Dow futures fell on Wednesday morning, while futures for the S&P 500 and Nasdaq rose slightly. The stock market rally came under more pressure on Tuesday, with all major indexes dropping below the 50-day moving averages and blue chips struggling.
A sudden jump in job opportunities increased expectations of a large Federal Reserve interest rate hike, sending the market down on Tuesday. Crude oil and natural gas prices fell, sending energy stocks lower, with other commodities also falling. Antero Resources (English), steel dynamics (STLD) And the CF . Industries (CF) all fell below buy or early entry points. Hot chip names like Photoronics (PLAB) sold hard.
Investors should look to reduce exposure and reduce losses.
Energy Enphase (ENPH) is holding up well, but is testing a major level. Bindudu (PDD) holds near a buying point after Monday’s earnings gap, but it’s somewhat on its own in terms of the Chinese internet. Celsius (CELH) finds support at the 21-day line.
after closing, CrowdStrike (CRWD) mentioned Second quarter earnings are better than expected And revenue, with the cybersecurity firm also steering modestly higher. CRWD stock is down in overnight trading. Shares were down 0.5% at 62.83 in the regular Tuesday session, above the 50-day line. CrowdStrike stock is well below the 200 day sliding streak.
CELH and Steel Dynamics stock in operation IBD Leaderboard. Tesla, CF Industries, Celsius and Enphase Energy shares are all on defect 50. CF Industries and ENPH shares are located in IBD Big Cap 20. Enphase is Tuesday IBD stock today.
The video included in the article discusses market action on Tuesday and analyzes AR, Steel Dynamics and Pinduoduo stocks.
Dow jones futures contracts today
Dow Jones futures contracts were just below fair value. S&P 500 futures rose 0.1%. Nasdaq futures rose 0.6%. All futures were from modest highs to solid overnight.
Crude oil futures fell more than 3%, back below $90 a barrel. Natural gas prices have fallen in the US, even as Russia once again shuts down its Nord Stream 1 pipeline to Europe.
The 10-year Treasury yield rose 3 basis points to 3.14%.
China’s manufacturing index rose 0.4 points in August to 49.4, slightly better than expected. This is still below the 50-point breakeven level.
The US ISM manufacturing index is due out Thursday morning.
stock market rise
The stock market rally briefly tried to find a foothold, but then broke through key support levels on the back of strong economic data. The major indicators closed the session lows.
The Labor Department reported that job opportunities rose unexpectedly in July, after a significant upward adjustment in June. This indicates that there is a heavy and arduous demand for labour. This will keep rising fears of rising wages, even as gasoline prices fall and commodity prices decline. On Friday, the Labor Department will release its August jobs report.
The Dow Jones Industrial Average is down 1% on Tuesday stock market trading. The S&P 500 and Nasdaq Composite lost 1.1%. Small-scale Russell 2000 gave up 1.4%.
US crude oil prices fell 5.5% to $91.64 a barrel, outpacing Monday’s strong gains. An OPEC+ official told Russia’s state-owned TASS news agency that the organization and its allies are not considering a supply cut. Gasoline futures were down 6.4%. Natural gas prices fell 3.2%, as Europe fills up winter stocks ahead of schedule and signals move to intervene in energy prices to curb price hikes.
The 10-year Treasury yield was flat at 3.1%, retreating from intraday highs of 3.15%. The 2-year Treasury yield rose 3 basis points to 3.46% amid expectations of an increased Fed rate hike. The yield curve continues to invert, which is a warning of recession.
between the Best ETFsThe Innovator IBD 50 ETF (fifty) is down 3.7%, as energy and commodity names hit FFTY. iShares Expanded Technology and Software Fund (ETF)IGV) decreased by 0.2%. VanEck Vectors Semiconductor Corporation (SMH) lost 1.1%.
SPDR S&P Metals & Mining ETF (XME) down 4.3%, with STLD stock a key component. Global Infrastructure Development Fund X US (cradle) by 2.2%. SPDR Specific Energy Fund (SPDR ETF)XLE) declined by 3.4%. SPDR Healthcare Sector Selection Fund (XLV) down 0.7%.
stock to watch
ENPH stock rose 0.3% to 285.77, keeping support at the 21-day line. Enphase stock has been trading relatively tight over the past few weeks after skyrocketing earnings from late July to an August 8 high of 308.88. Ideally, ENPH stock will form a new base, although investors can use the movement above Friday’s high as an early entry.
PDD stock rose 0.7% to 66.50. On Monday, shares jumped 15% to 66.04 as a result of Pinduoduo’s earnings explosion. PDD shares briefly topped 68.81 cup-bottom buy points on the day, according to MarketSmith Analysis. Last week, Pinduoduo stock rose 25%, buoyed by a US-China audit agreement that would end the threat of delisting Chinese companies traded on the New York Stock Exchange.
CELH stock fell 0.5% to 104.43, its third consecutive decline. But shares of the energy drink maker found support at the 21-day line. The percentage share is clearly below 109.84 buying points on a huge base, so investors who have bought or added shares at that point may at least want to cut back on those purchases. However, CELH stock has held up relatively well in the context of its massive move since early May.
AAPL stock has been the only huge stock that has consistently traded above the 200-day line over the past month. But on Tuesday, shares fell 1.5% to 158.91, below that key level, which had made an early entry just a few weeks earlier. Apple shares are looking to return to the 50-day streak, which is already touching the 10-week average. While handle 176.25 buy point The latest trend is no longer a friend of the giant Dow tech.
TSLA stock fell 2.5% to 277.70, its fourth consecutive loss since its 3-for-1 split, although it all came in anemic size. As with AAPL stock, the EV giant is dropping towards the 50-day line and testing 10 weeks. Tesla stock is starting to ignore the 200 day line rise above it, and some strong entry points.
Market Rise Analysis
The stock market rally has struggled since the S&P 500 hit resistance at its 200-day moving average on August 16, with selling intensifying with Fed Chairman Jerome Powell’s hawkish speech last Friday.
On Tuesday, all major indicators fell below the 50-day moving averages. The Russell 2000 and S&P 400 MidCap are quickly moving towards this major level.
Prospects for a third consecutive rate hike of 75 basis points in September actually declined on Tuesday, but to 68.5% is still high. But markets are slightly more confident of a half-point move in November and a quarter-point hike in the Fed rate in December, ending the year at 3.75%-4% fed funds rate versus 2.25%-2.5% now.
Fed Chairman Powell and other policymakers have stated that they will keep interest rates high for a long time, and they are hinting that a clear recession may be necessary to calm labor markets and underlying inflation pressures. Regardless of the Fed’s rate increases, tight labor markets are shortening corporate profit margins.
Leading stocks are faltering, with recent energy breakthroughs faltering or failing. Antero Resources slipped 8.1% on Tuesday, below the early entry from a very low handle. Steel Dynamics stock, after holding up significantly after last Thursday’s hack, is down 5.6% on Tuesday. Fertilizer leader CF Industries lost 6.5% after falling 4.2% on Monday to close below its buying point.
Can these stocks rebound and redeem points of purchase or quickly create new entries? Sure, but it can also crash.
Apple and Tesla stocks are showing that even the best megacap names are faltering, which is a bad sign for major indices.
Solar stocks were the winner. But even Enphase stock hasn’t made much progress over the past few weeks. Separately, the hot cent stock is doing relatively well, but still losing some of its gains.
The recent uptrend increasingly looks like a late-stage bear market rally. Major indicators may test or lower their June lows. It will probably be range-bound between mid-June lows and mid-August highs. Or perhaps the market rally will find its footing and quickly advance above the 200 day line and beyond.
But at the moment, the market is not doing well.
What are you doing now
This is the time to reduce your overall exposure. Even putting portfolio management aside, investors should cut their losses or come out with meager gains on new buys that have recently slumped.
For stocks that are holding up like the percentage point, and there are always a few out there, investors may still want to consider taking at least a partial profit. If the market continues to weaken, the probability is high that even resilient stocks will eventually give up.
Keep working on watch lists. The market rally could rebound, with new buying opportunities from the handles or pullbacks. If you are so inclined, you can also create watch lists of potential short trades, in case the market tries to bounce and then falter.
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