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Monday, July 9, 2018

Market Alert - Pre-Market

Futures vs FV: SP +11.23; DJ +114.52; NASDAQ +42.17

Stock futures gapped open early and have held the gap. This continues the 'significant' moves from last week that started Thursday with RUTX and continued Friday with NASDAQ, SP400 and yes, SP500. Will today be significant as well? You can only have so many significant moves, right? After that it is semantics. Thus, a continued move higher would be in line with the significant move last week. Talk about semantics.

If DJ30 and SOX can make a significant move themselves, well, that is the next phase, right? Financials showed some upside Friday but it was nothing that technically compelling. Chips showed some flashes of greatness, e.g. AMD, but many in the group just bounced. The market needs to get all indices moving ahead, and these two are the next ones to watch. NOT that you can assume NASDAQ, SP500 are locks to continue higher.

Basically there is a vacuum of news to start the week and that keeps the momentum going.

CPI is later this week and given prices, lack of labor (with 95+M working aged people out of the workforce), energy, that could generate some interest.

China: Stock market rebounds. All must be well in trade. Sure. For today.

UK: 3 Brexit ministers quit Sunday. Going well for Maye.

SBUX: Ditching plastic, one-use straws by 2020. I feel better already.

Bonds: 2.851% vs 2.824%. Bonds fade some, yields bounce

EUR/USD: 1.1777 vs 1.17439. Euro continues a bit of a rebound.

USD/JPY: 110.46 vs 110.474

Oil: 73.97, +0.17

Gold: 1264.50, +8.70

Futures are flat-lined for the past 2 hours. These gaps upside or gaps lower that are not trending are always question marks. Perhaps not as much in this situation as the market made a significant move last week and is working on extending it. Sellers may take a shot at it or some profit taking may occur in the morning session after the open, but most sellers are at bay right now, waiting on earnings season to re-up their efforts. That is what pre-earnings moves are all about: a dip ahead, a move higher into results, and then the chaos that often follows the results.

Not a lot of upside built into this move yet, so there is still room to run and we will continue looking at good moves from our plays for new entries.

Jon Johnson, Chief Market Strategist

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