Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally suffered heavy losses for the second week in a row, as Federal Reserve Chairman Jerome Powell said on Friday that more “pain” was needed to bring down inflation.
The main indicators were sold off on Friday, heading towards the 50-day moving averages. Several stocks flashed buy signals on Thursday, such as Axelis Technologies (ACLS), retreated on Friday. some like steel dynamics (STLD), did not.
Investors should be cautious about increasing exposure as the market continues to decline. They may need to pull back if they become too exposed or have bought extended stocks in recent days.
However, the current “pain” of the market rally may create opportunities for significant gains, although it is unclear when that will be clear. A number of stocks are forming handles, while others are working on grounds or perhaps tracking bullish pullbacks.
apple (AAPL) And the Arista Networks (Network) Forged handles in the last undo. Apple and Arista stocks are no longer fully extended from the major moving averages. Meanwhile, Tesla stock is trading tightly around some key levels.
ACLS and Steel Dynamics stock in operation IBD Leaderboard. STLD stock is running too SwingTrader. Share ANET and Tesla (TSLA) is on defect 50 existing. Arista and STLD stocks are located in Big Cap 20. Arista Networks It was Friday IBD stock todaywith Apple and Steel Dynamics shares, the previous two days’ picks.
Meanwhile, China’s stocks Bindudu (PDD), Baidu (Baidu), BYD (BYDDF), New (NIO) And the Lee Otto (LI) in focus next week with major news releases. US-listed Chinese stocks rebounded on Thursday, at times strongly, on the back of a report of an impending audit agreement between the US and China. The tentative agreement, which was confirmed on Friday, should end delisting concerns.
PDD and Baidu stock in particular have shown an upward movement, but they have earnings early next week. Tesla’s EV rivals BYD, Nio and Li Auto need some work, but they’re worth a watch.
Dow jones futures contracts today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
ETFs in the Dow, S&P 500 and Nasdaq 100 all fell modestly Friday night, as selling pressure continued.
stock market rise
The stock market rally fell dramatically last week with some positive actions held back by Monday’s dip and the heavy selling that occurred on Friday after Powell’s speech.
Powell’s short but unkind speech by Jackson Hole on Friday emphasized the lesson of the 1970s for policymakers not to let their guard down quickly. The Fed chief said the US needed a “sustainable period of growth below the trend”. It would mean some “pain” for families and businesses, he said, but the alternative would be “much more pain”.
Bottom line: The Fed will raise interest rates further, and keep them there.
The Dow Jones Industrial Average fell 4.2% last week stock market trading. The S&P 500 lost 4%. The Nasdaq Composite lost 4.4%. Small capital Russell 2000 decreased by 3%.
The 10-year Treasury yield rose about 5 basis points to 3.035%, the fourth consecutive weekly gain.
US crude oil futures rose 2.9% to $93.06 a barrel last week.
between the Best ETFsThe Innovator IBD 50 ETF (fifty) rose 1.65% last week, while the Innovator IBD Breakout Opportunities ETF (fit) lost 2.2%. iShares Expanded Technology and Software Fund (ETF)IGV) is down 5.2%. VanEck Vectors Semiconductor Corporation (SMH) decreased by 5%.
SPDR S&P Metals & Mining ETF (XME) increased 3.4% last week, with STLD stock holding significantly. Global Infrastructure Development Fund X US (cradle) down 2.5%. US Global Gates Foundation (ETF)Planes) decreased by 2.1%. SPDR S&P Homebuilders ETF (XHB) fell 5.1%. SPDR Specific Energy Fund (SPDR ETF)XLE) by 4.3% and the Financial Select SPDR ETF)XLF) 3.6%. SPDR Healthcare Sector Selection Fund (XLV) fall 4.2%
Shares reflect more speculative stories, the ARK Innovation ETF (see you) fell 4.1% last week and the ARK Genomics ETF (ARKG) rose 0.7%. Tesla shares are principal ownership via Ark Invest’s ETFs. Cathie Wood’s Ark also owns some shares of BYD and Nio.
Apple stock fell 4.6% last week to 163.62. Friday’s loss of 3.8% pushed the iPhone giant below its 21-day moving average. AAPL stock now has 176.25 buying points on its base going back to the beginning of the year. The Relative force line, the blue line in the graphs presented, recorded new highs. On August 17, when Apple’s stock reached its most recent high, shares closed 16.1% above the 50-day line and 8.9% above the 200-day line. They are now only 1.7% and 5.9% above those respective levels.
Arista stock fell 5.4% to 123.03 last week, below its 21-day moving average. The stock now has a buy point with a handle of 132.97 at double bottom base. ANET stock is up just 2.7% above the 200-day line versus 10.5% on August 18. The RS line hit a record high on the weekly chart.
Arista’s earnings and sales growth accelerated over the past three quarters by 59% and 49%, respectively, in the second quarter.
Tesla stock fell 2.9% this past week to 288.09, closing slightly below the 21-day streak after trying to stay above the 200-day streak several times. A decisive recovery of the 200-day line, perhaps above 314.64, will provide a strong entry. But make no mistake, TSLA’s stock will still be low on base, well off the official buying point 402.73.
Tesla on Friday began selling a new low-end Model Y to Europe, with a shorter range but at a much cheaper price. Prices vary greatly from country to country, which lowers the Model 3 in some countries.
The next few months will be fun for Tesla. Its production capacity has increased dramatically for its no longer new lineup, while competitors – including BYD and Nio – are introducing new models and increasing EV and overall vehicle production.
Pinduoduo will report earnings before opening on Monday, while Baidu is up and running early Tuesday. Both PDD and Baidu stock rebounded above the 50-day and 200-day lines on Thursday, providing early entries. They both gave up some of those gains on Friday, but were sharply higher for the week.
PDD is bottoming out at an official buy point of 68.81 points.
Baidu stock is consolidating for 10 months with 182.70 buying points. But the arrows are around a long, downward sloping trendline. Also, investors can look at the measure since late June as its base, with 156.87 buying points.
BYD is likely to report earnings next week, after giving strong preliminary results for the first half in mid-July. In the next few days, the Chinese EV and battery giant should start delivering the Atto 3 in Australia and start delivering the Seal sedan in China.
Nio will launch the ES7 SUV on Sunday, with the ET7 sedan a month later. Li Auto should start delivering its luxury L9 Hybrid sports car before the end of the month.
Li Auto, Nio, and Exping (XPEV) You will report the August delivery on Thursday, September 1, with BYD a day or two later.
BYD stock and LI stock find support around the 200-day lines, retreating significantly after hitting June highs.
Nio stock is just below the 50-day line within a 200-day bottom base. A strong move above the 50-day line may also include a downtrend break at the base, providing an early entry. But the 200 day line which is still falling rapidly is looming as resistance.
Market Rise Analysis
The stock market rally showed some encouraging action at times during the week, especially on Thursday. But with Monday’s dip and the heavy selling led by Powell on Friday, the major indexes sold out heavily during the week.
Powell’s hawkish message was no surprise, but the market did not react well. The Dow, the S&P 500 and the Nasdaq have all pulled back below their 21-day moving averages and are now not too far from their 50-day lines – plus some big round numbers for both major indices.
Russell 2000, which had begun to move again toward the 200-day streak, pulled back hard on Friday.
Many of the blue-chip stocks that rose, especially on Thursday, fell back on Friday. ACLS stock, which jumped about 13% Thursday to break through, wiped out all of its gains on Friday. On the positive side, Steel Dynamics stock rose 0.1% on Friday, in buy territory after jumping 6.6% on Thursday.
Since indices bottomed in June, there has been concern that we are in the midst of a bear market. We still don’t know the answer, but it’s definitely “bears” watching.
Commodity stocks are doing relatively well, including energy, fertilizer and steel companies.
SMH and IGV ETFs are almost back to their 50-day streaks, as chips and software had a poor end to the week. ARKK is less than the 50-day streak.
Some former high-value technology leaders might make big new runs, but most likely won’t. After bottom catch surges 50%, 100% or more from bear market lows, many have sold out hard in the past few weeks.
What are you doing now
When the Nasdaq is down about 4%, you will likely struggle with the breakouts the day before. And that’s what happened to many of Thursday’s purchases, although they could come back again.
But investors may need to reduce exposure, especially if it has increased in the past few days and is now incurring some losses.
If the market shows some indication that it is ready to go higher, new buying opportunities will emerge, with Apple, Arista and Tesla among the possibilities. But investors should remain cautious, bearing in mind the risk of a quick fake head or resistance at the 200-day line.
In the meantime, there is a risk that the market will fall back to the 50-day line or worse. Depending on what follows, this step can create a number of settings or a difficult period.
So turn on your screens this week and rework your watch lists. Keep your exposure modest, at least until the major indicators move above the 200-day lines. Even while looking for new purchases, be prepared to expand even more aggressively.
Read The Big Picture Every day to keep up with the trend of the market, stocks and leading sectors.
Please follow Ed Carson on Twitter at Tweet embed For stock market updates and more.
You may also like:
“Hipster-friendly troublemaker. Communicator. Organizer. Devoted web lover. Unapologetic problem solver. Reader. Explorer. Travel guru.”