Market Alert - Pre-Market

Futures vs FV: SP -21.03; DJ -262.91; NASDAQ -53.29

Stocks are set to open substantially lower, but they are off their morning lows hit 2 hours back. Rebounded then started to tail off again 30 minutes back. Don't want to see any buying/bid action now. Want to see it head hard lower and start hitting gut-check levels. 

No new news to trigger the events. WFC is down after the Friday afterhours penalties were announced by the Fed, and several have downgraded the stock. Thanks for that.


M&A: AVGO ups the ante for QCOM to $82/share, $60 in cash.


Yellen: In her last interview she said that stock and real estate prices were 'high.' Oh, thanks for that as well. Asset values okay, keep rates low low low during her reign, then when walking out the door note that asset values are high.  If she gets a pension for her work she should lose it.


AMZN: Settles with France over a tax issue. Good news, but on a day like today . . . 


Smartphones: last quarter globally was the largest decline in demand on record. Maybe a bit saturated and makes sense given the phone X did not live up to expectations. AAPL learned a marketing lesson that I talked about when it released the iPhone 8: I questioned if AAPL was acting a bit arrogantly with the bang-bang releases. It was.


Debt ceiling: Bond prices are surging, giving the debt limit new imperatives to get things resolved. It is feeding on itself: the higher yields go the more worry, the more worry the higher yields go.


OTHER MARKETS
Bonds: 2.841% vs 2.841%. Tired of selling for a few moments

EUR/USD: 1.242 vs 1.2458

USD/JPY: 109.84. Bounced last week, now can the dollar continue off the bottom of the trading range. Important initial bounce and test coming.

OIl: 65.07, -0.38

Gold: 1340.00, +2.40.  Gold was down Friday, kind of indecisive today


Futures are fading back toward morning lows. This is the scenario of a Monday/Tuesday selloff, and now you look for a further sharp selloff and if the market can reverse to a doji close today, preferably Tuesday for an intraday reversal Tuesday. That would be a decent buy signal to start picking up some positions.

As for downside on STM, UTX, we will see how they open and if we can put a bit of money to work on those just to see if we can hit a trade or two downside.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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