Market Alert - Pre-Market

Futures vs FV: SP +1.18; DJ +0.32; NASDAQ -0.59

Flat to start this session after a solid rally Wednesday on the open cratered. The same issues dog stocks: NVDA and other leaders are under pressure as selling for the fund rebalance continues.

Jobs: S bringing back 5,000 while OneWeb is creating 3K 'high level manufacturing' jobs in the US (according to its CEO). There are naysayers and cheerleaders, but it is all about making the US a place companies want to invest in once again.

Jobless claims: Opposite direction continues.
Claims: 265K vs 263K exp vs 275K prior.
+6% post-election, the largest increase in claims since May 2009.

Bonds: Bond rally continues, indicating the stock/bond fund ratio rebalance continues as expected.

Syria: Ceasefire agreement said to be reached. Again. We will see if it lasts just hours. Again.


OTHER MARKETS

Recent trends reverse as the fund rebalance takes place.

Bonds: 2.49% versus 2.51%. Bonds continue to rally as the rebalance continues.

EUR/USD: 1.0457 vs 1.0411

USD/JPY: 116.82 vs 117.098

Oil: 53.97, -0.09

Gold: 1146.70, +5.80


More of the fund rebalance continues and that has stocks at best flat as they struggle to hold ground gained while funds sell stocks and buy bonds to get their portfolios at the stock/bond ratio they promise their investors.

That action has the rally leaders still under some pressure, including the likes of NVDA and some other chips. NVDA is going to open around the 10 day EMA; we will see if it holds or folds there and consider selling some $105 strike calls for a fade to the 100 or 95 level.

We have several well-positioned plays awaiting the market to get through this period. While they wait, we manage positions, preferring to let positions work as long as they hold their patterns but also taking option gain.

It will be interesting to see if any bids return from a softer open, but not counting on it given the macro issues that are forcing some selling. That selling, however, will likely lead to new buys but we have to get there.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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