Bear Radar

Style Underperformer:

• Large-Cap Value -1.0%

Sector Underperformers:

• 1) Oil Service -2.3% 2) Retail -2.2% 3) Restaurants -2.0%

Stocks Falling on Unusual Volume: 

• SMG, MET, PE, PII, IDTI, HOG, GPOR, GGG, QCP, VMW, CI, MXIM, GLW, DVMT, WERN, ANTM, ESRX, PCAR, RMBS, PFG, IDTI and MNRO

Stocks With Unusual Put Option Activity:

• 1) SIRI 2) SLCA 3) MET 4) HCA 5) TJX

Stocks With Most Negative News Mentions:

• 1) PE 2) MET 3) CHK 4) IRBT 5) MET

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth -.8%

Sector Outperformers:

• 1) Networking -.1% 2) Airlines -.1% 3) Internet -.5%

Stocks Rising on Unusual Volume:

• CALD, TRI, CBAY, EXTR, PMT, ALV, GNBC, RCKT, ASH, WYNN, IMMR, AKAO, QRVO, DPS, AMBA, TUSK, BC, IOVA, TWTR, HCA, ENVA, AXE, MNTA, ACBI, AQ, MNTA, ORIT, PMT, QRVO and HUBB

Stocks With Unusual Call Option Activity:

• 1) HCA 2) FLEX 3) DHR 4) MAS 5) XME

Stocks With Most Positive News Mentions:

• 1) HA 2) TWTR 3) PATK 4) EXC 5) D

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +30.8% Above 100-Day Average
• 2 Sectors Rising, 8 Sectors Declining
• 20.5% of Issues Advancing, 77.5% Declining
• 35 New 52-Week Highs, 215 New Lows
• 66.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
• Vix 14.3 +3.2%
• Total Put/Call .83 +15.3%
• TRIN/Arms 1.72 +152.5%

Tuesday Watch

Evening Headlines

Bloomberg:

• China's Risk Crackdown Is Giving Giant Bank Stocks a Big Boost. China’s top banks -- the biggest in the world -- traded below the value of their assets on concern over rising bad debt and falling profitability. That’s starting to change, and quickly.

• Asian Junk Bond Deluge Spurs Concerns About Investor Protection.

• Japan Boosts M&A War Chest With Record Bond Sales Abroad.

• U.K. Consumer Confidence Increases.

• Japan Consumer Spending Softens, Labor Market Remains Tight. (video)

• Asia Stocks Follow U.S. Drop as Bond Slump Extends. (video) Stocks in Japan, South Korea, Hong Kong and Australia retreated after the S&P 500 Index declined from a record high. Treasuries extended a drop that’s taken yields to the highest since early 2014 as traders gear up for a hectic week of economic data and the last Federal Reserve policy decision with Janet Yellen at the helm. German five-year bond yields broke above zero percent for the first time since December 2015 after a policymaker said there isn’t a single reason anymore to continue with quantitative easing. Japan’s Topix index lost 0.7 percent as of 10:37 a.m. in Tokyo. South Korea’s Kospi index fell 0.3 percent and Australia’s S&P/ASX 200 Index retreated 0.5 percent. Hong Kong’s Hang Seng Index dropped 0.4 percent. Futures on the S&P 500 Index were little changed after its 0.7 percent slide Monday, when the VIX index soared 25 percent. The MSCI All-Country World Index sank 0.6 percent Monday, the most since August. 

• Five Things You Need to Know to Start Your Day. (video)

• Bullish Dilemma for Equity Analysts.

Wall Street Journal:

• Global Bonds Swoon as Investors Bet on Inflation, Growth. Government debt fell around the world amid signs of economic expansion and declining central bank support.

• With Stocks Surging, Americans Are Saving at 12-Year Low. Shift away from saving could leave consumers exposed if stocks or other assets take a sudden turn for the worse.

• Cleaning Up Comey’s FBI. Director Wray needs to restore the bureau’s fallen reputation.

• Wal-Mart(WMT) Tightens Delivery Windows for Suppliers. Large suppliers will soon need to meet one- or two-day windows 85% of the time, or be fined, executive says.

• U.S. to Resume Admitting Refugees From 11 Countries. Admissions from those nations deemed security risks will involve more vetting.

MarketWatch.com

• 13 stocks these winning stockpickers recommend now.

• Bitcoin prices slide as Japan cracks down on Coincheck after hack.

• Blame bitcoin’s crash on these sharp new players.

Fox News:

• FBI's McCabe, now stepping down, suspected in leak against White House. (video)

CNBC:

• Japanese chipmaker Renesas is in talks to acquire Maxim(MXIM); Renesas denies the talks. (video)

• Stocks making the biggest moves after hours: Metlife, Revlon & more.

• A key Tesla(TSLA) engineer who helped design batteries has left the company.

• Here's why Democrats face a tough Senate campaign this year.

• Exxon Mobil(XOM) announces $35 billion in new US investments over 5 years, citing tax reform. (video)

• Facebook(FB) says its news feed changes will promote more local news.

• An economic indicator is signaling paychecks could get significantly bigger this year. (video)

• JP Morgan(JPM) says Jamie Dimon will continue to serve as CEO for five more years. (video)

• JPMorgan(JPM) raises oil price forecast to $70, topping many Wall Street targets, citing strong demand. (video)

Zero Hedge:

• House Intel Votes To Make "Shocking" FISA Memo Public.

• Is Texas Set For Another Oil Boom?

• "Financing A War" With Whom? Balance Sheet Expansion Reaches Unchartered Territory. (graph)

• Canada Risks Popping Marijuana Bubble As Prices Dive Before Legalization.

• 'Golden Boy' Robert Mueller's Forgotten Surveillance Crime Spree.

• Kunstler: "The 'Resistance' Is Dragging The Country Into Dangerous Madness".

• FBI Texts Discuss "Destroying Evidence", Scramble To Find Hard Drives: Report.

• These Are The 6 Traders Who Were Just Arrested For Manipulating The Gold Market.

• Bond Bloodbath Sparks Biggest Stock Drop Since September. (graph)

Business Insider:

• A crypto startup that vanished and changed its website to the word ‘penis’ allegedly stole the identities of its team.

• We went to Victoria's Secret to see the risque photos in stores that moms of teenage girls are freaking out about — here's what we found.

Telegraph:

• Blockchain boom could quickly turn to bust.

Night Trading 

• Asian equity indices are -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 63.5 unch. 

• Asia Pacific Sovereign CDS Index 10.75 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 76.06 -.12%.

• S&P 500 futures +.04%.

• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AET)/1.17

• (AKS)/-.13

• (ALV)/1.76

• (EAT)/.71

• (GLW)/.47

• (DHR)/1.16

• (HOG)/.45

• (HCA)/1.87

• (MCD)/1.59

• (NUE)/.55

• (PCAR)/1.12

• (PFE)/.56

• (PII)/1.47

• (PHM)/.85

• (SAP)/1.55

• (SMG)/-.93

• (ZBH)/2.10

• (AMD)/.05

• (BXP)/1.46

• (CA)/.59

• (CB)/2.30

• (EA)/2.20

• (ILMN)/1.21

• (JNPR)/.52

• (RHI)/.63

• (SYK)/1.95

Economic Releases

9:00 am EST

• The S&P CoreLogic CS 20-City MoM for November is estimated to rise +.6% versus a +.7% gain in October.

10:00 am EST

• The Conference Board Consumer Confidence Index for January is estimated to rise to 123.0 versus 122.1 in December.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The President's SOTU address, President's infrastructure plan release, Q4 Eurozone GDP report, weekly US retail sales reports and the FCC open meeting could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by energy and consumer shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on Profit-Taking, Rising Long-Term Rates, Oil Decline, Homebuilding/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.1 +17.9%

• Euro/Yen Carry Return Index 140.57 -.08%

• Emerging Markets Currency Volatility(VXY) 8.29 +.97%

• S&P 500 Implied Correlation 32.39 -3.14%

• ISE Sentiment Index 90.0 -30.2%
  

• Total Put/Call .71 -10.13%

• NYSE Arms .61 +23.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 45.82 +.56%
  

• America Energy Sector High-Yield CDS Index 294.0 +.15%

• European Financial Sector CDS Index 41.20 -.05%

• Italian/German 10Y Yld Spread 133.25 -4.5 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.66 -.42%

• Emerging Market CDS Index 115.80 +2.15%
  

• iBoxx Offshore RMB China Corporate High Yield Index 146.53 +.06%

• 2-Year Swap Spread 19.50 +1.0 basis point

• TED Spread 35.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -29.0 -2.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 76.18 -.39%
• 3-Month T-Bill Yield 1.40% -1.0 basis point
  

• Yield Curve 57.75 +3.75 basis points

• China Iron Ore Spot 73.50 USD/Metric Tonne +1.18%

• Citi US Economic Surprise Index 35.50 -2.0 points

• Citi Eurozone Economic Surprise Index 55.40 -1.0 basis point

• Citi Emerging Markets Economic Surprise Index 1.5 +1.0 basis point

• 10-Year TIPS Spread 2.09 unch.
  
• 88.8% chance of Fed rate hike at March 21 meeting, 89.3% chance at May 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -39 open in Japan 
• China A50 Futures: Indicating -61 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long