Market Alert - Pre-Market

Futures vs FV: SP +7.76; DJ +73.58; +20.54

Well, futures are going to try the upside to start a session for a change. The market, as measured by SP500, has just gone through the lowest volatility period since 1995. That obviously scares some as the billionaire bears, brokerages, and big banks provide the cases in point. Hey, it didn't make us comfortable either, but we keep seeing good stocks in good position to move higher. We will see if this early rise has staying power.

Oil: Lower as GS says the rebound in prices if fragile as anyone can ramp production and undercut talk of Russia/Saudi deals, etc.

Earnings: some excitement thanks to BBY. BBY beat top and bottom line with same store sales jumping. Been a long time coming and it is a nice development for the economy.

Misses: SJM. With a name like Smuckers, it's got to be good jam. But how about earnings? Not so good as it missed on the top line and is getting jammed lower.

M&A: Bayer talking buying MON

EU PMI: 51.8 vs 52.0 exp vs 52.0 prior

Germany PMI: 53.6 vs 53.5 vs 53.8


OTHER MARKETS
Bonds: 1.548% vs 1.54% 10 year

EUR/USD: 1.13381 vs 1.1323

USD/JPY: 100.04 vs 100.316

Oil: 46.96, -0.45

Gold: 1347.50, +4.10


Futures are hanging in as the bell approaches. Sentiment is buoyed by some better views of retail -- their charts have shown another round of improvement as money has rotated their way for a 3rd time over the past 9 months. BBY may help more money come their way again.

As noted, weeks of lethargy outside of SOX and to a lesser extent NASDAQ, RUTX has led to worry. It is turning into a situation where those shorting a dull market get ripped? Those 100% or otherwise predominantly negative going to get squeezed after I discussed the sentiment paradox last night? That topic came up not because of any great prescience, just that the timing for something to happen is getting ripe.

The things to watch: how the leaders move. C is up again and we wish we were in Monday as noted last night. That is okay, we can still do it. Okay, how do the leaders work? Do the big names come back in on NASDAQ? We have a new GOOG play at the ready.

Also, however, we have to be aware of that pattern of a sharp day of gains then a reversal and/or subsequent lethargy. Will the upside sentiment have staying power this time or is the half life still one session? You cannot gauge that necessarily on an intraday basis in one session unless there is an intraday reversal. What you do is look at the leaders in position, and if they are moving well we participate in them.




Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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