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Tuesday, April 11, 2017

Market Alert - Pre-Market

Futures vs FV: SP -3.51; DJ -9.02; SP -4.93

Futures traded off the early morning lows, but have slid back to those levels, trading just below the flat line. After an early upside move failed on Monday, futures are not seeing many bids today. So, the market tries a softer start to see if the bids return. This with SP500, DJ30, SOX still over the 50 day MA in the test, NASDAQ trying to hold the 20 day EMA as a higher low, RUTX and SP400 trying to get a more positive look.

News is more of analyst actions today as DIS is a 'strong conviction' at GS, WDC upgraded. JOLTS comes later in the morning, but not a lot of stock-related data early.

A lot of the news continues on the geopolitical front with Russia saying it has trusted intelligence that some false flag chemical attacks will occur to try and blame Syria. That is a morass of conflicting stories and the likelihood of it getting cleared up soon don't appear that great.

China has moved 150K troops to the NKorea border as a US naval battlegroup moves toward the Korean peninsula.

G-7: Could not agree on sanctions for Russia.

AAPL: A report out of Germany says that Dialog Semiconductor could be losing its AAPL contract (70% of Dialog's business) as AAPL is trying to make those chips in-house after taking quite a few Dialog employees over the past year. Is this a fate for all AAPL suppliers such as SWKS, QRVO, MXWL, etc? QRVO is off a point pre-market, but for others it appears that Dialog's loss is the gain for others as MXWL is up almost a point pre-market.

Bonds: 2.336% vs 2.36% 10 year. Pretty sharp break in bonds that could push TLT to a breakout over the 200 day MA.

EUR/USD: 1.0612 VS 1.0594. Dollar selling.

USD/JPY: 110.417 vs 110.704. Selling against the yen as well.

Oil: 53.03, -0.06

Gold: 1264.60, +10.80

It would appear that all of the markets are backtracking from a more bullish look. Bonds are trying to break higher. Gold is back up. Oil is off. Stocks are off a bit. All of those indications are not bullish on the economy, something that, as noted last night, has been shoved back as geopolitics takes the front page.

Today we have to see if the bids return and not only keep the indices at their support but can push the break. There are no catalysts for the upside from the look of it, so it will just have to be old fashioned bids.

Jon Johnson, Chief Market Strategist
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