Market Alert - Pre-Market

Futures vs FV: SP +3.98; DJ +81.12; NASDAQ +2.77

Futures started higher, sold off, and have trudged back up near early morning highs. Better action than WED as futures have had to move higher on increased bids versus that gap open that holds for sellers to shoot at. Of course, the market will open higher, and that still gives sellers a higher price to sell, so bids still have to hang in.

An interesting session as it is something of a rubber match after the Tuesday gap and higher volume reversal followed by the WED much easier session. The market has shown these reversals before only to have the sellers vacate shortly thereafter. This one warrants a bit more caution in our book given the patterns outside NASDAQ, SOX. There are good patterns in those indices that are very enticing and we will see if they decide to lead higher.

Earnings beats: WSM; DDD

Misses: DG (but buyback increase, increases same store sales); ADT (BL).

DG has built stores like crazy in the US. The biggest expanding retailer during the prior administration as its cheap items in smaller towns was about the only growth market. The missed earnings is a result of that expansion. Now it shows if it was a good move.


Empire PMI, March: 22.5 vs 15.0 exp vs 13.1 prior

Philly Fed, Mar: 22.3 vs 23.7 vs 25.8 prior

One on the upswing, one missing and moving lower, but both still very solid. One month is just one month. The trend is still up, but Philly does show some of that soft patch softening discussed last night.


Dodd-Frank: Rollback of certain provisions passes the Senate.


OTHER MARKETS
Bonds: 2.819% vs 2.819%. After rallying, bonds start today flat

EUR/USD: 1.2339 vs 1.2364

USD/JPY: 106.02 vs 106.33

Oil: 61.35, +0.39

Gold: 1320.30, -5.299


Futures hold modest gains, not too strong, definitely not showing sellers piling on. That is the key: what do sellers do? If they do not assert themselves again, there is enough natural buoyance in the market to rise. What the upside really needs is for the tech and chip leaders to move up off their good patterns, but they are at the channel tops. Thus what the market really needs is for new leadership. China? Perhaps. Drugs could also help more, but there are not many new areas coming up.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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