Market Alert - Pre-Market

Futures vs FV: SP +29.41; DJ +250.28; NASDAQ +75.24

And I just thought the market was setting up for a bounce . . . Everyone knows the news about the FBI reviewing 650K emails, a massive amount more than it looked at over months of prior investigation, in a few days and again acting as legislator, prosecutor and court in finding no culpable activity. Markets love anything diminishing possible controversy (though the longer term ramifications of these actions are anything but calming in terms of the controversy to come) and are surging as the worry is released.

Oil: Two events stand out today. First is a 5.5 magnitude earthquake just 4 miles below the surface near Cushing, OK, the massive oil storage facility. Second is renewed hope that somehow OPEC will cobble together a supply cap agreement.

M&A: NILE being taken private.

EU: Retail Sales, September -0.2% vs -0.3% exp vs -0.2% prior
Year/Year: +1.1% vs +1.2% prior

There is a relative dearth of scheduled economic data with consumer credit out at the market close.


OTHER MARKETS
Bonds: 1.81% vs 1.778% 10 year. Rallying yields after some fear last week. Bonds are still in a downtrend.

EUR/USD: 1.1061 VS 1.1145. Dollar rallying.

USD/JPY: 104.086 vs 103.089. Dollar rebounding after a pullback.

Oil: 44.60, +0.53. Rising on Cushing earthquake and renewed hope for an OPEC production agreement.

Gold: 1287.10, -17.40. Gold giving back the rebound.


You have to love investing when the government and its institutions get heavily involved in our lives. There certainly won't be any further shakeout this Monday morning as stocks are set to gap sharply higher. That will pressure the downside plays and gap many upside potential plays past the entry points. We will see how the move holds, but the futures are rock solid after gapping higher and unlike last week's sessions when they really had no conviction, this news is different.

Thus they likely hold their moves -- at least for today -- until some more concrete news emerges. It may take until after the election. We will see how our downside plays trade, i.e. if they move above resistance or rally up to resistance and stall. For upside we let what we have work and will see if we can get good entries on any new positions. That said, for the upside we will be very judicious: it could be this rush higher struggles with the election and results and we may get better entries. Still, if we see good setups that allow for good enough entries, we can pick up some positions.





Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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