Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures.
The stock market rally showed divergent action on Tuesday, with the Dow rebounding, the Nasdaq falling and the S&P 500 somewhere in between.
On the bright side, the giant Dow Jones Caterpillar (CAT), deere (FROM), WE HAD (WE HAD), Freeport-McMoRan (FCX) Y Schlumberger (VMS) are industrial, metallurgical, mining and energy sets on or near buy points. Underlying commodity prices rose solidly on Tuesday, helped by China continuing to roll back Covid restrictions.
Dow Jones Futures Today
Dow Jones futures were up a fraction against fair value. S&P 500 futures rose and Nasdaq 100 futures were skewed lower.
The stock market rally had a mixed session, with metals and industrial stocks holding up or rising as growth rallies struggled.
The Dow Jones Industrial Average advanced 0.1% on Tuesday stock trading. The S&P 500 Index fell 0.4%, with Tesla shares the worst performer of the day, followed by Moderna and Nvidia. The Nasdaq Composite fell 1.4%. The small-cap Russell 2000 shed 0.7%.
Apple shares sank 1.4% to 130.03. Intraday, AAPL reached as high as 128.76, simply undermining its bear market low.
Tesla shares fell 11.4% to 109.01, its worst one-day loss in 11 months, amid the Shanghai plant closure. weak China sales data and other news. TSLA shares have now plunged 44% this month alone to the lowest levels since August 2020. Volume has been very high all month, indicating an institutional sell-off. TSLA shares fell slightly in extended trading.
Nvidia shares fell 7.1% to 141.21, breaking below its 50-day line. NVDA shares are down 19% from their December 13 intraday high of 187.90.
MRNA shares sank 9.5% to 180.17, falling below 188.75 mug with handle point of purchase, according to MarketSmith Analysis. Moderna shot off that base on bullish cancer vaccine trial data on December 13, rising 20% that day and hitting 217.25 in the following session. But MRNA shares have achieved a rise of 15% and more.
ENPH shares fell 6.6% to 274.54, now well below the 50-day line after chipping away at that level on Friday.
US crude prices fell 3 cents to $79.53 a barrel after topping $80 on Tuesday morning.
The 10-year Treasury yield jumped 11 basis points to 3.86% after soaring 27 basis points last week.
Between best ETFsthe Innovator IBD 50 ETF (ffty) fell 0.5%, while the Innovator IBD Breakout Opportunities ETF (COMBAT) rose 0.7%. The iShares Expanded Technology Software Sector ETF (IGV) fell by 0.6%. The VanEck Vector Semiconductor ETF (HMS) plummeted 1.8%. NVDA shares are a major holding of SMH.
The SPDR S&P Metals & Mining ETF (XME) rose 0.8%. FCX stock and ATI are XME components. The SPDR Industrial Select Sector ETF (XLI) rose 0.3%, with shares of Caterpillar and DE both among the top 10 holdings.
The US Global Jets ETF (JETS) decreased by 1.3%. SPDR S&P Home Builders (XHB) submerged 0.3%. The Energy Select SPDR ETF (XLE) rose 1.1%, with SLB shares a key component. The SPDR Financial Select ETF (Four. Five) was just below the break-even point. The SPDR Select Healthcare Sector Fund (XLV) yielded 0.3%.
Mirroring stocks with more speculative histories, the ARK Innovation ETF (ARKK) fell 4.15%, hitting a new five-year low. ARK Genomics (ARKG) plunged 3.8%, nearing the June bear market low. Tesla stock remains a major holding in Ark Invest ETFs.
Actions to watch
Caterpillar shares rose 1.4% to 243.14, surpassing a buy point of 239.95 from a flat base right next to a deep cup base. Breakouts have struggled over the last year, but the deep base of 6% does reduce the risk a bit. The relative line of force It is at its best level in almost 10 years.
Deere shares were down 0.2% at 436.15, still near its 21-day line with the 10-week line catching up. DE shares have been trading strongly after a strong run. It is on track for a shallow flat bottom by the end of the week with a buy point of 448.50. A move above the December 21 high of 444.51 would offer an early entry into Deere shares. The RS line for DE shares is at a record high.
ATI shares rose 3.8% to 31.45, rebounding from the 10-week line and reaching a trendline entry. The official buy point is 31.84 from a mango. The RS lineup for ATI is at its highest point in three years.
Freeport-McMoRan shares were up just over 2% at 38.88, rebounding from the 21-day and 10-week lines. That offers early entry from a long, deep handle mug base with a buy point of 41.26. FCX stock has yet to extend from its 50-day line, having just crossed the 200-day line.
Schlumberger shares were up 1% at 53.50, working on a buy point of 56.14 from a short base. Shares of SLB have broken a trend line entry and are still close to their 21 and 50 day lines.
Market recovery analysis
The stock market rally showed divided and divergent action in the Tuesday session.
The Dow Jones again found support at its 50-day line, but found resistance at its 21-day line.
The S&P 500 lost a little more ground against a 50-day rising line.
The Invesco S&P 500 Equal Weight ETF (RSP) rose fractionally, briefly surpassing its 50-day line, with the impact of Tesla, Nvidia, Moderna, and Enphase lessening.
The Nasdaq skidded on Tuesday, approaching Thursday’s intraday lows. The compound flirted with a bear market close low.
In addition to industrial, metals, mining, and energy companies like Caterpillar, Schlumberger, and FCX stocks, many medical companies are doing well. Housing stocks, from builders to materials to retailers, are also showing strength, along with some retailers. Chinese internet networks are picking up as the economy opens up.
But growth and tech stocks generally look terrible.
An uptrend under pressure that is also a divergent market rally amid enormous macroeconomic uncertainty is unstable and highly risky. And that’s before individual stock risk.
Real economy names are likely to propel tech names into a stock market rally in 2023, especially if the Federal Reserve and economic headwinds recede. Or technology and growth stocks could drag the broad market towards lower lows. Or the major indices could move sideways with significant sector turnover for an extended period.
What to do now
The stock market rally still persists. Parts of the market are doing well as the uptrend shows increasing divergence.
A savvy investor might try to buy, for example, shares of CAT, ATI, or Schlumberger. But the exposure should be light and any new position should be small. Investors could also play the sector or theme through ETFs such as XME, XLE, OIH, or XLI.
There is nothing wrong with not taking new positions, or even being completely in the cash.
Read The panorama daily to stay in sync with market direction and major stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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