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Monday, September 10, 2018

Market Alert - Pre-Market

Futures vs FV: SP +13.02; DJ +113.46; NASDAQ +39.49

A lack of news over the weekend and Monday. The release of pressure is bouncing US stocks in relief after the 'longest losing streak since January 2016' hits the rest of the world. Beware US investors -- the powers that be do not like it when the US gets significantly stronger, economically and in its markets, than the rest of the world. In the late 1990's that happened and the world order decided to hobble the US and in so doing crashed the stock market, then the economy. The US had no investment for 3 years and many high tech jobs left the US never to return.

Okay, happy Monday morning! That opening paragraph is just a reminder that when everything looks great, you have to watch for in your ear as Shoeless Joe Jackson told Moonlight Graham in 'Field of Dreams.' It is, after all, the tenth anniversary of the financial crisis.

Near term the US stocks indices are ready to bounce with many of the leaders that sold back the prior week bouncing early, e.g. AMZN, AAPL, NVDA, even TSLA. Futures gapped higher at the open and have pretty much traded in the same range ever since. These gap opens are always somewhat concerning, but if leaders such as AMZN are ready to move higher after a test, you don't want to wait too long.

Lots of data again this week but it comes later.

Financial crisis: 10 year anniversary

AAPL: Trump tells AAPL to makes its products in the US to avoid impacts from China trade issues.

Trade: No further word on the $267B additional tariffs Trump pondered Friday.

GOP: Unveiling new tax cut proposals, planning on doing so ahead of midterms. That needs to include items to reduce the health insurance cost. Those costs are still high as the ACA is still there, crushing middle class families with insanely high and ever increasing costs.

AMZN: Citigroup ups price target from 2100 to 2250.

Bonds: 2.944% vs 2.941%

EUR/USD: 1.16061 vs 1.1552

USD/JPY: 111.16 vs 111.05

Oil: 68.12, +0.37

Gold: 1200.60, +0.20

Futures are holding the gap gains, again as there was no more news on tariffs discussed Friday that hampered the market. Is this a gap to buy? You almost have to with AMZN and other leaders. This even as Art Cashin this morning talks of a near term top for stocks here, citing the Goldman indicator among others. It is the old pessimism versus market setup. While gap opens such as this (gap to a range) are not our favorites, we will be looking at AMZN and friends that are coming off nice tests last week.
Jon Johnson, Chief Market Strategist

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