Search This Blog

Tuesday, February 6, 2018

Market Alert - Pre-Market

Futures vs FV: SP -47.59; DJ -539.75; NASDAQ -53.67

Futures are bouncing around in a range since hitting bottom at 7:00ET. A definite range in place, just hitting the top and backing down a bit. For reference futures were rising at 3:00AM but then sold off to 7:00ET. DJ30 was down 750 points at the lows.

This is the lower open we felt would come based upon the historical moves in the market. Now the issue is when it tries to put in the low and rallies. It looked to be happening pre-market and that was not good: you want it to plunge on the open and then head down more.

That may be exactly what happens. The XIV is a volatility ETF vehicle people use to sell volatility to take premium like selling puts on stocks. Now that volatility is spiking the ETF is diving, losing 90% Monday. As an ETF it is forced to sell when certain events hit so there could be a lot of forced selling in the first hour of the market.

When that is over the market likely bounces. After that, however, there could still be up and down. We are really interested in the close as that tells more, but also we will be looking at the big names from last night's report as opportunity near term because we are treating this as a relief rally -- assuming it shows up.

That does not mean you cannot put cash to work in your longer term accounts just picking up some stocks you want, but we are not going to just go in and spend a lot of money; you can allocate some, but remember there is likely another downside event in several weeks that tests these lows.

GDP: Trade balance the widest since 10/08 on imports. We are feeling good and buying imports; that is what we do when we feel better. That hurts the GDP but we know things are better

Dollar: Proving a safe haven as it tries to erase all losses since Mnuchin's comments at Davos.

Bonds: 2.753 vs 2.707

EUR/USD: 1.2354 VS 1.245

USD/JPY: 109.39 VS 109.09

Oil: 63.46, -0.69

Gold: 1337.60, +1.10. Gold not surging, not that much fear.

Futures are still near the top of the morning range but that means a lower open. We are somewhat wary of a move higher immediately at the open. It may be the low, but would not be surprised to see the open move higher then sell again into midmorning-ish. We will see, we will be ready to try to get some decent entries on those stocks we are looking at.
Jon Johnson, Chief Market Strategist
Alert Key


Customer Support:

No comments:

Post a Comment