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Monday, July 16, 2018

Market Alert - The Close

DJ30 led the market thanks to JPM riding the BAC earnings coattails, but it was hardly a major Dow move.

SP500 -2.86, -0.10%
NASDAQ -20.26, -0.26%
DJ30 44.95, 0.18%
SP400 -0.55%
RUTX -0.56%
SOX -0.12%
NASDAQ 100 -0.24%

I suppose investors and traders were concerned about the President's 'treason' as former CIA director Brennan (he strikes me as a lonely, angry man -- am I alone on that?) called Trump's press conference with Russia's Putin. Didn't know you could do that in a press conference, but then again, I am not ex-CIA. Or ex-KGB -- wanted to make sure that was clear.

Thus, another President purportedly unable to understand Putin, setting the US up for disaster. We will see. I recall Bush II saying he looked into Putin's eyes and saw his soul. He didn't say if it was roses or a garbage scow, but he acted as if they had an understanding. That worked out well. Not. Obama had his infamous caught on tape exchange with the then Russian president saying to tell Vladimir he would have more latitude after the election. Looks like more of the same, trying to be chummy but as the old cold war saying goes, once KGB, always KGB.


Retail sales were solid but understandably backed off some from the strong May levels that were revised even stronger. Still solid enough, and as noted, understandably lighter.

Retail Sales, June: 0.5 vs 1.4 May (from 0.8%)
Ex-Autos, June: 0.4 vs 1.4% May (from 0.9%)


The indices hovered, more or less, around the flat line all session, unable to add much to the prior week's upside.

SP400 and RUTX both closed lower, still in the pullback after testing the prior all-time highs. No money moving back their way yet as both slid lower to test the 20 day EMA.

NASDAQ was off a bit after it too moved to a higher high. NFLX was up, down, then up ahead of earnings. All running in place because it missed top line, bottom line, and on subscribers (by about a million). It is down a cool 55ish points afterhours. That is not going to play well on NASDAQ tomorrow with such a big stock with such a miss. Not pleased about that as well as we are in it, looking for that one-day kind of earnings bounce. Wrong way, and big time.

SP500 lost some ground even as banks jumped on the BAC earnings. A breakout over resistance last week but unable to add anything to start this week.

DJ30 landed the lone gain on the back of JPM's 3.93% move that pushed it through the 50 day and 200 day SMA. The Dow itself is still mired well below its resistance, including the early June high. Up, but with CAT, JNJ, IP and others struggling, JPM could not do it all. The Dow continues to enjoy a few upside moves but mostly suffers through stocks not receiving any money.

SOX was off but just modestly. The majority of semiconductors, less some quite nice patterns, are struggling. They are working laterally over the 200 day SMA, in a mass of indecision.


As for NFLX' earnings, of course it is one of the markets horsemen, and it has stumbled. What does that mean for the others as well? Is there a relationship economically or was this just NFLX unable to match expectations in its business that continues to explode higher, just not as fast as expected this quarter.

If the big names supporting the market, FAANG, MSFT, software, and the like cannot keep supporting, and if the NYSE large caps continue their flounder imitations, unable to get money pushed their way, then the market uptrend is at significant risk.

Indeed, all of FAANG is off afterhours, starting the moment NFLX announced. NVDA is off 3 points (closed at 248). Software appears to be hanging in for now. If the biggest earners are flinching, the market in general feels it. Of course, AMZN is still to announce, but as noted, it is off as well, about 27-30 clicks.

Fed chair Powell is also on tap to address Congress this week, giving his semiannual state of monetary policy address. That likely won't throw any solace to the market as the Fed sees the economy as great and thus in need of more rate hikes. To be fair, it did note the yield curve in the last meeting minutes, but noting it and heeding it are not the same thing -- heck, Greenspan noted it and then explained it away JUST as many are doing this time saying the Europe is buying our bonds. Danger, danger, danger (as the late great Crocodile Hunter, Steve Irwin, would warn).

Thus, Tuesday could be about as rough on the market as Stage 9 over the cobbles was to the Tour de France participants. Heavyweight contenders crashed out completely, hit the cobbles hard but managed to continue, or flatted repeatedly right out of contention.

After a lower open Tuesday from some of the big names we will see 1) if any bids return, 2) if other leader areas are impacted negatively, e.g. software, 3) if other groups receive bids, e.g. banks as they did Monday. Depending upon the response, it will be time to pare positions for what could be a last half of summer slump while looking to move into areas that might get money pushed their way such as those banks.

Have a great evening!
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Market Alert - The Close

DJ30 led the market thanks to JPM riding the BAC earnings coattails, but it was hardly a major Dow move.

SP500 -2.86, -0.10%
NASDAQ -20.26, -0.26%
DJ30 44.95, 0.18%
SP400 -0.55%
RUTX -0.56%
SOX -0.12%
NASDAQ 100 -0.24%

I suppose investors and traders were concerned about the President's 'treason' as former CIA director Brennan (he strikes me as a lonely, angry man -- am I alone on that?) called Trump's press conference with Russia's Putin. Didn't know you could do that in a press conference, but then again, I am not ex-CIA. Or ex-KGB -- wanted to make sure that was clear.

Thus, another President purportedly unable to understand Putin, setting the US up for disaster. We will see. I recall Bush II saying he looked into Putin's eyes and saw his soul. He didn't say if it was roses or a garbage scow, but he acted as if they had an understanding. That worked out well. Not. Obama had his infamous caught on tape exchange with the then Russian president saying to tell Vladimir he would have more latitude after the election. Looks like more of the same, trying to be chummy but as the old cold war saying goes, once KGB, always KGB.


Retail sales were solid but understandably backed off some from the strong May levels that were revised even stronger. Still solid enough, and as noted, understandably lighter.

Retail Sales, June: 0.5 vs 1.4 May (from 0.8%)
Ex-Autos, June: 0.4 vs 1.4% May (from 0.9%)


The indices hovered, more or less, around the flat line all session, unable to add much to the prior week's upside.

SP400 and RUTX both closed lower, still in the pullback after testing the prior all-time highs. No money moving back their way yet as both slid lower to test the 20 day EMA.

NASDAQ was off a bit after it too moved to a higher high. NFLX was up, down, then up ahead of earnings. All running in place because it missed top line, bottom line, and on subscribers (by about a million). It is down a cool 55ish points afterhours. That is not going to play well on NASDAQ tomorrow with such a big stock with such a miss. Not pleased about that as well as we are in it, looking for that one-day kind of earnings bounce. Wrong way, and big time.

SP500 lost some ground even as banks jumped on the BAC earnings. A breakout over resistance last week but unable to add anything to start this week.

DJ30 landed the lone gain on the back of JPM's 3.93% move that pushed it through the 50 day and 200 day SMA. The Dow itself is still mired well below its resistance, including the early June high. Up, but with CAT, JNJ, IP and others struggling, JPM could not do it all. The Dow continues to enjoy a few upside moves but mostly suffers through stocks not receiving any money.

SOX was off but just modestly. The majority of semiconductors, less some quite nice patterns, are struggling. They are working laterally over the 200 day SMA, in a mass of indecision.


As for NFLX' earnings, of course it is one of the markets horsemen, and it has stumbled. What does that mean for the others as well? Is there a relationship economically or was this just NFLX unable to match expectations in its business that continues to explode higher, just not as fast as expected this quarter.

If the big names supporting the market, FAANG, MSFT, software, and the like cannot keep supporting, and if the NYSE large caps continue their flounder imitations, unable to get money pushed their way, then the market uptrend is at significant risk.

Indeed, all of FAANG is off afterhours, starting the moment NFLX announced. NVDA is off 3 points (closed at 248). Software appears to be hanging in for now. If the biggest earners are flinching, the market in general feels it. Of course, AMZN is still to announce, but as noted, it is off as well, about 27-30 clicks.

Fed chair Powell is also on tap to address Congress this week, giving his semiannual state of monetary policy address. That likely won't throw any solace to the market as the Fed sees the economy as great and thus in need of more rate hikes. To be fair, it did note the yield curve in the last meeting minutes, but noting it and heeding it are not the same thing -- heck, Greenspan noted it and then explained it away JUST as many are doing this time saying the Europe is buying our bonds. Danger, danger, danger (as the late great Crocodile Hunter, Steve Irwin, would warn).

Thus, Tuesday could be about as rough on the market as Stage 9 over the cobbles was to the Tour de France participants. Heavyweight contenders crashed out completely, hit the cobbles hard but managed to continue, or flatted repeatedly right out of contention.

After a lower open Tuesday from some of the big names we will see 1) if any bids return, 2) if other leader areas are impacted negatively, e.g. software, 3) if other groups receive bids, e.g. banks as they did Monday. Depending upon the response, it will be time to pare positions for what could be a last half of summer slump while looking to move into areas that might get money pushed their way such as those banks.

Have a great evening!
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

Alert Key
http://www.investmenthouse.com/alertkey.htm

PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.

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Market Alert - Pre-Market

Futures vs FV: SP -0.41; DJ +15.59; NASDAQ +4.68

Futures are well off the morning highs hit early session with the indices trading around the flat line similar to other markets around the globe. Chinese loan data was weak, stirring more fears the Chinese economy, already weak, is tailing further under the tariffs.


Retail Sales, June: 0.5% vs 0.5% exp vs 1.3% May (from 0.8%)

Ex-autos: 0.4% vs 0.3% exp vs 1.4% prior (from 0.9%)

After the big surge in May, revised sharply higher still, consumers took a bit of a break. Still a solid month, just a normal pullback after a lot of May spending.


Earnings beats: BLK, BAC, JBHT. Perhaps the financials can find some solace with BAC after the rather weak bank earnings reported Friday.


Fed: Chairman Powell addresses Congress this week with his semi-annual Monetary Policy Report. You know, 'strong economy, gradual reduction,', etc.


NFLX: Gets another pre-earnings downgrade this morning. Nervous analysts, others looking to get in at a better price.


OTHER MARKETS
Bonds: 2.842% vs 2.829%. Bonds tail off from the gains late week, yields rising a bit.

EUR/USD: 1.1715 vs 1.1685

USD/JPY: 112.31 vs 112.36. Dollar fades slightly after a big move

Oil: 69.50, -1.51. After that spike to a higher recovery high oil is backfilling quite a bit.

Gold: 1242.60, +1.40


Rather quiet start to the week, and that is not a bad thing in what is still a market that is trending higher. Overall. As noted over the weekend, the keys to us are how the growth indices hold their test of the old highs and rebound from that test. Also, what do the large cap NYSE indices show after some better action last week? More money their way, and is the money pulled from other areas such as growth?



______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Friday, July 13, 2018

Market Alert - To the Close

Some nervousness ahead of the weekend after NASDAQ moved to new highs, evidenced best by NFLX that has sold back ahead of Monday earnings on some analysts who 'warned' NFLX could miss earnings. Sure it could. Any stock could. What is likely the scenario? Voice concerns, buy on the dip ahead of earnings. We will likely do the same Monday.

Market is mixed, just noncommittal really though not a selloff.

SP500 2.28, 0.08%
NASDAQ 2.28, 0.03%
DJ30 82.55, 0.33%
SP400 -0.07%
RUTX -0.16%
SOX -0.40%
NASDAQ 100 +0.15%

SP500 at 2800 -- blow the trumpets, right? Just another level to try and pass through to the upside.

Took some gain on an AMZN position, like RH even if it is Friday. Again, just likely nervous feet ahead of the weekend after NASDAQ breaking to a new high.


______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Market Alert - Pre-Market

Futures vs FV: SP -0.50; DJ +11.00; NASDAQ +1.00

Earnings season is not off to a rousing start thanks to poor bank results. JPM beat, but WFC missed on the top and bottom line, C missed on the top line. It must be tough not to be able to make money while still receiving free money from the Fed.


US/UK trade: the two countries announce an "ambitious" trade deal as the President says that whatever Brexit plan the UK works it will be able to trade freely with the US. Press conference ongoing and the two leaders are making nice for the cameras.


Import prices: -0.4% vs 0.9% prior (from 0.6%)

Export prices: 0.3% versus 0.6% prior.

Import prices tank while export prices continue their rise. Biggest rises in export prices the past two months since 2011.


OTHER MARKETS
Bonds: 2.834% vs 2.844%

EUR/USD: 1.1643 vs 1.1667

USD/JPY: 112.51 vs 112.53

Oil: 70.60, +0.27

Gold: 1242.10, -4.50


After the NASDAQ breakout and SP500 clearing its next resistance, stocks are off modestly, trading in a range the past three hours.

A soft open in a move higher is good. It allows the bids to regroup and return at a 'better' price.

We will see how stocks continue the move. There are some good patterns and some good moves in progress. Don't love buying on Friday, but we will see what the market presents.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Thursday, July 12, 2018

Market Alert - Pre-Market

Futures vs FV: SP +13.38; DJ +200.55; NASDAQ +32.52

After a day of 'bad legs' (Tour de France reference) in the stock market as 'trade war fears' predominated, now 'trade war fears subside' according to many news sources. What changed? The date on the calendar. Nothing else. For now the half lives of 'trade war fears' is still shrinking.

Futures are holding near session highs first hit 3 hours back, still trending higher overall versus a stagnant gap upside. This is always a better scenario, but the gap higher still gives sellers something to shoot at.

After a move to the prior highs in June, NASDAQ, SP400, RUTX faded back to test. Today it looks as if they are already gearing up for a move back to take on those prior highs. Again, we will see how the bids hold.


CPI, June: 0.1% vs 0.2% expected. 2.8% prior. Higher was 12/2011 at 3.0%.

Core: 0.2%. 2.3% year/year vs 2.2% prior. Matches 1/2017 but to get higher have to go to 9/2008 at 2.5%.

Average Hourly Wages: 0.0 for a second month. Prices rising, wages not. Great! The worst of all worlds for the average citizen!


COST: June sales +9.7% versus 6.9% expected. Okay, this is the old did you sell more in goods or was the gain because of increased prices (read inflation)? This is a big gain so not all would be inflation, but you can bet some is. I was shopping on AMZN for items I have purchased before. HP printer ink is an example. I paid $51 and change last year. This hear the same printer set is $64. 25% increase. Tariffs? Ink costs? Wage increases (nope)?


NFLX: Downgraded by UBS on valuation. Well, UBS better downgrade just about every leadership stock if that is its metric.


OTHER MARKETS
Bonds: 2.862% vs 2.853%

EUR/USD: 1.1672 VS 1.16762

USD/JPY: 112.46 VS 112.093

Oil: 71.17, +0.79

Gold: 1245.90, +1.50


Futures are shuffling around at the pre-market highs a day after the trade fears dominated and were blamed for the WED selling. We will see how the gap holds and what decent entries are available once the initial move settles in.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Wednesday, July 11, 2018

Market Alert - The Close

After four sessions of starting higher and moving higher, the indices took another tack. The Tuesday evening announcement of $200B more in proposed tariffs started stocks lower. Some indices moved lower from the start, some recovered some of the lost ground. None closed positive.

SP500 -19.82, -0.71%
NASDAQ -42.59, -0.55%
DJ30 -219.21, -0.88%
SP400 -0.83%
RUTX -0.71%
SOX -2.59%

VOLUME: NYSE -1.5%, NASDAQ +1.75%. No major selling and NASDAQ did rise off the session lows on its miniscule volume rise.

ADVANCE/DECLINE: NYSE -2.5:1, NASDAQ -1.9:1. Nothing that major here.

Technically the situation is this: NASDAQ, RUTX, SP400 have tested the prior highs. They made somewhat lengthy uninterrupted moves to get there. They are now fading off the move to those prior highs to test. This test reveals either 1) a test of near support where they reload to try for a breakout move, or 2) a double top formed and these indices are going to sell deeper than near support.

You could even throw SP500 in that group as it has reached the March peak and the June peak and is fading back from that level as well, also after a week of upside.

DJ30 was down but not hard. It gapped lower and sold to the 50 day MA's, but volume remained well below average, and this is a good test point after four straight upside sessions. Not bad. Still like our DIA calls.

SOX is having more of a struggle. After gapping over the 50 day MA's Tuesday, SOX gapped below them Wednesday. It is out there on its own right now, and afterhours AVGO announced an acquisition of CA and was down 20 clicks; that won't help SOX Thursday.


NEWS/ECONOMY

Trade: The US is proposing 10% tariffs on $200B worth of Chinese exports to the US with the possibility of a full $500B of goods being subject to tariffs. What did China expect? It met the US initial tariffs with 'instant' tariffs of its own and then tried to get the EU to form an alliance against the US, all the while denying it steals IP from US companies through its 'partnerships' as well as outright theft from cyber hacks and attacks. It was one of those 'wait for it' moments after China responded to the US the way it did.


PPI: 3.2% year/year, the highest since November 2011.

Some serious price increases. With a GDP last at 2%, even if it is 4% Q2, this is not the right direction. Supply should alleviate pricing pressures. If that is not happening, then supply needs more freedom to meet demand. That is the only way to avoid price increases. A massive recession can do that as well, but the first action in a recession is price increases as supply collapses.


Yield Curve: how does it fit in?

NOW, consider the yield curve, the 2% Q1 growth, and the producer price surge. Could this be an indication that, despite the 'great economy' the Fed talks about, that a recession is grumbling around? I know, sounds crazy, but I am simply looking at what is happening and positing possibilities.


NATO News: At what was supposed to be a casual early meeting of NATO members, President Trump called out Germany for buying a large percentage of its natural gas from Russia, enriching Russia by billions while seeking the help of NATO for protection against Russia. Trump went on to state that Germany was 'captive to Russia' as a result.

And there was more. Trump noted that while Germany pays billions to Russia for gas, the US was losing billions in its trade with Germany and EU allies -- where is the equity in a situation where Germany wants the US to help protect it from Russia while Germany pays Russia billions for Germany's energy and at the same time sticks the US with large tariffs on US goods yet howls when the US threatens to treat Germany in a similar manner of Germany won't agree to NO tariffs?

The irony dripped off the words. Of course, the powers that be, the media, etc. self-flagellated over these words, unable to believe their ears that the US President could use such pedestrian language. The nerve. Actually putting into simple words the truth. We need nuance, winks, nods -- and of course, nothing being done.

As a personal observation, how can Germany and the EU complain about US overtures to Russia given this situation? There is an old saying in the law about coming to the table with unclean hands. In other words, you cannot come to court and ask that the other side act with probity if you have not acted with such yourself.


We picked up some ATVI and HUYA as they made very good moves in a weak market. Took some gain on CRM per the plan, letting half continue higher. ISRG hit the initial target but it is showing good volume and we are letting it ride a bit higher on this good volume before we pull the trigger on some gain.

The trade issues are always on the horizon and as shown the past week, even when a 'crisis' comes as with the Friday institution of tariffs and 'instant' responses with no resulting earthquake and the market breaths a sigh of relief, the bad news can come right back and whack the market as on Wednesday.

Even so, some stocks worked very well. ATVI, HUYA as noted. CRM, V, DIS, MYGN, VRSN. It was not a storm of downside only. Moreover, many stocks that were lower are putting in good tests: TREX, TTWO, UIS, ROKU, FB, NFLX. It was not all dead weight pulling the indices lower.

Once again, however, the indices have to show they can make the moves, and frankly that is normal action. As discussed, the leaders hit the prior highs after good runs of a week or more and are now testing that move. They will either hold at or around near support and rebound to try a breakout or they will sell further. With the still solid leaders we see, they definitely can make the move. Of course there is the Fed, and there is trade, and there is summer . . .

Have a great evening!
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Market Alert - Pre-Market

Futures vs FV: SP -18.29; DJ -209.66; NASDAQ -55.85

Futures predictably lower after the late Tuesday announcement of $200B more in US tariffs on China goods. China says it will respond with delaying mergers, slowing US firm licensing, and increasing inspections of US goods. Wow, that is really punching back. The trade picture is lopsided so China has little leverage on trade. It is the 'other' things that so easily spooks so many analysts. They fear standing up to China it is a change, an unknown versus the SOP of acquiescing to whatever China wants to do. It is tough making a stand. The West has not done so in a long, long time.


NATO: Trump this morning says Germany is 'captive to Russia' because it gets 'so much of its gas from Russia.' Stark truths. NATO was created to prevent Russian (then Soviet) aggression. If Germany relies upon the alliance's nemesis for a majority of its energy, how can Germany effectively prevent that aggression? Pointing out the obvious brings rants of 'insane,' 'out of control,' 'demeaning our allies.' Semantics.


PPI: +3.2% year/year, the highest since 11/2011. Some serious price increases. With a GDP last at 2%, even if it is 4% Q2, this is not the right direction. Supply should alleviate pricing pressures. If that is not happening, then supply needs more freedom to meet demand. That is the only way to avoid price increases. A massive recession can do that as well, but the first action in a recession is price increases as supply collapses.

NOW, consider the yield curve, the 2% Q1 growth, and the price surge. Could this be an indication that, despite the 'great economy' the Fed talks about, that a recession is starting? I know, sounds crazy. Just looking at what is happening and positing possibilities.


ECB: Says may hike rates sooner than expected. Euro is up modestly as a result. Ho-hum.


OTHER MARKETS
Bonds: 2.851% vs 2.867%. Bonds rally on the uncertainty of the trade issues.

EUR/USD: 1.1745 vs 1.1734. Euro a bit stronger as ECB talks of a rate hike faster than widely expected.

USD/JPY: 111.12 vs 110.89. Dollar surges against yen.

Oil: 73.31, -0.80

Gold: 1252.50, -2.90


Futures are off the lows but not a lot. Definitely the recent move higher will be tested and the takeaway from this session is whether the bids return today.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Tuesday, July 10, 2018

Market Alert - Pre-Market

Futures vs FV: SP 5.56; DJ 77.41; NASDAQ 16.00

Futures hold modest gains while much of the world markets struggled a bit. Earnings are cranking up and there is a somewhat accompanying dearth of news as it does.

Trade: The trade news is quiet for a second session.


FOMC: No Fed statements this morning but CNBC ran a piece "Don't Fear the Yield Curve," discussing why this time it is different. The 10 year/2 year spread is 29BP, a level that historically gives a recession warning. As with Greenspan and his 'conundrum' dismissal of the flat curve, this Fed risks ignoring the yield curve right into recession.


Beats: PEP. Sugar water and snacks post good earnings. When you look at the waistlines around America, you are not surprised. Seriously, take a look at the obesity statistics. I was shocked, but then not. The food pyramid promulgated by the government works! We all look like pyramids!


TSLA: Courts the wrath of Trump as it plans a 500,000/year unit plant in Shanghai.


OTHER MARKETS
Bonds: 2.873% vs 2.858%. Bonds selling, yields rising.

EUR/USD: 1.1718 VS 1.1752. Euro stumbles some after a bounce.

USD/JPY: 111.19 vs 110.80. Dollar jumps against yen

Oil: 74.33, +0.48

Gold; 1254.80, -4.80


Monday saw financials and industrials start to stir to the upside to support the rally in the other indices. Watching for that to continue and also watching closely how the NASDAQ, RUTX leaders to this point continue to move.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Monday, July 9, 2018

Market Alert - Pre-Market

Futures vs FV: SP +11.23; DJ +114.52; NASDAQ +42.17

Stock futures gapped open early and have held the gap. This continues the 'significant' moves from last week that started Thursday with RUTX and continued Friday with NASDAQ, SP400 and yes, SP500. Will today be significant as well? You can only have so many significant moves, right? After that it is semantics. Thus, a continued move higher would be in line with the significant move last week. Talk about semantics.

If DJ30 and SOX can make a significant move themselves, well, that is the next phase, right? Financials showed some upside Friday but it was nothing that technically compelling. Chips showed some flashes of greatness, e.g. AMD, but many in the group just bounced. The market needs to get all indices moving ahead, and these two are the next ones to watch. NOT that you can assume NASDAQ, SP500 are locks to continue higher.


Basically there is a vacuum of news to start the week and that keeps the momentum going.


CPI is later this week and given prices, lack of labor (with 95+M working aged people out of the workforce), energy, that could generate some interest.


China: Stock market rebounds. All must be well in trade. Sure. For today.


UK: 3 Brexit ministers quit Sunday. Going well for Maye.


SBUX: Ditching plastic, one-use straws by 2020. I feel better already.


OTHER MARKETS
Bonds: 2.851% vs 2.824%. Bonds fade some, yields bounce

EUR/USD: 1.1777 vs 1.17439. Euro continues a bit of a rebound.

USD/JPY: 110.46 vs 110.474

Oil: 73.97, +0.17

Gold: 1264.50, +8.70


Futures are flat-lined for the past 2 hours. These gaps upside or gaps lower that are not trending are always question marks. Perhaps not as much in this situation as the market made a significant move last week and is working on extending it. Sellers may take a shot at it or some profit taking may occur in the morning session after the open, but most sellers are at bay right now, waiting on earnings season to re-up their efforts. That is what pre-earnings moves are all about: a dip ahead, a move higher into results, and then the chaos that often follows the results.

Not a lot of upside built into this move yet, so there is still room to run and we will continue looking at good moves from our plays for new entries.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Friday, July 6, 2018

Market Alert - Pre-Market

Futures vs FV: SP +0.29; DJ -31.74; NASDAQ +12.20

The doom/negative websites said to watch out for a jobs miss. The overly bullish said expect huge. It was neither. It was not bad. It was more of the same, i.e. an improving, decent jobs market but not producing wage growth.

Non-farm: 213K vs 195K exp vs 244K prior (from 223K)

Unemployment: 4.0% vs 3.8% ex vs 3.8% prior. Rose as more people entered the workforce looking for jobs. This is, finally, a more normal reaction. Amazing isn't it how all through the past 'recovery' nothing acted normal yet everyone said it was a recovery. It wasn't. Now that we are having a recovery you see the numbers reaction as they always do.

Wages: 0.2% vs 0.3% exp vs 0.3% prior. 2.7% year/year

Workweek: 34.5 vs 34.5 exp vs 34.5 prior

U6: 7.8%

Participation rate: 62.9% vs 62.7%. More people coming back into the labor force, trying to weed down that 95.9M people out of the workforce and get them into productive roles once again versus reading the want ads, bed rest, and the other absurd things that allowed them to collect unemployment or disability or some other 'aid.'

Jobs:
Manufacturing +36K
Professional/Business: +50K
Healthcare: 25K
Construction 13K
Mining 5K
Retail -22K


Trade: US/China exchange $34B in trade tariffs.

Trade Deficit: Over past 3 months down the most in 10 years. Current read is the lowest since 10/2016. Seems to be going the way the President wants it.

Continue hearing out feckless elected officials in Congress cry about the tactics used against our allies and non-allies regarding trade. They want a kinder, gentler approach. We have HAD a kinder, gentler approach for decades and they have pantsed us. They don't care; they have a good deal. So, do you continue to do what does not work or do you finally demand they change and if not reap some of the pain we have to endure? Our congressional leaders are, as stated, feckless imbeciles.


BIIB: A breakthrough on Alzheimer's. We can only pray this is true.


OTHER MARKETS
Bonds: 2.818% versus 2.835%. Bonds rallying on this jobs report? On a Fed to stay the course in hiking?

EUR/USD: 1.1746 vs 1.1689

USD/JPY: 110.54 vs 110.66

Oil: 72.28, -0.62

Gold: 1257.20, -1.60


Futures were -6 NASDAQ, -75 DJ pre-jobs report. They spiked to NASDAQ 29.95, DJ 44.26 post-report. They have settled back to mediocrity as the bell approaches -- trade war, remember?

Friday on a shortened week. We will see what bids hold, what bids emerge -- if any. Thursday saw some drugs/biotech/healthcare areas show some life, a bit defensive but also a growth area. Leadership could emerge from there (one reason small caps were solid). Nonetheless, have to see the NASDAQ large caps also step up again.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

Alert Key
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