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Friday, October 21, 2016

Market Alert - To the Close

Once again the market was saved off the lows, as SP500, SP400, DJ30 sold but have recovered most of that drop with just nominal losses.

AMZN made a move higher but is at the 20 day EMA; may take a partial.
Also like SYRG positions as well.

Overall a recovery but it is expiration and not totally trustworthy, but with some good moves we can pick up some.

Took some gain as well . . . because it was there.

More after the close.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -10.44; DJ -81.35; NASDAQ +4.34

MSFT and MCD are helping offset morning losses, but not enough on DJ30 as GE,HON earnings weigh on that index. Today it is all about earnings as the news flow is quite light.

Earnings beats: MCD, MSFT, AMD

Earnings misses: GS (TL); SKX (TL, BL)

M&A: BTI offering to buy RAI (both in tobacco; a smoking deal?)

Japan: Kuroda repeats that all monetary policy decisions are made with yield curve targets in mind. He also added there were no changes in conditions that would warrant any new action.

China: Housing prices +11.2% year/year versus 9.2% prior

Bonds: 1.738% vs 1.75%

EUR/USD: 1.0875 VS 1.0928. Dollar surging versus euro

USD/JPY: 103.73 vs 103.929

Oil: 50.44, -0.19

Gold: 1268.20, +0.70

Futures are trading just off morning lows as some big NYSE names drag those indices early. If buyers want to enter to try and continue the NYSE index moves off the range lows, they will have that opportunity. The question is whether they will take the offer.

There are plenty of good patterns and good leadership groups, but those only seem to be helping SOX and NASDAQ. NASDAQ is set to lead higher again, and that may bring the buyers back after a weaker open on the NYSE indices.

Expiration Friday so we will look to take the last of the MMM option gain. Still many good patterns in some of our potential buys. Again, we will see what the big money does and see if that gives us some entries on AMZN and company.

Jon Johnson, Chief Market Strategist
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Thursday, October 20, 2016

Market Alert - Pre-Market

Futures vs FV: SP -2.79; DJ -17.62NASDAQ -3.21

You can't please all of the people all of the time. If you are a central bank in this world economy and don't fawn over stimulus, QE, or waver like a pillar of jello at the thought of hiking rates, you can't please any markets.

There are other stories, but as with the debate, regardless of the substantive issues finally covered in a meeting between the 2 candidates, a sidebar dominates the stories. Such as it is with the markets.

ECB: Rates left unchanged. No surprise. Then there are the Draghi comments.

"ECB did not discuss QE extension beyond March 2017"

"Extraordinary policy won't last forever"

But he did throw markets a bone: "Abrupt end to QE is unlikely"

Stock futures were up modestly pre-ECB. They are now down modestly post-ECB.

Fed: Had to join in. Dudley says the Fed will raise rates in 2016 if the economy stays on track. I suppose that assumes the economy is on track right now. The Fed Funds Futures contract suggests a 69.5% chance of a hike in December, but, as with gravity, it is an extremely short distance force.

BOE: So did the BOE. It released a study finding QE effects are only temporary and it is best for plunge protection. Looking at the US stock index charts, that is somewhat borne out: each time a QE program ran out the markets started to roll over and were rolling over until the Fed was compelled to launch another program.

Philly Fed, Oct: 9.7 vs 5.5 exp vs 12.8. It is still positive so that has to be good news. 0.5 would be good news, so 9.7 must be super, right?

Earnings beats: AZP, TRV, EBAY (but really weak guidance)

Earnings misses: AAL (TL); VZ (TL); WBA (TL); DNKN (TL); MAT (BL)

Something of a familiar theme again emerging, the old tell tale of a still weak economy, the top line revenues (sales) miss.

Bonds: 1.75% vs 1.74%

EUR/USD: 1.0969 vs 1.0971

USD/JPY: 103.618 vs 103.617

Oil: 50.82, -0.76

Gold: 1271.10, +1.30

Futures are modestly lower toward the open, attempting a bounce off the post-ECB lows. The pre-market is not deciding anything but it usually does not. Stocks were trying to move higher pre-Draghi, so we will see if that bid returns. And if it does, just where the NYSE indices find resistance on this bounce. That along with NASDAQ and its ability to maintain its trend are the key -- er, important -- tells for the session.

Jon Johnson, Chief Market Strategist
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Wednesday, October 19, 2016

Market Alert - The Close

We have seen this movie before. I don't want to be pessimistic, especially with the Fed's itchy stimulus finger, but the index action has a familiar look, i.e. bouncing off support but moving up to resistance then fading the move. The indices still held gains on the day or in the case of SOX, posted modest losses. That means SOX and NASDAQ remain in their uptrends and there were no new breakdowns in the NYSE indices. The upside action, however, still lacks pop, and the patterns, though holding their own for now, are still bearish on NYSE and NASDAQ is not looking all that chipper (I know, not exactly an industry term).

SP500 4.69, 0.22%
NASDAQ 2.57, 0.05%
DJ30 40.68, 0.22%
SP400 0.45%
RUTX 0.44%
SOX -0.47%

VOLUME: NYSE +7.5%, NASDAQ +7%. Stronger volume on the upside move though still below average and overall anemic.

A/D: NYSE 2.4:1, NASDAQ 1.5:1. NYSE breadth getting a boost from the session leading RUTX and SP400.

The news was light with China making its GDP forecast (surprise! How do those communists do it?) but US Housing starts plunging 9% on a massive drop in multi-housing construction.

We picked up some APA and MNST upside as energy worked well and Monster makes energy drinks. Thin connection, but some good patterns there.

Took some gain on CRK as it enjoyed a nice move. Closed three downside plays despite misgivings about the market overall. IP and MCHP looked too strong with some solid volume on upside breaks of resistance. Had to act, but will look for more downside plays if the index patterns deteriorate further.

Have a great evening!

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP +2.25; DJ +31.04; NASDAQ -4.77

Futures started lower in the early hours but have steadily climbed to positive in the old low to high move. That bodes well for the open perhaps having more momentum than the futures indications suggest. After a Tuesday session that gapped higher but then faded form the highs, a return to bids to start Wednesday is a good indication for the upside.

China: Q3 GDP somehow meets expectations: 6.7% year/year. Gee, that wasn't centrally planned or anything.

Housing Starts, September: -9.0% versus +2.9% expected.
1.5 year low.
Single family +8.1%
Multi-family: -38%
That is actually a good mix of starts. You want to see single family take over from multi as a more healthy progression.

Earnings beats: MS, INTC, ISRG

Earnings misses: HAL (TL); YHOO (TL); SVU

Bonds: 1.768% vs 1.74%

EUR/USD: 1.0968 vs 1.0978. No change after a near term wild ride.

USD/JPY: 103.467 vs 103.809. Dollar gives back some gains.

Oil: 51.05, +0.76

Gold: 1271.70, +8.80

Well, everything must be okay because futures are up and trending higher into the bell, right? It would appear the market has somewhat calmed itself again near term and now tries to recover what it lost when the volatility returned 6 sessions back.

The indices still have not merged their trends, the NYSE indices are still in the September/October range following the break lower. SOX and NASDAQ are still holding their trends. All will try to add some more upside on the session but with this market and the renewed volatility, that is not a given.

Energy is stronger, financials look better again. APA comes to mind as it shows a higher open off of the gap to a doji Tuesday. We will see what other stocks present opportunity. IP, MMM likely bump the stop points so we will see if they sustain their moves of again backslide.

Jon Johnson, Chief Market Strategist
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Tuesday, October 18, 2016

Market Alert - Last Hour

Stocks are trading in the last hour and coming under just a bit of pressure. The indices are of course up after the gap higher but are not powering ahead. DJ30 is well off the intraday high; yes it is lower because of IBM but the Dow is off its high while IBM has recovered from its morning low. Other components are weakening.

SP500 13.62, 0.64%
NASDAQ 47.64, 0.92%
DJ30 76.98, 0.43%
SP400 0.61%
RUTX 0.71%
SOX 1.22%

Perhaps this is simply a start to a new bounce off the September lows. After all the indices are holding their gains -- showing doji. They all gapped to doji. NASDAQ doji at the 50 day SMA. SP500 doji below the 10 day EMA. SP400 doji at the 10 day EMA. DJ30 doji after tapping at the 50 day MA and sliding back below the 10 day. SOX gapped to a doji at the 10 and 20 day EMA. All held the September lows, all gapped, but at best they are not doing anything with the gap. As noted, DJ30 has slid 65 points from its intraday high.

Now it is likely those doji don't mean much. Big gap off of support, so they may have simply used up the day's allotment of upside gas all at once. If they can hang onto the gains then the upside door is still open.

Looking at APA upside, ROST downside, the 2 plays from last night. They are showing the action we want, though both could stand some more volume.

Overall a gap upside off the lows. Once more stocks manage to hold with SOX and NASDAQ still in their trends. The move has some questions given the gaps to doji, but earnings season seems to be providing some upside impetus. Enough questions on the action to let the downside work to see if the market falls back down from the doji.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP 17.65; DJ 121.06; NASDAQ 56.08

Whatever worried the markets has taken a back seat today. Futures soared when they opened hour ago, held steady, then rallied farther over the past 2 hours.

I saw 'whatever' because despite the desire to pin gains on a specific event, often that just is not the case.

Fed: Some are saying the more dovish comments from the Fed vice-chair Fischer are prompting this rally. Those comments were Monday morning, however. Perhaps when combined with the really bad data from the NY PMI and the Production and Utilization numbers? Again, old news.

How about the rumors of some Chinese stimulus? Always good for a rally. Word out of the East is that China may have plans on stimulus given its economy is falling hard according to the comments we are hearing.

Is there some new poll out on the election showing House republican, President Clinton and thus supposed gridlock? Of course gridlock is now a fiction as Congress has ceded authority to the Executive via failure to assert its Constitutional controls over it. Heck, the Judiciary as well as the Court writes laws from the bench but the Congress has constitutional authority to set the Court's jurisdiction. Congress, however, is now just a group of people who go there to get the connections for post-public life and to get the better healthcare and pensions that the rest of us cannot get. But . . . I digress.

How about earnings? That is often the driver, but most earnings cited were out this morning after the futures massively gapped upside. They certainly are not hurting, but outside NFLX, are they the reason?

Earnings Beats: NFLX, GS, UNH, JNJ, RF, IBM, UAL. Top and bottom lines.

That is the story. Better results, dovish Fed, what more could you want?

CPI: 0.3% vs 0.3% vs 0.2%. Yr/yr: 1.5% vs 1.1% prior

Core: 0.1% vs 0.2% vs 0.3%. Yr/yr: 2.2% vs 2.3% prior

Up: Gasoline (5.8%), Rents (0.3%), Airlines (0.4%), Services (0.2%)

11 months of the core over 2%.

Bonds: 1.775% vs 1.766%

EUR/USD: 1.1002 vs 1.1005

USD/JPY: 103.951 vs 103.872

Oil: 50.32, +0.38

Gold: 1261.20, +4.60

Stocks are set to gap higher after the NYSE indices faded to the September lows but did not take them out. Oh, some did on the Thursday low, but magic occurred that session. Now some magic upside as well explains the big break higher. Perhaps. In any event stocks are going to gap higher and we see how they hold.

We will look to bank some IBM profits; it is off last night's lows but is still in the 150 range, below our initial target. We will see how it trades. Often you have a gap lower, a modest bounce attempt, then deeper selling. With the rest of the market surging, however, you may not want to wait to see if a rebound fizzles. Perhaps with part of the position.

As for new positions, we will see what kind of entries we get and importantly, what kind of holds of the moves there is.

Jon Johnson, Chief Market Strategist
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Monday, October 17, 2016

Market Alert - The Close

Boring across the board. Stocks could not rally off of the volatility that ended last week, but they did not sell either. They just bumbled along with modest, rather even, losses across the board.

SP500 -6.48, -0.30%
NASDAQ -14.34, -0.28%
DJ30 -51.98, -0.29%
SP400 -0.11%
RUTX -0.19%
SOX -0.54%

VOLUME: NYSE -13%, NASDAQ -10%. Very low, below average trade, falling farther below average than Friday. No serious selling denoted from the volume drop.

A/D: NYSE -1.5:1, NASDAQ -1.45:1.

Once again the indices didn't really do anything to establish direction one way or another. All showed weakness though nothing break worthy.

SOX tried the 20 day EMA again but faded, still holding over the 50 day MA's, still holding its trend up the 50 day MA's even though MACD is slipping, putting in a lower high on the September price high.

DJ30, SP500, faded farther from the Friday intraday high that tested the 50 day EMA, but held inside the early September lows that define the bottom of the September/October range.

SP400 faded just slightly, also easily inside that September/October range. RUTX did put in a lower closing low below the September low but hardly noticeable.

NASDAQ slipped a bit farther below the 50 day EMA but is still holding its trend with few issues, similar to SOX holding its trend.


Some recent leader groups were under some pressure, e.g. chips. AMAT gapped and reversed and we entered downside. MCHP touched at the 50 day EMA again and faded and we entered it downside. SLAB, NVDA still holding the 50 day MA, but the group is a bit tired at this juncture.

Industrial equipment is still good for the most part as 2 leaders, CAT and CMI, hold their gains.

Financial stocks could not muster anything despite BAC's earnings beat. GS faded back to the 10 day EMA, C showed a doji at its 10 day, JPM tested its 50 day MA on the low. Even BAC could not muster any move upside off its earnings.

Oil stocks struggled as well, also victims of some of their own success. CWEI tested toward the 20 day EMA but recovered to hold the 10 day EMA. Still strong. APC sold down to the 20 day EMA. APA held the 20 day EMA for the third session, showing a nice doji with tail. HOS, WLL continued to test.

Big Names are doing well after hours, at least NFLX. It beat estimates and international growth expectations and is up $14 points. AAPL closed flat after testing a bit lower, recovering to the close. AMZN broke the 20 day EMA on rising, above average volume. GOOG showed another doji at the 50 day SMA. MSFT managed to test and hold the 50 day EMA, still in its lateral move. IBM is getting whacked after hours on its earnings, up off the lows but down almost 4 points.


The data was not good. Makes the Atlanta Fed look quite prescient, but of course it was forecasting 3.6% Q3 GDP at first.

New York Empire PMI: -6.8 versus 2.0 expected versus -2.0 September. 5 month low, negative 11 of the past 15 months with 2 of the 4 positive months just barely getting back over the flat line.

June was so solid, surely a turn for the entire economy. Sadly, the June turn was just another single month outlier as I discussed at the time.

Industrial Production, September: 0.1% versus 0.2% expected versus -0.5% (from -0.4%)

Thirteen month of contraction, the longest string ever without being in a recession. Frankly, I think it is NOT the longest strong without a recession because I believe the US is now in a recession and we will see the that when the revisions come in for the first half of 2016 and most likely the second half as well.

Capacity Utilization, September: 75.4 versus 75.6 expected versus 75.3 prior (from 75.5)

Misses and revisions. Economists are expecting too much, buying too deeply in their own ideas as to the recovery's strength. When you see misses AND revisions to the downside, there is a decline occurring that the experts have not picked up. It is not just a miss but it starts to show their premise, i.e. a second half recovery, is incorrect. At least the Atlanta Fed has sliced its original Q3 forecast in half.

We picked up some puts on AMAT and MCHP, took some nice gain on our AMGN puts. Oil positions tested a bit more but the patterns are good so we left them. Afterhours IBM is trading at 150, off close to 5 points. If the executives cannot talk up the quarter our downside position is below our initial target so we can lock up some gain on them. Nice.

Have a great evening!

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -0.83; DJ -1.08; NASDAQ -1.58

A rather vanilla start for the week is ahead as stock futures are essentially flat, never really struggling, not showing a lot of power upside either. At least there is no bomb lower after the Friday rally attempt that rolled over.

NY PMI: -6.8 vs _2.0 expected vs -2.0 prior.
Back to 5 month lows as the June bounce was truly, as noted at the time, an outlier bounce that has fizzled. New orders are down again in a report that is not encouraging.

Industrial production, Sept: 0.1 vs 0.2 vs -0.5 (from -0.4)

Capacity utilization: 75.4 vs 75.6 exp vs 75.3 prior (from 75.5)

The revisions are not good as downside revisions show too much exuberance. Not that surprising given the Fed's 2016 forecast keeps falling as the Q3 GDP forecast keeps falling as seen on Friday. They hope things will get better, apparently based upon the belief that enough time has passed so they are 'due.' Again, if the policies that caused the problems are still the policies in place, expecting change is a fool's game.

EU CPI: 0.4 vs 0.1 prior. 0.4% year/year vs 0.4% prior

Earnings beats:
BAC beats on 1) trading, 2) expense control. Still not growing banking business, but you have to 1) loan money, and 2) have interest rates a bit higher to make money on banking business.

HAS beats

Fed: Fischer to speak at 12:15ET. Fischer is supposedly a hawk and a counterbalance to Yellen. Ha ha ha ha ha ha ha! That is a good one.

Economist Samuelson: Global debt is now $152T, up from 67T in 2002. Wow.

Bonds: 1.773% vs 1.80% 10 year

EUR/USD: 1.1005 VS 1.0969. Dollar weakens some after that strong dollar surge.

USD/JPY: 103.97 vs 104.146

Oil: 50.42, +0.07

Gold: 1255.40, -0.10

Stocks are set to muddle as a flat start doesn't give sellers anything to shoot at. Maybe buyers try to enter again. The market has not established a trend as DJ30, SP500, SP400, RUTX trade in the range after breaking their uptrends. NASDAQ has weakened. SOX is the remaining index in its last uptrend while the others broke the near term trends and are trying to decide which trend to try and take. The open today doesn't look as if it is going to do much to change that.

Jon Johnson, Chief Market Strategist
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Friday, October 14, 2016

Market Alert - The Close

It was a week that returned to old themes, one being China. Another is Fed action in times of market stress. Not market crisis, but simple market stress. The economy is, after all, recovering right? It would be very untoward just ahead of a presidential election if stocks rolled over and tumbled, belying the purported economic prosperity that everyone talks about but very few feel. Both were at work during the week, and the market action suggests they are not done.

On Thursday China reported exports fell 10%. Stocks fell hard, but just as several indices breached the early September lows hit on that sharp plunge, they reversed. No positive close but they went a long way in cutting the losses.

Friday there was more Chinese economic news but this time it was viewed as a positive. Its PPI rose (0.1% versus -0.3% expected) for the first time since March 2012 and helped bolster stocks and continue the Thursday rebound. September retail sales snapped back to 0.6% from -0.2% in August, adding to the upside impetus.

Stocks started higher but unfortunately hit their high at 10:20ET. That put NASDAQ at its 50 day SMA, SP500, RUTX and DJ30 at their 50 day EMA, and SOX and SP400 at their 10 day EMA. In short, they bounced, but bounced right into resistance. And, resistance held. A sharp drop to midday ensued, and then the indices range traded into the close.

SP500 0.43, 0.02%
NASDAQ 0.83, 0.02%
DJ30 39.44, 0.22%
SP400 0.01%
RUTX -0.27%
SOX 0.79%

VOLUME: NYSE -8%, NASDAQ -9%. Trade at least faded on the reversal, but it is because of a lack of volume that helped the reversal along given the early buying was not strong. Thus trade faded farther below average.

A/D: NYSE flat, NASDAQ flat.

The chart action on the week is bearish. The big Tuesday drop, the pause, then the Thursday gap and selloff. The rebound was modestly encouraging as it looked as if the Fed stepped in on SP500 and company and bought the dip, driving those indices back up inside the early September lows hit on that massive plunge 6 Fridays back.

The Friday action kept the indices above the early September low but that is about all it did. The indices moved up to tap resistance either from the 50 day EMA or the 10 day EMA and then reversed to give up nearly all the session gains. Indeed, RUTX did give up its gains and closed lower.

So, in a nutshell, after a quiet period where volatility died down and the NYSE indices looked as if they might try to follow NASDAQ and SOX' strength, the big V returned with gusto this week. A new selloff to new lows on this pullback for some of the indices, followed by a bounce that looks all but dead and over with.

That reopens the downside door and again leaves you asking the question, will the Fed try to stop any selling given the election is less than a month away? I am inclined to answer that 'yes.' Will the Fed be successful? In the short run the Fed can pull that off. It did so in February and pushed a very solid rebound. Friday Yellen was more dovish, "steering to the left of the Minutes" as a JPM analyst described it, indicating that she, of course, will take actions she deems necessary. So, it appears she will try, but will she overcome the market's bearish patterns.

Nonetheless, we picked up some SPY puts given the overall bearish chart. This has been an on again, off again market, but Mondays can be ugly in a market that has broken hard to the downside and has failed a bounce test.

Have a great weekend!

Jon Johnson, Chief Market Strategist
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Market Alert - To the Close

Stocks indices are for the most part holding gains but are well off the opening highs. SP500, DJ30, NASDAQ, SOX, RUTX, SP400 all gapped higher and tested resistance and all faded back from that resistance. That is not the most bullish action of course and it opens the door for more downside come Monday. It does, but there is always the Fed factor as it tries to prevent a selloff ahead of the election.

SP500 4.2, 0.2%
NASDAQ 6.81, 0.13%
DJ30 70.95, 0.39%
SP400 0.16$
RUTX -0.12%
SOX 0.94%

We are looking at closing VIPS as it is not recovering well. Also looking at some SPY puts. MCHP has bounced and is in position to fall as well.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP +10.99; DJ +115.06; NASDAQ +23.18

A day after Chinese export data rattled markets and helped a selloff in equities, at least early session, Friday Chinese inflation data is helping boost world markets. China's PPI showed its first increase since 3/2012. Everyone is happy. People from my era abhor inflation and it is hard to imagining a world where inflation is a good thing. It is also hard to imagine a world where the central banks and powers that be so desperately want inflation but cannot generate it. Perhaps they should just let markets work? What a novel idea.

Futures rallied early session and have held the gains after dipping the past hour, now rebounding to morning highs as the US bell approaches.

Retail Sales, Sept: 0.6 vs 0.6 vs -0.2 (from -0.3)

Control Group: 0.1% vs 0.4% expected. 2.5% year/year is the slowest growth since 11/2015.

Gasoline +2.4% is a big component of the sales. That of course is not a very good thing, burning up disposable income for people who have too little disposable income as it is.

PPI 0.3 vs 0.2 exp vs 0.0 prior

Core: 0.2 vs 0.1 vs 0.1, +1.2% year/year

Final demand year/year: 0.7%, the biggest move since 12/2014

Fed: Yellen to speak today on 'Macroeconomic Research After the Crisis.' Standing room only for sure.

Earnings beats: JPM, C, WFC, PNC (bottom line), INFY (bottom line but lowered 2017). Beats, but not blistering beats.

Jobs: HPQ to lay off 3k-4k. DB laying off another 10K (20%).

Bonds: 1.768% versus 1.746%

EUR/USD: 1.1008 vs 1.1053

USD/JPY: 104.14 vs 103.63

Oil: 50.84, +0.40

Gold: 1253.00, -4.60

The Thursday morning drop looks pretty far away in the rearview mirror as stocks rebounded in the afternoon and given Friday morning's rise. Stocks again found buyers after rolling over to a new selloff low and there are still buyers pushing into the open.

It thus looks as if the market upside was saved again and we will see later (or not if the records are scrubbed) if this had to do with the central banks again coordinating market interventions. Be that as it may, the move is holding this morning and if it continues to hold the move and not reverse in a mirror move of Thursday, we will have to tend the downside positions.

Not too wild about entering new plays given it is Friday and the return of volatility, but there are still some good patterns that held up during the selling, showing strength. If they make a mover we will look at picking up some positions.

Jon Johnson, Chief Market Strategist
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Thursday, October 13, 2016

Market Alert - Last Hour

Resilient or psychotic or a helping hand? Stocks sold to a lower low with DJ30, SP500, SP400 indices breaking the early September low. Then they all rebounded on cue, cutting the losses to just fractions. Classic topping patterns from a double tops, trend breaks followed by a rounded tops. Once, again, however, just when the indices were rolling below a prior low, magic. Again.

SP500 -4.08, -0.19%
NASDAQ -19.75, -0.38%
DJ30 -23.42, -0.37%
SP400 -0.33%
RUTX -0.60%
SOX -1.04%

The recovery is not a complete one but it keeps the indices in their ranges and many stocks have recovered from some new lows of their own. Once again finding a trend that will take over the action is elusive.

SOX remains in its trend, simply testing below the 50 day MA's then rebounding to hold them. Nice test. NASDAQ is below the 50 day MA's but has recovered nicely enough. Its pattern is not as golden as it was a week ago. RUTX held the September low and bounced; perhaps it has a bit more upside it can work on off of this test.

DJ30, SP500, SP400 all sold below the September low but have all recovered back into their ranges. Still not good upside patterns but they held the lows.

Again, no clear trend is taking hold.

We will see how some stocks on the border recover late, but with this kind of rebound from selling to not selling so much and recovering the lows suggest a rebound at least to test.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -15.28; DJ -114.20; NASDAQ -31.13

Futures gapped lower early session and have mostly traded in a range though they are rising toward the top of the range toward the open.

The election of all things is now being blamed for the selling. First it was up because Trump was lower; not because Clinton was higher. An interesting way of putting it. Now it is because of the press talking of a democrat sweep that it is supposedly down.

Couldn't be the economy and that it is tailing off. Or that earnings, what truly drives stock prices, are coming in thus far vastly disappointing with many warnings that are 'shocking' as some are putting it.

Couldn't be China could it?

China exports: -10% versus -3.3% expected. China's economy is struggling again so the PBOC floods more yuan into the world for liquidity purposes. I recall China saying at the G8 meetings it was all grown up now and would not do that. I guess it had its fingers crossed behind its back or just wondered how gullible we could be over here.

The information disseminated (misinformation?) is fascinating. A Harvard representative on CNBC still talks of a skills gap in the workforce yet there are tens upon tens of thousands of US STEM graduates unable to find work in the US. Yet we need more and more visas to let STEM workers in. You have to ask, but no one did, why are colleges that have surged tuition prices, flooded with students with low interest loans in the billions upon billions of dollars, HAVE FAILED to produce the skilled workers we so desperately need? Fail.

Imports: -1.1% year/year vs -2.2% prior. 26 months of declines.

US fires cruise missiles into Yemen. Continual wars. Hope we all are ready for that.

Earnings beats: CSX, TSM
Misses: DAL (top line)

AMZN hiring 120K seasonal workers.

DB: Hiring Freeze. Oh great, that is the usual sequence when a bank starts to fail.


Bonds: 1.753% vs 1.77%

EUR/USD: 1.1032 VS 1.1010

USD/JPY: 103.74 vs 104.295. Dollar off on weaker data

Oil: 50.25, +0.07. Was lower but has reversed even with API reports showing +2.7M bbl versus -7.6M bbl prior

Gold: 1259.70, +5.90. World tumult modestly boosting gold from its selling.

Okay so we had Tuesday weakness, a not even half-hearted attempt Wednesday at recovery, and now a Thursday that is opening significantly lower. Oh no, this cannot happen so close to the election as it will impact the Fed's impartiality. Hence the new spin it is a sweep that is causing the market to fall, not the economy, not any other issues. Clever people.

Stocks are set to continue the break lower by the NYSE indices. The key is the September lows hit on that massive Friday tank and whether they hold are breached. Of course even on a breach you have to see if it was a false break that sends buyers back. Oh, and the Fed and its useful other foreign central banks could use that breach, as in February, as a buying opportunity.

Watching NASDAQ and SOX try to hold support will be key.

Jon Johnson, Chief Market Strategist
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