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Tuesday, October 10, 2017

Market Alert - Pre-Market

Futures vs FV: SP +6.02; DJ +59.93; NASDAQ +19.72

Monday slipped in with a lackluster session, moving from modestly higher futures to negative on all but SOX. Tuesday is attempting another upside session with futures up, this time throttling higher on the open to see if a stronger open can stick. Futures are thus far holding all their gains in a trend higher all pre-market.

Most of the news today is stock-centric and really benefitting those stocks.

WMT: After announcing 30 second returns Monday and leading the Dow gainers, WMT adds to that today with a $20 stock buyback over 2 years. It predicts online orders +40%. It will open 1000 spots for online grocery delivery. Full-on competition with AMZN, COST, TGT.

HON: Spinning off itself into different companies, keeping the aerospace as HON.

NVDA: Announces a fully autonomous robotaxi computer. The stock is set to gap 6.5 clicks higher, potentially wiping out our intended entry on the stock.

OPEC: Shockingly, OPEC is asking the US to curtail its shale oil production because it is lousing up OPEC's cash machine. It appears OPEC does not understand the US oil industry is not controlled, at least openly, by the government, and thus curtailing production is not just something the US government agrees to.

Ironic is it not? OPEC bullied the rest of the world for years with threats of higher oil prices and now it has to ask free countries to produce less lest the OPEC countries' standard of living falls. We are all crying over that. Our response should be: it should be a market. In a market each individual player must decide what production level suits them.

Politics: Trump/Corker continue feuding, Paul rejects tax proposal. Heard one analyst on Fox Business blaming the democrats for no tax reform. Really? GOP has Congress and Executive and cannot get it passed? Would not happen if the democrats had the same positioning. Oh, but the GOP has senators and reps with 'integrity' and 'respect for the process' and 'respect for the voter.' I forgot and almost got cynical.

Bonds: 2.361% vs 2.361%. Bond market opens to . . . flat.

UER/USD: 1.1784 vs 1.1766. Euro rebounds

USD/JPY: 112.43 vs 112.66. Dollar fades against yen

Oil: 50.10, +0.53. Nice rebound off the recent weakness following the test of the top of the range.

Gold: 1291.60, +6.60

Well, a 10 day EMA test certainly LOOKED quite plausible as of the Monday close, but this open is pretty solid and there is the kind of company news that creates endorphins for the heavy breather traders. Thus futures are at the highs and stocks are set to gap higher, cleaning Monday off the slate from the look of it. We will see what kind of entries we get and will also look at taking some gain.

Jon Johnson, Chief Market Strategist
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