Market Alert - Pre-Market

Futures vs FV: SP +17.33; DJ +232.41; NASDAQ +38.18

The afterhours ABC story retraction, the weekend passage of the Senate tax reform/cut/? bill has futures surging back upside, reclaiming what was lost and more.

The surge has many now -- now -- saying DJ30 could hit 25K this year. Welcome to the party; we made that call a month ago. Oh well, that is the beauty of this: you look and see how the market is setting up, how the leaders are setting up and you buy when the stocks say 'buy' while most are dancing around as if they really have to go to the bathroom. Then when they decide it is safe to buy, you are in and they just push your positions higher. Cool.

There are positions out there we still want to get into or more into, and we will have to see how they act and what kind of entries they show. GOOG at the 50 day EMA, SQ in a nice pullback, etc.


M&A: CVS buying AET in what is considered an AMZN threat preemptory move.


Taxes: Larry Summers says by cutting taxes, 'thousands will die.' So, this is rock bottom in terms of political speech. I thought it was getting close.

The bills now go to Conference Committee to work out the differences, one of the biggest being effective date of the corporate rate cut (Senate 2019, House 2018) -- history shows do it now so the investment is made now, economic activity rises, jobs created, more tax revenues sooner. History is clear; the heads of those in charge are not.


OTHER MARKETS
Bonds: 2.388% vs 2.363%

EUR/USD: 1.1844 VS 1.1889

USD/JPY: 112.94 vs 112.10

Oil: 57.80, -0.56

Gold 1276.70, -5.6


Futures gapped up and have held the gains all morning. For sure the open is up, then you see how that move holds and what kind of test ensues and what kind of entries you can get on the rebounding stocks or indeed those that did not sell off but simply built good patterns and are ready to move.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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