Dow futures will open Sunday night, along with S&P 500 and Nasdaq futures.
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The week of the stock market rally was mixed, but stocks were generally negative as renewed Treasury yields and mixed gains weighed on growth.
The Nasdaq dropped both its 50-day and 10-week moving averages during the week. Tesla (TSLA) and nvidia (NVDA) decisively below its ten-week lines. The decline in Nvidia’s stock is particularly notable because it is a leader in the AI-led market recovery.
The S&P 500 declined but found support around the 10-week line on Friday. The Dow Jones bucked the trend with a slight gain this week.
A market rally risks a correction, but it has yet to materialize. Arguably what is happening is that the uptrend is turning. Technology can be said to be improving, but industry, infrastructure, housing and energy sectors are consolidating or gaining ground. As well as some trade names, travel, medical, transport and finance.
Arista Networks (network), Tenaris (TS), Visa (fifth), slb (slb), linear (flexible), Martin Marietta (Multi-Level Marketing), Delta Airlines (DAL), Flowserv (FLS), Lululemon Athletica (Lulu) and w B. Morgan Chase (JPM) are all on or off.
while, Chief Health (CAH), Kava group (CAVA), Home Depot (HD), Fantastic (STNE) and on hold (Onon) is trading around a buy zone with expiration in the coming weeks.
However, investors should consider the current market environment defensively.
Shares of Tesla, Nvidia and Martin Marietta have high IBD ratings. SLB shares are on SwingTrader. Tesla, SLB, Applied Materials and ANET are among the IBD Big Cap 20 stocks. Flowserve was IBD’s Stock of the Friday.
The video embedded in this article provides an in-depth discussion of the weekly market action with Flowserve, JPM and Nvidia.
Dow Jones Futures Today
Dow Jones futures, along with S&P 500 and Nasdaq 100 futures, open at 6 p.m. ET on Sunday.
Keep in mind that overnight action in Dow futures and elsewhere does not translate into actual action in the next regular stock market session.
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Stock market bullish
Stock market bulls had a mixed week that hurt the Nasdaq’s name and growth.
The Dow Jones Industrial Average was up 0.6% in last week’s stock market trading. The S&P 500 was down 0.3%. The Nasdaq Composite fell 1.9%. The small-cap Russell 2000 was down 1.65%.
Twice the market width of the NASDAQ, but smaller than the New York Stock Exchange.
The 10-year Treasury yield jumped 11 basis points to 4.17%, near its 2023 high of 4.21% on August.
As Treasury yields rise and foreign economies suffer, the US dollar is at its all-time high in 2023.
US crude oil futures rose 0.45% to settle at $83.19 a barrel, their seventh straight weekly gain. But copper prices are down 3.4% and 5.2% in two weeks.
Exchange Traded Funds
Among ETFs, the Innovator IBD 50 ETF (Fifty) is down 4.9% in the past week. The iShares Expanded Technology and Software ETF ( IGV ) fell 1.7%. VanEck Vectors Semiconductor Corporation (SMH) by 5.2%. Nvidia stock is #1 in SMH Holdings.
Reflecting a more speculative story, the ARK Innovation ETF (ARK) arca (up 5.8% last week and the ARK Genomics ETF (ARKG) sold off 6.15%). Tesla stock is the number one equity ETF held by Arc Invest.
The SPDR S&P Metals and Mining (XME) ETF was down 1.4% last week. Global Infrastructure Development Fund X USA ( Cradle ) rose 0.2% holding franchise stocks.
The US Global Gates Foundation ETF (Aircraft) was down 0.5% and DAL stock was a notable contributor. The SPDR S&P Homebuilders ETF (XHB) was down 0.7%, a member of the LEN.
The SPDR ETF Energy Defined Fund ( xle ) rose 3.5%. The SLB is one of the XLE’s best features. And the SPDR Health Sector Selection Fund ( XLV ) fell 2.45% as CAH shares rose. The SPDR Industry Selection Fund ( XLI ) rose 0.6%.
The SPDR Financial Selection Fund (XLF) was up a small percentage, with Dow Jones Visa and JPM each maintaining notable holdings. The SPDR S&P Regional Banking ETF (KRE) was down 1.65%.
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Tesla stock
Tesla shares fell 4.4% last week to 242.65. The stock fell below the 50-day line on Monday and continued to decline. TSLA shares are now down 6.7% from their 10-week line. A week ending more than 2% below the 10-week mark is a significant sell signal. A new buyer is likely to appear.
Those who have a large cushion can consider taking partial profits depending on their investment strategy and their conviction in the stock.
An updated Tesla Model 3 is said to be imminent, at least in China, but there has been no confirmation from the EV giant. The Cybertruck is also coming, but it looks like it won’t make much of an impact until 2024, possibly later in the year.
nvidia stock
Nvidia dipped below the 50-day line on Wednesday, fell back on Thursday and extended losses on Friday. Shares closed down 8.6% at 408.55, the worst weekly decline of the year and on higher trading volumes. Shares of NVDA are down 5.1% from their 10-week line. New investors are likely to appear.
Long-term investors may or may not take profits. If you have a Big Tour winner, you have to go through corrections. Nvidia is the leading stock in an AI-led rally, but are you ready to survive the downturn?
Also note: Nvidia’s dividend expires on August 23rd.
The chip industry is generally in decline, along with other leaders From Broadcom (AVGO) and Amazing technology (MRVL) is retracing below the 50-day line last week. More broadly, AI plays have had a tough week.
Market Rally Analysis
Recovery in the stock market is going to be corrected.
The Nasdaq broke both the 50-day and 10-week lines on Wednesday and is now starting to break out. But it is not decisively below this level.
The S&P 500 touched a 10-week line on Friday but is currently flat. Russell 2000 is about 10 weeks old. Both resisted at the 21-day line.
The Dow Jones Index holds its index for 21 days.
Several growth leaders are decisively down in 10-week streaks, with Tesla and Nvidia the only two notable names in equities. Technical plays have suffered massive losses in the last two weeks.
In contrast, the S&P 500 maintains its 50-day series despite technical losses. Many industries look good, and names in the sector include Visa, SLB, JPMorgan, Flowserve and Lululemon. This may continue even if the market makes a mild correction. But most of them don’t even thrive.
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what are you doing now
Investors need to be more defensive, especially about growth plays. Although only processing entries on a case-by-case basis, exposure to the public and technology may have decreased over the past two weeks.
You can still buy outside of technology, but typically those areas are still only really affected or given away in exchange for real progress. The only exception is the energy sector, which has been fueled by high oil prices for several weeks. SLB stock is among the few names mentioned in this article that are actually in buy territory.
The market rally may yet recover, especially if Treasury yields ease.
A sustained decline can pull major stocks back to key levels and break new ground. Thus, multiple buying opportunities can develop, whether within days or weeks.
Investors need to prepare for this moment. Create these watch lists by looking at stocks that show strong relative strength.
Read the big picture daily to stay in sync with market trends, top stocks and sectors.
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