian stocks rose, with the regional benchmark index heading for its highest close since September, after U.S. equity gauges climbed to records as Greece reached a provisional deal on its bailout program. The MSCI Asia Pacific Index added 0.1 percent to 145.21 as of 9:01 a.m. in Tokyo.

Wall Street Journal:

• Tsipras Can Expect More Humble Pie. Greek leader will have to give way on many more issues to secure a place in the eurozone. Greece’s membership in the eurozone looked less precarious by the end of last week than it did at the beginning—but it still hangs in the balance.

• U.S. Units of Deutsche Bank, Santander Expected to Fail Fed’s Stress Test. Shortcomings seen in how banks measure and predict potential losses and risks. Two large European banks, Deutsche Bank AG and Banco Santander SA, are expected to fail the Federal Reserve’s stress test over shortcomings in how they measure and predict potential losses and risks, according to people familiar with the matter.

• New Cancer Technology Gives Investors a Shot in the Arm. Immunotherapy’s promise is drawing some marquee financiers. George Soros, Michael Milken and David Bonderman are among marquee investors benefiting from early bets on a red-hot sector: young companies developing drugs that fight cancer by using the body’s immune system. 

• Carlyle Hedge-Fund Unit Has Big Outflow. Withdrawals follow losses due to investments in Fannie Mae, Freddie Mac. Investors have pulled about $2.5 billion since October from a hedge-fund firm owned by Carlyle Group LP after an outsize bet on mortgage giants Fannie Mae and Freddie Mac led to steep losses last year, people familiar with the matter said.

• Islamic State’s Global Ambitions. ISIS—no longer a regional problem—is executing a complex strategy across three geographic rings. Last week’s Pentagon briefing outlined plans for Iraqi and Kurdish forces to retake Mosul from Islamic State, also known as ISIS. This strategy largely assumes that if ISIS is expelled from Mosul, Iraq’s second largest city, pushed out of Anbar province and degraded in Syria, the organization will collapse because its narrative of victory will be tarnished and its legitimacy as a “Caliphate” will end.

Fox News:

• Al Shabaab calls for attack on Mall of America in new video. (video) A new video from Al Shabaab purportedly shows the terror group calling for an attack on Mall of America, in Bloomington, Minn. According to Fox 9, the mall is one of three similar targets the terror group specifically names, including West Edmonton Mall in Canada and the Oxford Street shopping area in London. The video purportedly shows 6 minutes of graphic images and the terrorists celebrating the 2013 Westgate Mall attack in Nairobi, Kenya, that killed more than 60 people.

CNBC:

• Doctors on demand: Affordable and getting more popular. (video)

Zero Hedge:

• What Ordinary Greeks Think Of Friday's Deal: "We Went Through Two Months Of Agony To Realize We Are Still A Debt Colony".

• Germany Gives Greece Just Enough Rope: Varoufakis Says If Troika Rejects Reforms "The Deal Is Dead And Buried".

• The "War On Terror" Turns Inward – DHS Report Warns Of Right Wing Terror Threat.

• Why European Bondholders Refuse To Sell To The ECB.

• Are You Ready For Total Currency War?

• The Signals Are Clear. (graph)

• The Lack Of Volume Is Deafening. (graph)

• How Greece Folded To Germany: The Complete Breakdown.

• 5 Things To Ponder: Salmagundi Introspections. (graph)

• Moody's "Junks" Russia, Expects Deep Recession In 2015.

• "Holy Grail Of Trading" Crosses Into The Twilight Zone: HFT Firm Virtu Has Lost Money Once In 1,485 Trading Days.

• There's No Way Out Now: "That Choice Was Yours". Inevitably this all time high market overvaluation will blow up the same as last time despite the pundits laughing at such predictions. But do remember the choice was yours.  You will have nobody to blame but yourself when and if it all comes tumbling down and you were too busy laughing.

• Tesla(TSLA): Bonfire Of The Money Printers' Vanities. 

• Peace? Ukraine "Preparing For Full-Scale War" With Russia, Demands The West Supply Lethal Weapons.

• "The Smart Money Is Selling, Not Buying" Goldman(GS) Warns With Valuations In The "99th Percentile".

• Citi Warns Of "Dancing", "Music" And "Complicated Things" For The Second Time.

• Greece: The Facts Remain In A Game Of Theories.

• Jeb Bush Believes Unconstitutional NSA Spying Is "Hugely Important".

• Subprime Car Loan Bubble 2.0 Full Frontal.

• What's Next For Greece, The Euro, And Markets?

• Commercial Traders Are The Most Long 30Y Treasuries In A Year. (graph)

• After Spike In Earthquake Activity , New Fukushima Leak Sees 70x Increase In Radiation.

• The "Liquidity Glut" Springs Eternal: Global Central Bank Easing Quadruples In 2015.

• Oil's "Surprise" Collapse: It's The Demand, Stupid. (graph)

• The Ultimate "Easy Money Paradox": How The ECB's Previous Actions Are Assuring The Failure Of Its Current Actions.

• Trickle-Down QE.

• This Won't End Well. (graph)

Business Insider:

• Duke Energy(DUK) fined over $100 million for environmental violations.

• Reusable medical devices known to spread 'superbugs' will come with new instructions.

• Russian paper Kommersant: It was Russian soldiers who captured a key railway hub from Ukraine's army.

• The internet is about to get faster — here's why.

• OPEC may have a long, costly battle on its hands.

• The White House is in a grudge match with Israel.

• This is what $11.83 trillion worth of household debt looks like. (graph)

• Snapchat and the 'T-Rex' venture: It all sounds like dotcom bubble 2.0.

• Global profits have started to fall.

• Greece's financial mess is far from over.

• For months I've been worried about stock prices — now I'm putting (some) money where my mouth is!

• Valeant(VRX) acquires drugmaker Salix(SLXP) for $14.5 billion.

• The oil price: The Saudi project, part two.

• The largest US refinery strike in 35 years is killing one fifth of the country's production capacity.

Financial Times:

• Shanghai exchange to open doors to foreign short sellers.  Foreign investors will be able to short Chinese shares next month for the first time under the Shanghai-Hong Kong Stock Connect programme, in the latest move by China’s regulators to open up the country’s stock market.

Telegraph: 

• How the eurozone could tear apart. A standoff between Greece and its creditors nearly ended in the breakup of the euro project. How could a country leave the currency union? 

• An orderly Greek exit is the only option for Europe. The eurozone will generate spiralling financial instability until it finally implodes or is deliberately dismantled.

Die Zeit:

• ECB QE Creates Moral Hazard, Deutsche Bank's Jain Says. ECB bond buying won't have same success as in U.S. as creates moral hazard in Europe by reducing need for govt reform, Deutsche Co-Chief Executive Officer Anshu Jain said in an interview.

Bild: 

• Germany's Steinmeier Warns Russia of Ukraine Escalation. Russia needs to continue pressure on rebels to end military action, citing interview with German Foreign Minister Fran-Walter Steinmeier. Rebel advance to Mariupol would cross "red line" and mean end of Minsk accord.

Night Trading

• Asian indices are unch. to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.5 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 65.0 -.25 basis point.

• S&P 500 futures -.03%.

• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DISH)/.43

• (CTB)/.64

• (AXL)/.54

• (ESRX)/1.38

• (THC)/1.19

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for January is estimated to rise to .05 versus -.05 in December.
  

10:00 am EST

• Existing Home Sales for January are estimated to fall to 4.95M versus 5.04M in December.

10:30 am EST

• Dallas Fed Manufacturing Activity for February is estimated to rise to -4.0 versus -4.4 in January.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The BOJ Minutes, German IFO Business Climate Index and the Credit Suisse Energy Summit could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial 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 50% net long heading into the week.