Market Alert - Pre-Market

Futures vs FV: SP +7.88; DJ +63.09; NASDAQ +25.32

Futures rebound from the Monday drubbing. Started higher early morning, continued rising to 8:00ET. Over the past hour futures are backing down, coming well off the highs.

What do upside futures mean? Not much. It is a snap back move, similar to the covering bounce late Monday. It likely does not last, does not turn into a new rally, at least today. The sellers returned Monday, though not a huge number of sellers as shown by the NYSE volume. Even if sellers were lower in numbers, the buyers were not there, and thus it is hard for a rebound to sustain unless they return. The upside will have to deal with sellers taking a shot at the early rise.

SP500, DJ30 have the 50 day MA's overhead as they try to bounce. DJ30 is in that pennant/triangle, trying to come off the lower trendline. Overall the action is weaker of course as leaders test, hold on, but are unable to push their good patterns. The market's negativity is feeding on itself; if the leaders can hang on that bodes well for a rebound in the future, but it has to work through the current negative feedback loop and that can take some time.


FOMC: Day 1 in the FOMC rate hike meeting.


FB: Still struggling as it says it is 'beyond disturbed' by the data scandal. Sure it is, because that is its business (data) and it does not want to be regulated. But, this data gathering about each of us has to be curtailed. It is impossible to be part of society without going online, but everything you do is monitored, collected, collated, analyzed, commercialized, etc. Laws have to catch up to the technology; we have to be able to opt completely out. It is true someone could hire someone to follow you around and figure out your habits, etc., but the cost would be high. To do it to the entire population would require an army of investigators -- hey there is a jobs creation idea -- and thus not feasible. Electronically, however, it can be done for pennies. There will need to be a balance struck and Zuckerburg is going to get to explain why they are so virtuous ('we are just a social media platform, nothing more' he will say in trying to con lawmakers) as the UK is already calling him to testify.

FB is lower and this issue is one that is going to impact GOOG and others (AMZN?) as it unfolds.


Tariffs: Still an angst areas for markets. It is difficult and requires stamina to change the status quo of other countries getting to impose tariffs on anything they want, dump products, etc., but the US cannot do the same. As I have said before, we allowed other countries to establish their industries by uneven trade deals, and now that those were successful and the industries are established, we want to have them removed. But they won't change their practices. So, when we ultimately decide to take action on our side because they won't change, suddenly we are the bad guys. After helping them get their industries up, we are now the bad guys.


OTHER MARKETS
Bonds: 2.879% vs 2.852%

EUR/USD: 1.2281 vs 1.2342

USD/JPY: 106.51 vs 105.95

Oil: 63.06, +1.00

Gold: 1310.70, -7.10


Futures continue to fritter away the morning gains moving into the open. Does not look as if this bump has much umph behind it.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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