- NYSE volume 463M shares, flat to its one-month average

- Nasdaq volume 3.82B shares, 15% below its one-month average

Breadth

Nasdaq 100 Heat Map

Thanks for reading my Diary today.

Enjoy the evening.

Be safe.

As I do at times, one of our staff has conducted a survey of market sentiment on CNBC.

In the last few days a total of 37 guests/panelists have offered a market view.

Only one was bearish, 36 were bullish.

Meanwhile, a large seller in S&P futures just hit the market.

AVGO (intraday) since its March 6th EPS Release

Prices on private equity shorts today:

* APO $110.69

* BX$125.93

* KKR $99.53

I expanded my short exposure today.

I added to private equity shorts just now... but still short-sized.

Short APO (S), KKR (S), BX (S)

Breadth

Nasdaq 100 Heat Map

S&P 500 Sectors

I added to regional bank PGC this morning.

Once again the bond market is reversing from price gains, and bond yield declines, to price losses, and bond yield increases.

In fact yields we are at the day's highs:

* The 2 year US Note yield is +2 bps to 4.62%.

* The 10 year US note yield is +4 bps to 4.192%.

* The long bond yield is +5 bps to 4.354%.

Never ever forget history's lessons.

Specifically, when in July 2007 Citigroup's Chuck Prince said the bank was committed to leveraged buyout deals despite fears of reduced liquidity from the sub-prime fall out...

" As long as the music is playing, you've got to get up and dance."

Momentum can be a double-edged sword.

The gods give, like twin flowers, power and ruin, memory and oblivion.

Curaleaf CURLF  and Green Thumb GTBIF go on my Best Ideas List, joining MSOS which is already there.

VP Harris gathers Fat Joe and people pardoned for marijuana convictions to discuss reforms.

On the rally off of the lows, I am shorting more Index calls.

Added to MSOS, CURLF and GTBIF today.

I have taken the profit in my short Index common positions:

* SPY at $515.86

* QQQ at $439.98

I remain short Index calls, which I added to on the opening.

McDonald's MCD, one of my investment shorts, is about -$6.50/share lower based on managements comments about sluggish international sales.

MCD takes out support:

Upside

-SKIN +21% (earnings, guidance)

-TNON +21% (earnings)

-ARQ +14% (earnings, guidance)

-EDUC +14% (announces sale, leaseback agreement of HQ and warehouse facility)

-VERI +14% (earnings, guidance)

-BNED +13% (earnings)

-HRTX+13% (earnings, guidance)

-TH +13% (earnings, guidance)

-CYBN +12% (receives FDA Breakthrough Therapy Designation for its Novel Psychedelic Molecule CYB003 and announces positive 4-month durability data in Major Depressive Disorder; places 349M shares at $0.43/shr in oversubscribed $150M private placement)

-BGNE +11% (first doses of BRUKINSA provided to patients with Chronic Lymphocytic Leukemia in low- and middle-income countries under collaboration of The Max Foundation, BeiGene, and the BeiGene Foundation)

-SIGA +11% (earnings)

-YMM +11% (extends $300M share repurchase program and declares $0.0072/shr cash dividend)

-WOOF +9.4% (earnings, guidance; appoints new CEO)

-ICAD +8.7% (earnings)

-CLOV +8.3% (earnings, guidance)

-CLPT +5.8% (earnings, guidance)

-MGIC +5.7% (earnings, guidance)

-SBOW +5.2% (Kimmeridge makes $34.00/shr offer for SilverBow and inject $500M of fresh equity capital)

-INAB +3.9% (Boutique Firm Initiates INAB with Buy, price target: $5)

-PFMT +3.0% (earnings, guidance)

-BIDU +2.7% (China Premier Li said to have visited Baidu office in Beijing; learned about Baidu's AI development)

-PESI +2.1% (earnings)

Downside

-VJET -50% (accelerates Strategic Realignment and Announces its Plan to (i) Voluntarily Delist its ADSs from NASDAQ and (ii) Deregister its ADSs)

-LUNA -23% (files to delay 10-K annual report)

-SURG -23% (earnings)

-AIRE -16% (earnings)

-SWIM -16% (earnings, guidance)

-BIRD -13% (earnings, guidance)

-CYRX -9.5% (earnings, guidance)

-DLTR -7.3% (earnings, guidance)

-VWE -7.2% (earnings)

-ODD -5.7% (files to offer 4M Class A common shares by LCGP3 Pro Makeup, L.P)

-TACT -5.7% (earnings, guidance)

-LDI -5.5% (earnings, guidance)

-AWRE-5.0% (earnings)

-ARCO -4.9% (earnings)



-PRPL -4.9% (earnings, guidance)

-WOOF -4.3% (earnings, guidance)

-GEHC -4.2% (upsizes secondary offer to 14M)

-PHUN -3.7% (earnings)

-RXT -3.6% (earnings, guidance; announces refinancing transactions, reducing debt; to receive $275M of new money to advance key strategic initiatives)

-TSLA -2.1% (Wells Fargo Cuts TSLA to Underweight from Equal Weight; price target: $125 from $200)

From Peter:

After 15 years of one huge cheap money party, the economics of the private equity business is just not the same in terms of rates of returns and the flow of deals, both purchases and sales. If you didn't see, in yesterday's Financial Times there was an article titled "Buyout Groups Left With Record Unsold Assets as Deals Decline." 

The article said, "Private equity groups globally are sitting on a record 28,000 unsold companies worth more than $3T, as a slowdown in deal making creates a crunch for investors looking to sell assets. The numbers, revealed in consultancy firm Bain & Co's annual private equity report, show how rapidly the industry has grown, as well as the challenges it faces from higher interest rates that have increased financing costs."

And in the face of this and in the need/desire for liquidity, "This has prompted the industry to use alternative money raising tactics, including so called net asset value financing - loans secured against typically highly indebted portfolio companies - and transferring companies to new internal funds. This can allow in new investors while others exit."

Bottom line, private equity is just a levered long and now that the cost of capital is higher, and possibly for longer, their economics have changed as well.

So in determining whether to raise rates next week or in April, the BoJ is waiting to hear the results of the 'shunto' wage negotiations that are currently taking place. They are beginning to come in and it seems that the BoJ has every reason to hike next week.

In a Bloomberg News story, "A wide range of unions are poised to release results from negotiations, with the Japanese Association of Metal, Machinery and Manufacturing Workers saying Wednesday that 60 affiliated unions secured an average pay increase of 5.32%, exceeding last year's tally by a large margin. Toyota Motor, an industry bellwether, said it agreed to its union's pay demands in full." 

We'll hear more results in the coming days. There wasn't much of a market response as at this point it is just a timing thing on the end of NIRP and we all know it but what's been heard so far, the BoJ is getting what they want. The 10 yr JGB yield was unchanged and the yen is down a touch while the Nikkei was trimmed by .26%.

Shifting to retail, here is what Kohl's said in their earnings call about their negative 4.3% sales comp:

"The holiday period started off mixed with November being the weakest month in the quarter, due in part to warmer weather. December comp sales were flat to last year and January sales were down as we lapped elevated clearance activity from the prior year. However, January was better than our plan. Another positive was that we drove increased regular price sales in December and January through the delivery of transitional goods." Their Sephora business seems to be doing well for them in particular.

"We continue to approach our guidance outlook prudently, recognizing the macroeconomic environment remains uncertain." They expect full year comps to be flat to up 2%.

"Our ticket has been relatively flat to up...It's really been around our traffic that's been down, and that's been pretty consistent. So, a lot of the initiatives that we're focused on is how we can drive that discovery so they want to come in and see newness."

Dollar Tree (really Dollar and a quarter Tree) missed both top and bottom lines and the stock is down pre market but did say they saw a 4.6% increase in traffic but "partially offset by a 1.5% decline in average ticket."

"While we expect current shrink and mix levels to be a headwind in the first half of the year, we are expecting to benefit from favorable freight rates and moderating headwinds from reduced SNAP benefits throughout the year."

Overseas, the UK economy did grow by .2% m/o/m as expected in January (yes, they now do this monthly, in addition to quarterly) with spending on services leading the way. Also out of Europe was a very soft industrial production figure for January that fell 3.2% m/o/m, almost double the expected drop of 1.8% and December was revised down by 100 bps.

Hearing from ECB members after last week's meeting, many seem to be leaning to a June rate cut. Notwithstanding this, the euro is hanging out near a 2 month high. The dovish French central banker Francois Villeroy said yesterday "We will probably cut rates in spring, and spring in Europe is from April to June 21. It's perhaps more probable in June - we are very pragmatic and will see depending on the data." We know Europe is not seeing economic growth so the doves can't wait to cut rates.

Back to the US, the drop in mortgage rates back under 7% led to a 7.1% w/o/w rise in mortgage applications. Purchases were up by 4.7% and refi's by 12.2%, which still are mostly cash outs. Nothing new to add but the tricky debate with the housing market is what will help from here.

Mr. Softee is +$3 in premarket after Cleveland Research is saying the business is tracking well.

zzzzz...

* WOOF is still a dog with fleas...

After lackluster results, Petco's CEO is stepping down.

From "Early Morning with Dave":

Call it the new math. In fact, when we determine what the normalized forward P/E multiple is when Treasury yields are between 4.0% and 4.5%, it comes out to be 16x, which means that for the S&P 500 to make any sense here from a value standpoint, we would need to see 2024 EPS at $322 instead of the current consensus of ~$242 (or +45% YoY growth compared to the actual +11% consensus right now). This is how far this bubble has gone. The market is basically priced for earnings growth that has only happened 3% of the time in the past — and a pace that generally is saved for an economy shifting out of a recessionary state. In one word or less — crazy.

* The market defied my logic yesterday in the face of a hot inflation print

* Futures are indecisive overnight

* We continue in an overbought condition with the S&P Short-Range Oscillator at 3.27% vs. 3.26%

* Yields are modestly higher this morning, but the intraday reversal to higher yields, surprisingly, was met by higher equity prices (for the second day in a row), and crude oil prices are higher (+$1.04) -- gold is unchanged and Bitcoin continues to rip higher (+$1,800)

* The U.S. dollar is stronger against the yen.

* Wednesday's Blues, courtesy of Joe Newman 

"Workin' on our night moves Trying to lose the awkward teenage blues Workin' on our night moves In the summertime And oh the wonder Felt the lightning And we waited on the thunder Waited on the thunder."

- Bob Seger, "Night Moves"

This daily Futures feature is like inside baseball. I try to show you and write about what I believe thoughtful hedge fund managers are looking at when they awake -- let's call it our normal routine -- setting the stage for their strategy for the day. The market is a complicated mosaic and the more info you have, the better trader and investor you will be!

The market (and money) never sleeps -- and neither do I, it appears! I have previously described the importance that overnight futures trading hold for me here. It is a guidepost to my strategy in the regular trading session. Moreover, the overnight/early morning futures hold opportunities as they are (1) inefficient, though liquid and (2) it seems fear and greed are often exaggerated outside the regular trading session. I frequently try to capture those efficiencies by trading actively both in the pre- and after-market sessions.

Here are brief observations I wanted to highlight and provide a summary of overnight price movements in various asset classes:

* Stock futures have been mixed overnight. S&P futures peaked at +6 and bottomed at -5. Nasdaq futures peaked at +30 and bottomed at -39. At 6:44 a.m. ET, S&P futures were +2 and Nasdaq futures at -14.

* Commodities are mixed with Brent crude +$1.14 at $83.06.

* The S&P Short-Range Oscillator is more overbought at 3.27% vs. 3.26%

* The VIX is slightly lower at 13.87 (+0.10).

* The U.S. dollar is stronger against the yen and flat compared to the pound and euro.

* Treasury yields are mixed to higher. The 2-Year Treasury yield is +1 basis point at 4.607% and the 10-Year is +1 basis point to 4.161%. Over there, the yield on the 10-Year U.K. Gilt bond is +2 basis points.

* Overnight, the inversion of the 2s/10s Treasuries curve is flat at -44 basis points. Real rates remain quite elevated; the 10-year is still about 1.85, again in real terms.

* Gold is +$1.20 and sits at $2,167.

* Bitcoin is +$1,900 to $73.3K.

Here is a synopsis of some of my columns I believe were important, or in the event you were out for the day and/or did not read my Diary. The principal intent is to review the logic of my market moves and other factors:

Why I Am Buying Cannabis Weakness

Market Volatility Provides Opportunity 

Here are Tuesday's trades. I believe in my Diary's full disclosure and transparency of trades/investments -- this is not CNBC! How else can you evaluate the value of my actions without memorializing them?:

* I initiated long positions in Green Thumb Industries GTBIF and Curaleaf CURLF

* Added to Grand Canyon Education LOPE short

* Shorted more SPY and QQQ calls

Added to:

* SPY short $517.22

* QQQ short $443.99

Short SPY common (M) and calls (S), QQQ common (M) and calls (S)

Markets are ignoring this - as price momentum rules the investing world:

This table is a valuable resource for momentum-based short term traders:

From JP Morgan:

Futs are flat with small-caps poised to outperform as the market continues to digest CPI. NVDA/Semis are higher pre-mkt while the balance of the Mag7 are mostly lower. Bond yields are higher in the front-end of the curve and USD is stronger pre-mkt. Cmdtys are higher across all 3 complexes with Energy outperforming. Today’s macro focus will be on consumer-related earnings, the 30Y bond auction, and mortgage applications. MTD, XHB is outperforming SPX by 60bps a number that increases to 364bps over the last month where we have seen a rotation also push RTY outperformance to SPX by 68bps.

and...

EQUITY AND MACRO NARRATIVE: The CPI print yielded few conclusions about the Fed’s pathway but does feel like the near-term move for bond yields is higher, given the likelihood of a strong Retail Sales number. Bond auctions may also be supporting yields as we saw in yesterday’s 10Y auction that bonds sold off into the print and still required a concession to digest. The hotter CPI print and the move higher in yields pushed investors back into the Tech/Semis trade ahead of a slew of catalysts. The balance of the note contains a CPI post-mortem, including commentary from Consumer Analysts Chris Horvers and Matt Boss, plus color on Industrials from our sector specialist Paige Hanson, given our conference kicked off yesterday.

AI CATALYSTS – (i) ADBE earnings (Thurs 3/14 AMC); (ii) NVDA CEO keynote at the GTC conf. (Mon 3/18 at 4pm ET); (iii) NVDA GTC Financial Analyst Q&A (Tues 3/19 at 11.30am ET); (iv) AVGO’s AI analyst meeting (Wed 3/20); (v) MU earnings (Wed 3/20 AMC) (vi) ADBE analyst meeting (Tues 3/26); and (vii) Google Cloud Next conf. (4/9-11).

And it's gone. 

I have reshorted SPY and QQQ common last night and early this morning:

* SPY $516.91

* QQQ $443.54

Wells Fargo downgrades Tesla TSLA to underweight.