Market Alert - Pre-Market

Futures vs FV: SP +2.41; DJ +11.95; NASDAQ +4.55

Futures are up, a bit off the highs, but similar to the other sessions this week: modest early gains but no real catalyst to push the market higher. A surge Friday on the jobs report pushed stocks higher, but the follow through is thus far not there. The action is not bad, i.e. resting after a surge. Will just need a catalyst before too long.

Productivity Tuesday was a big drag that is still working through the world markets. US productivity down 3 straight quarters, something that has not happened in 37 years. That 37 years ago was in the last great US protracted malaise. Fortunately that was near the end because -- we changed policies and went in a new, growth-based direction. At the same crossroads now. Productivity matters because it shows the stagnation in the economy. No investment, no innovation equals weaker companies, weaker jobs, weak, weak, weak output as the GDP shows.

Mortgage applications: +7.1%

Earnings beats: RL (increased guidance); DIS; YELP (increased guidance); FOSL; KORS (lowered guidance)

DB: Audits reveal the big European bank has a capitalization gap that is greater than its market cap. In other words, DB is massively weaker than even those negative on the bank thought.

JOLTS: Out at 10:00ET


OTHER MARKETS
Bonds: 1.52% vs 1.54%

EUR/USD: 1.1188 VS 1.1112

USD/JPY: 101.05 vs 101.927

Oil: 42.91, +0.14

Gold: 1361.90, +15.20


Futures are hanging in the same range for the past four hours. Another modest gain at the open as the market still shakes off productivity and looks for a reason for the bids to return. Third day of rest after a big move is when you start looking for the next move though the fourth day is very good. You want just a short fade then a renewed move to show the strength in the move.

Thus today could still be a sleeper and the market move still in good shape. Typically traders get antsy on the third day and that makes it the shakeout day. That gives the 1-2-3 pullback then the renewed move on the fourth day. I know it sounds stupid, and I know that the pros know this, but human nature is a hard thing to overcome.

So, we will try to be patient and let the move set up. That is the biggest factor for those who see the moves setting up: patience. Need to let them show the move is underway then make the move. Until then, just pretty pictures (at least pretty from a technical aspect).


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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