Market Alert - Pre-Market

Futures vs FV: SP +12.75; DJ +162.01; NASDAQ +35.65

A busy data week (though not today) and a busy Fed week (Powell speaking to Congress TUES/WED), and stocks are higher to meet it.

Futures are not opening softer, instead gapped higher in the early morning and have held the gap all morning. That can mean two things. First, on top of the Friday rally stocks are gong to gap and continue running in the resumption of the relief move. After a 4-day consolidation last week stocks broke higher Friday. Though low volume, the move is in line with a continued relief move and today could simply be an extension.

Second, you have seen gaps higher get sold several times over the past several months. Does not mean the higher open will lead to a rollover, but there are sellers out there (this is a light volume recovery bounce still trying to recover the lost ground after selling on high volume) who could push back on a higher open.

We would use the latter as a possible entry for the upside positions that started higher Friday and are gapping higher today.

At the same time there are stocks that are in great position to enter even after Friday, and if they move, they provide good opportunity to enter.


Fed: Bullard, Quarles speak at the NABE today. Tues/Wed Fed chairman Powell gives the Humphrey-Hawkins testimony. New Fed chair, not Yellen, so yes they will be a lot of attention paid.


Buffett was on CNBC this morning and as usual they fawned all over him, giving him an open mic to tout his book, social agenda, etc. as he doles out his 'grandfatherly advice.' This guy has made a ton of money no doubt, but he is not giving advice to help you but to help him and his investors. Always has, yet people WANT to believe he is something more and thus he gets way too much clout with his investing 'advice' and in his commentary on social issues. He likes companies that dominate their markets and prefers monopoly-like companies in markets. His commentary and policy advice to politicians promotes the companies he invests in. If people realize that, then the balance is maintained. Unfortunately, the 'grandfather' image he has shrewdly developed hoodwinks most. Thus, when he is on CNBC for the 'Mornings with Buffett,' you kind of have to go elsewhere.

OTHER MARKETS
Bonds: 2.846% vs 2.866%

EUR/USD: 1.2308 vs 1.2293

EUR/USD: 106.85 vs 106.88

Oil: 63.31, -0.24

Gold: 1338.40, +8.10. Stocks are up and gold is up. What is wrong with that scenario if you buy the argument that bond yields are a major problem for equities.


Futures are holding tight in the range they have held for 5+ hours. Thus there is not a lot of indication of where the market goes. Not going higher than the gap, not going lower. It will take the market opening and trading into midmorning to show anything. Again, would not mind a bit of a pullback to present a better entry, especially given everyone is gushing about the 'new' rally. It is a new leg higher in the relief move, and we will see if it turns into a new bull rally.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
______________________________________
Alert Key
http://www.investmenthouse.com/alertkey.htm

PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.

Customer Support: http://investmenthouse.com/contact_us.php