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Tuesday, October 3, 2017

Market Alert - Pre-Market

Futures vs FV: SP 1.93; DJ 42.40; NASDAQ 8.33

No scheduled economic data pre-market. CNBC spent an inordinate length of time talking with Warren Buffet. He still believes in WFC so that company will survive.

M&A: Berkshire buys 38% of Pilot/Flying J truck stops; Walmart buying Parcel, an overnight/same day delivery service. Obviously still fighting hard with AMZN.

Auto sales: F 8.7% vs 4.7% expected
Chrysler: -9.7% vs -10.9% expected

EU: Barcelona, Spain 'paralyzed' by a strike after the Catalon vote showed 89% (of those who survived the beatings from the Spanish police and could still vote) favor secession. This is, in many eyes, a referendum on the EU even though the EU sees the vote as an internal issue for Spain. Yes, but the reason Catalonia wants out IS the EU.

North Korea: Lest we forget, it is still there and still a bad actor. It won't like that the US' focus has shifted to other matters.

DC: Hearings on EFX, WFC. Calls for gun control predictably start, but no offers of any solutions that will prevent what happened. The weapons were legally purchased by licensed dealers who were interviewed by the ATF before the sales. What is offered thus far has nothing to do with how this person acquired the guns. If something useful is to be done it has to get past the initial 'take the guns' versus 'over my dead body' arguments. Then it has to get, according to the Constitution, a state-approved amendment. Expect more. Of course.

Bonds: 2.357% vs 2.341%. Bonds off again after breaking below support last week

EUR/USD: 1.1751 VS 1.173. Euro rebounds some after dollar gains

USD/JPY: 113.04 vs 112.73

Oil: 50.28, -0.30. Still not finding a new bid after testing resistance.

Gold: 1272.50, -3.30

Futures are up modestly, basically holding modest gains all morning. Futures are not telling you much, but the market trend is up and the futures reflect that.

The pickle, the rub, is whether the algorithms decide that after 3 weeks of new highs and subsequent new highs through important levels, is it time to sell? Have not seen any indication of that yet, but watching. While we do, we see good patterns and good moves to play.

Jon Johnson, Chief Market Strategist
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