Market Alert - Pre-Market

Futures vs FV: SP +8.35; +94.30, +47.17

Futures gapped higher at the early morning open, rallied farther, then over the past 3 hours have come back to the gap point. One of those opening gaps that gives a shot to anyone wanting to sell. Where the Monday gap was likely one with staying power, this one is not so solid, an after effect of Monday, and it has faded some off the gains. That is why most prefer a softer open that builds into gains yet again, and why many traders prefer to trade off a test of this kind of gap versus buying the opening moves. Dilemma given the rallies Monday put many stocks near buy points.

Why up? The Trump 'happy' tweet as some are putting it. Trump tweeted that negotiations were ongoing with many countries that have taken advantage of the US' trade largesse, and in the end all will be happy. What more could you need? Gap stocks higher. Again, however, there are no solid deals, just talk about ongoing negotiations. Sold on bellicose talk about trade wars -- Trump's style that the market has not figured out yet -- rallying back on a mitigating tone only with no one saying any deals were imminent. Not the strongest leg to stand upon.


FB: FTC is starting a data use probe. BAC cuts FB rating. Zuckerburg declines to speak in front of the EU. After watching him on TV last week it is no wonder. He is not a dynamic speaker. Indeed, he comes across as rather mousey.


Earnings beats: MKC; INFO; FDS; RHT


Case/Shiller, Jan (yes, Jan): 6.4% vs 6.3% exp vs 6.3%


OTHER MARKETS
Bonds: 2.830% vs 2.854%. Bonds rallying

EUR/USD: 1.2388 vs 1.24494. Dollar stronger after the Monday break higher by the euro, trying to move out of the range.

USD/JPY: 105.71 vs 105.473

Oil: 66.22, +0.67. Trying to get past the prior high

Gold: 1342.00, -13.00. Giving back some of the Monday break higher.


Futures are hanging in at the morning gap point. Recall that Monday even that strong gap was tested into midmorning. Given the big rainbow action of this futures gap this morning, we are inclined to see if the opening bounce is tested as well. LRCX is set to gap 4 points, NFLX 2 points -- not huge, but big enough to see if they fade a bit. NTNX, TRIP look pretty good on the close and are not gapping too much. Still looking at possibilities.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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