Bull Radar

Style Outperformer:

• Large-Cap Growth -.8%

Sector Outperformers:

• 1) Gold & Silver +.7% 2) Steel -.1% 3) Tobacco -.5%

Stocks Rising on Unusual Volume:

• LIVE, KATE and ICPT

Stocks With Unusual Call Option Activity:

• 1) CMG 2) LMT 3) HUM 4) AGN 5) HPE

Stocks With Most Positive News Mentions:

• 1) MICT 2) OCRX 3) STZ 4) RAD 5) FBRC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -39.5% Below 100-Day Average
• 0 Sectors Rising, 10 Sectors Declining
• 30.2% of Issues Advancing, 65.8% Declining
• 67 New 52-Week Highs, 18 New Lows
• 53.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.2%
• Vix 12.4 +3.7%
• Total Put/Call .94 -7.8%
• TRIN/Arms .84 +37.5%

Wednesday Watch

Evening Headlines

Bloomberg:

• Japan November Industrial Output Rises Most in Five Months. Japan’s industrial output rose the most in five months in November as export volumes rebounded sharply, pointing to an expected economic expansion in the fourth quarter.
• Japan Back in Deflation Doesn't Mean All Prices Fall. Shinzo Abe and Haruhiko Kuroda promised to drag Japan out of decades of deflation in 2013. That hasn't happened yet, with core inflation dropping in November for a ninth month.
• Japan, Australia Stocks Climb While Oil Retreats: Markets Wrap. The Topix index was little changed as about 10 percent of the companies in the benchmark measure traded without the right to receive the next dividend. Australia’s benchmark rose the most in three weeks after being closed for holidays on Monday and Tuesday.

Fox News:

• Blue Lives Lost: Dramatic rise in police officers gunned down in line of duty in 2016.

CNBC: 

• Investors should take a pause as Dow inches toward 20K, experts say. (video)

Zero Hedge: 

• Is The "Deplorable Economy" Flashing Warning Signs About Overall Economic Growth Prospects? (graph)
• Obama Set To Announce Economic Sanctions And "Covert Cyber Ops" Against Russia For "Election Hacking".
• The New Normal 'Safety Net': Surging Disability Benefits Claims. (graph)
• US Government Can Legally Access Your Facebook(FB) Data (And Now We Know How).
• Here's Who Democrats Say Are The Top 15 Presidential Candidates For 2020.
• Dow 20k Disappoints For 10th Day Despite Market Optimism Surging Most Since Dot-Com Peak. (graph)

Business Insider:

• The job market is still 'terrible' for many Americans.
• Manufacturing is taking a beating in Canada.

Night Trading 

• Asian equity indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 113.25 -1.75 basis points.
• Asia Pacific Sovereign CDS Index 37.25 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 69.63 +.02%. 
• S&P 500 futures +.11%. 
• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases
10:00 am EST

• Pending Home Sales MoM for November are estimated to rise +.5% versus a +.1% gain in October. 

Upcoming Splits 

• None of note

Other Potential Market Movers

• The UK mortgage approvals report and the $34B 5Y T-Note auction 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 modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Modestly Higher into Final Hour on US Economic Optimism, Oil Gain, Short-Covering, Metals & Mining/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 11.90 +4.0%

• Euro/Yen Carry Return Index 128.28 +.31%

• Emerging Markets Currency Volatility(VXY) 11.36 -.70%

• S&P 500 Implied Correlation 48.01 -2.42%

• ISE Sentiment Index 53.0 -48.54%
  

• Total Put/Call 1.06 +23.26%

• NYSE Arms .70 -16.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.33 -.88%
  

• America Energy Sector High-Yield CDS Index 454.0 +.79%

• European Financial Sector CDS Index 91.53 +.19%

• Western Europe Sovereign Debt CDS Index 20.53 +.79%

• Asia Pacific Sovereign Debt CDS Index 37.32 +.59%

• Emerging Market CDS Index 243.86 -.49%
  

• iBoxx Offshore RMB China Corporate High Yield Index 132.94 -.26%

• 2-Year Swap Spread 28.25 -1.75 basis points

• TED Spread 46.0 -3.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -66.25 -4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.61 -.05%
• 3-Month T-Bill Yield .51% unch.

• Yield Curve 133.0 -1.0 basis point
  

• China Import Iron Ore Spot $79.42/Metric Tonne +1.64%

• Citi US Economic Surprise Index 24.50 -1.1 points

• Citi Eurozone Economic Surprise Index 46.0 -8.5 basis points

• Citi Emerging Markets Economic Surprise Index 10.40 +.5 point

• 10-Year TIPS Spread 2.01% +1.0 basis point
• 33.3% chance of Fed rate hike at March 15 meeting, 43.7% chance at May 3 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +47 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating +1 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech/retail sector longs 

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• How Will China React to Trump's Trade Policies? (video)
• Americans’ Market Sentiment Jumps Most Since Dot-com Boom: Chart.

Wall Street Journal:

• Donald Trump’s Cabinet Picks Disagree With President-Elect on Some Key Issues. Divergent views on deficit, trade, climate change and foreign policy pose challenge for the incoming administration.
• Bankruptcy Becomes an Option for Some Borrowers Burdened by Student Loans. An argument that focuses on the legal definition of a student loan is at the crux of efforts to discharge the debt.
• Obama’s Parting Betrayal of Israel. Trump must ensure there are consequences for supporting U.N. Security Council Resolution 2334.

Fox News:

• Carrie Fisher, best known as Princess Leia in Star Wars, dead at 60. (video)

CNBC:

• Trump wants to spend $1 trillion on infrastructure. Here's how he can get a better deal.
• US accuses Chinese citizens of hacking law firms for insider trading.

Zero Hedge:

• Post-Christmas Chaos Strikes America's Malls: SWAT, Gunfire, & Mass Brawls From Texas To New Jersey.
• 2016 Stock Surprises, Sentiment Swings, & Sector Surges (In 1 Simple Chart).
• ECB Lowers Deutsche Bank's Capital Requirements, Allowing It To Pay Bonuses.
• Chinese Interbank Funding Freezes Again As Overnight Repo Hits 33%. (graph)
• Guess Which Billionaire (From Omaha) Made More Money Than Anyone Else In The World Thanks To Trump.
• Consumer Confidence Jumps To Highest Since 2001 As "Trump Hope" Soars. (graph)
• Taiwan Warns Beijing Threat "Growing By The Day" As Chinese Carrier Conducts Drills.
• Barack Backhands Bibi.
• US Home Prices Hit A Record High In October - What Happens Next. (graph)

Business Insider:

• The Fed has given Trump cover to unwind a key Wall Street rule.
• GOLDMAN SACHS(GS): 4 key transitions we’re watching in 2017.
• These are Stratfor's chilling predictions for a tumultuous 2017.

The Telegraph:

• Why the crisis in Greece has no end in sight - and another summer of stress is on the way.
• From a US/Germany trade war to a tech collapse in China: Five black swans for 2017.

Bear Radar

Style Underperformer:

• Large-Cap Value +.1%

Sector Underperformers:

• 1) Gaming -.5% 2) Construction -.2% 3) Utilities -.1%

Stocks Falling on Unusual Volume: 

• SGEN, PTLA, SRG, EROS, AMPH, DQ, LE, RHT, NDRM, IEP, NBIX, CCRC, RLI, RBA, OMAB, POL, AVXS, ACAD, TLND and WTW

Stocks With Unusual Put Option Activity:

• 1) HLT 2) LOW 3) REGN 4) NVDA 5) WMT

Stocks With Most Negative News Mentions:

• 1) ALR 2) ALXN 3) ALN 4) AVXS 5) ARWR

Charts:

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