Market Alert - Pre-Market

Futures vs FV: SP +5.4; DJ +41.13; NASDAQ +10.49

The stock indices are trying to take back the part of the gain they lost on the Monday close. Futures rose after the Monday close though they did back off as the evening progressed. This morning, an upside gap and run took them back to the pre-last hour selloff levels. As the open approaches, however, they are fading those gains back toward flat.

Brexit takes a momentary back seat to the Fed chairman with her 10:00ET testimony and Q&A with the Senate Banking Committee. Will her commentary on the jobs situation be paramount? Brexit impacts? Rate hike schedule? No. The most important aspect of the event will be whether she comes across with a modicum of coherency after that abysmal press conference after last week's FOMC decision where she chased her tail in response to reporters' questions.

Earnings: WERN (overland trucking) warns on Q2 and is down 13% pre-market. Trucking under pressure is not a good economic indicator. Fuel prices are still relatively low; off the lows but still lower than they were. thus there are other factors at work.

Brexit: More polls suggest 'stay' holds its lead, but an average of all polls shows a dead heat and indeed one new poll shows a move back to 'leave' in the lead.

CA: Power grid on the brink in the heat wave, warning citizens to "expect 14 days without power.'

Oil: Nigeria ceasefire with rebels has oil off a dollar. The bounce off the 50 day MA test hits a slippery point.


OTHER MARKETS
Bonds: 1.673% vs 1.67%

EUR/USD: 1.1292 vs 1.1305. Dollar rebounding some versus euro

USD/JPY: 104.42 vs 103.901. Dollar bouncing back versus the yen as well, but it is so far down the well you hardly notice.

Oil: 48.36, -1.01.

Gold: 1275.80, -16.30


Futures are hanging in with gains though they are significantly off the earlier highs. Monday found it hard to hold the majority of the move, but Tuesday is not just giving up. It is trying to get back what was lost, showing a bit of resilience. The pre-market action, however, does suggest some of the same issues, i.e. unable to hold an early gain.

Ahead of Yellen and the Brexit vote, the 2 steps forward, 1.5 steps backward action may continue. Bonds are backing off along with gold; those are likely more instructive bigger picture and both suggest the market is easier with the Thursday vote. Note oil is off $1/bbl but stock futures are up; they only use that 'relationship' when it benefits them in coming up with an explanation ('oh, oil is up so stocks must be up,' or 'oh, oil is down so that is why stocks are down').

We still have upside plays we are looking at in the leadership groups, and last night added some downside plays if this rebound attempt from the pullback continues to fail to hold gains and then rolls over.



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
______________________________________
Alert Key
http://www.investmenthouse.com/alertkey.htm


Customer Support: http://investmenthouse.com/contact_us.php