Thursday, December 13, 2018

Market Alert - Pre-Market

Futures vs FV: SP +10.62; DJ30 +71.73; NASDAQ +47.29

Well, stocks are trying again with futures modestly higher early, then a build higher over the past 1.5 hours to morning highs. Not blowout upside but solid upside with growth such as NASDAQ leading. For the upside it is a bit encouraging that the stickiness of this low remains and that the indices are still trying to build higher from it. The key will be whether they can actually start holding these moves.

It is interesting that growth continues its attempts to lead (though thus far failing) as NASDAQ and NASDAQ 100 still sport something of inverted head and shoulders patterns, a pattern that has consistently yielded upside for 9 years. DOCU sports that pattern after a selloff from August -- at the bottom of a cup base the inverted H&S has been gold. We will see as now QE is over, the Fed is hiking -- very, very different times from the 9 years of Fed pumping the economy, the time period this pattern was so effective.

ECB: QE ends this month. Draghi says growth is slowing ahead and cuts the GDP and inflation forecasts. He believes the risks balance to the downside right now.

Jobless claims: 206K vs 228K exp vs 233K prior. Near 49 year lows.

Export prices, Nov: -0.9% vs 0.45% prior

Import prices: -1.6% vs 0.5% prior

Ex-oil: -0.3% vs 0.1% prior

Bonds: 2.895% vs 2.908%

EUR/USD: 1.1343 vs 1.1368

USD/JPY: 113.52 vs 113.37

Oil: 50.64, -0.51

Gold: 1246.60, -3.40

Futures are holding the gains toward the open, but that has not been the trick. The trick is whether they can hold for a session. Sure WED was up, but the indices gave back as much as they gained. They need to hold the lion's share of gains. We will see how some good patterns move and if they can hold them. Watching some leaders such as DATA, TEAM, VMW (all software) along with the 'Dow-like' stocks like big pharma, personal products -- what appetite the market has (growth versus more defensive) AND if those areas that do move higher hold the gains.

Jon Johnson, Chief Market Strategist

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