Market Alert - Pre-Market

Futures vs FV: SP +1.89; DJ +0.25; NASDAQ +32.81

Futures putting in a low to high pre-market, rising higher and higher toward the open with NASDAQ once again leading the way higher. Futures gapped lower but have steadily recovered.

This action indicates the market is going to fight to hang onto the relief moves, attempting to consolidate, and in NASDAQ's case, resume the rally.

FOMC Minutes: The news of the day that could upside the upside is the 2:00ET FOMC minutes release. Some are expecting discussions of 4 rate hikes for 2018 versus 3 hikes. If the talk if of 4 that could pall the upside though with the rebound's resilience it will have to show it.

The big question is whether we move into new upside on this pre-market low to high or wait out the FOMC release. At this juncture, given the history of these kind of events, you prefer to see a clear break higher or lower, and play that move. That said, there are some very interesting stocks that can take some of the lead in a continued upside move. We will be interested in picking up some of those positions though perhaps a partial or half position to start given the FOMC minutes to come.


Mortgage apps: -6.6% vs -4.1% prior. Refi's at a 4 year low, no surprise as the 30 year mortgage moves to a 4 year high.


Earnings beats: GRMN; AAP; LZB; TXRD (BL)

Misses: LC (TB); BYD (TB); RAC (TB). When they miss, they are missing both top and bottom line.


OTHER MARKETS
Bonds: 2.884% versus 2.893% 10 year. Bonds rally back a bit more pre-FOMC minutes

EUR/USD: 1.2313 vs 1.2341

USD/JPY: 107.52 vs 107.40

Oil: 61.50, -0.29

Gold: 1331.20, 0.00


Futures continue the rise to the bell. Again, the FOMC minutes could prove a market turning event if they are significantly more hawkish than expected. Still, that people are talking about the FOMC possibly discussing 4 2018 hikes is part of the adjustment to the notion that can happen. Thus, such talk may cause a pause but perhaps not a roll over.

The big question still presented is whether the market breaks higher for more recovery, or breaks lower from this pause to resume the selling. Thus far the upside is showing resiliency for a test to higher resistance levels.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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