Market Alert - Pre-Market

Futures vs FV: SP +5.81; DJ +36.36; NASDAQ -0.71

Futures bounced higher roughly 2 hours back and are now trading near session highs. NASDAQ again lags as it and other growth indices have suffered the worst losses of late. Now a modest bounce attempt. Too bad. A further blow downside would likely set up a rebound. It could still come: pre-market indications have meant nothing the past two sessions.

Q3 Productivity, Prelim: 3.1% vs 1.8% exp vs -0.2% prior (from -0.6%)

Year/year: -0.04%. The first year/year back to back drop since 1993.

Unit Labor Costs: 0.35 vs 1.2% exp vs 3.9% prior (from 4.3%)

UK: High Court rules Parliament must vote on Brexit before PM can act. Talk about the ultimate hypocritical government overreach: a representative government has the people vote on the issue to make sure it got the country's real view and the government rules the government has to make the decision. Welcome to the new forms of democracies, republics, and other representative governments that are in name only.

Earnings beats: FB (warns of slowing TL?); QCOM, CHK, WFM (BL, TL in line)

Misses: CHD; WYNN; FIT (TL); FSLR (TL)

WFC: SEC is investigating, WFC increases loss reserves to $1.7B from 1.0B.

Odd 'strong' economy signal: Auto repossessions are at the highest levels since the 2008 recession, and if you don't include that, they are the highest in 20 years at 1.6M in 2015.

Gun sales to surge more? Iran says it is sending 'elite' forces to the US and Europe. Guess we will all have to arm up to defend ourselves while we can.


OTHER MARKETS
Bonds: 1.817% vs 1.797% 10 year

EUR/USD: 1.1085 VS 1.1095

USD/JPY: 103.199 VS 103.415. Dollar continues to test the last surge.

Oil: 45.72, +0.38

Gold: 1293.10, -15.10. After surging Wednesday, purging that move.


Well, a further selloff would have been the best for a rebound rally, flushing SP500, SP400, RUTX to the 200 day MA and getting them really oversold. As it is, the open looks up but hesitant. That as noted above, however, does not mean much of late as futures bear little resemblance to the actual market trade.

Still have some excellent upside setups and would like some upside before we get into many more downside, but with several of the indices hanging in limbo above the 200 day, the setup is not as good. Thus we will see just how this modestly higher open holds. Could be a situation where there is an early bounce attempt that rolls over, sells hard, and THEN provides the reversal. If so, we take some downside where we can then look upside if those patterns held and then start to make the move higher, e.g. LRCX, MAN, PYPL, MLNX.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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