Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures.
The stock market rally had a mixed week, but action was negative overall, with renewed Treasury yields and mixed earnings weighing on growth.
The Nasdaq fell through the 50-day and 10-week moving averages during the week. Tesla (TSLA) And nvidia (NVDA) decisively below the ten week lines. Nvidia’s stock decline is particularly significant as it is the leader of the AI-led market rebound.
The S&P 500 fell, but found support around the 10-week line on Friday. The Dow Jones bucked the trend, up slightly for the week.
The market rally is in danger of falling into a correction, but it has not yet materialized. Arguably what is happening is that the uptrend is diverging. While technology can be said to be in a correction, the industry, infrastructure, housing and energy sectors are consolidating or gaining ground. As well as some business names, travel, medical, transportation and financial.
Arista Networks (network), Tenaris (T.S), visa (Fifth), slb (slb), Linar (flexible), Martin Marietta (MLM), Delta Airlines (DAL), Flowserve (FLS), Lululemon Athletica (Lulu) And c. B. Morgan Chase (JPM) are all on or off.
However, investors should think defensively about the current market environment.
Tesla, Nvidia, and Martin Marietta stocks are in the running IBD Leaderboard. SLB stock is on SwingTrader. Tesla, SLB, Applied Materials and ANET are in stock IBD Big Cap 20. Flowserve was Friday’s stock of IBD.
The video embedded in this article discussed the weekly market action in depth, with Flowserve, JPM, and Nvidia also analyzing it.
Dow jones futures today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Stock market rise
The stock market rally had a mixed week that was detrimental to Nasdaq names and growth.
The Dow Jones Industrial Average rose 0.6% in last week’s trading on the stock market. The S&P 500 fell 0.3%. The Nasdaq Composite fell 1.9%. Small-cap Russell 2000 shed 1.65%.
Twice the market breadth of the NASDAQ, but less than that of the New York Stock Exchange.
The 10-year Treasury yield jumped 11 basis points to 4.17%, near the 2023 high of 4.21% on August 4.
With Treasury yields rising and overseas economies suffering, the US dollar is rising to its highest levels in 2023.
US crude oil futures rose 0.45% to $83.19 a barrel, the seventh consecutive weekly gain. But copper prices are down 3.4% and down 5.2% in two weeks.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) fell by 4.9% last week. iShares Expanded Technology and Software ETF (IGV) slipped 1.7%. VanEck Vectors Semiconductor Corporation (SMH) by 5.2%. Nvidia stock is No. 1 SMH Holding.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(gave up 5.8% last week and the ARK Genomics ETF)ARKG) was sold from 6.15%. Tesla stock is the number one stock ETF held by Ark Invest.
Energy Defined Fund SPDR ETF (xle) increased by 3.5%. SLB is one of the best components of XLE. and the SPDR Health Care Sector Selection Fund (XLV) down 2.45%, with CAH stock advancing. SPDR Industry Selection Fund (XLI) rose 0.6%.
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Tesla stock fell 4.4% to 242.65 last week. Stocks fell below the 50-day line on Monday and then continued to fall. TSLA stock is now down 6.7% from its 10-week line. Ending the week more than 2% below the 10-week mark is an important sell signal. New buyers are likely to come out.
Those with large cushions can consider taking partial profits depending on your investment strategy and your 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 have much impact until 2024, possibly later in the year.
Nvidia fell below the 50-day line on Wednesday, returned lower on Thursday and extended losses on Friday. Shares closed down 8.6% at 408.55, their worst weekly drop of the year, and on higher trading volumes. NVDA stock is now down 5.1% from its 10-week line. New investors are likely to come out.
Long term investors can take profits or not. If you were to hold a Big Tour winner, you would have to sit through the corrections. Nvidia is the leading stock in the AI-led rally, but are you willing to survive the downturn?
Also note: Nvidia’s dividend is due August 23rd.
The chip sector is generally declining, with fellow leaders such as from Broadcom (AVGO) And Marvell technology (MRVL) is retracing below the 50-day line last week. More broadly, AI Plays has had a tough week.
Market rally analysis
The stock market rally is about to correct.
The Nasdaq fell through the 50-day and 10-week lines on Wednesday, and is now starting to break away. But it is not decisively below those levels.
The S&P 500 touched the 10-week line on Friday, but it is holding steady for now. Russell 2000 is about 10 weeks old. Both hit resistance at the 21-day line.
The Dow Jones index holds its index for 21 days.
Several growth leaders are decisively below the 10-week streak, with only two notable names in stocks: Tesla and Nvidia. A large number of technical plays have suffered huge losses in the past two weeks.
On the other hand, the S&P 500 holds the 50-day streak, even with technical losses. Many sectors look good, and names in those areas include Visa, SLB, JPMorgan, Flowserve, and Lululemon. This could continue even if the market enters a moderate correction. But most of them aren’t really thriving either.
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What are you doing now
Investors have to be increasingly defensive, especially about growth plays. Public and technology exposure should have decreased in the past two weeks, even if only by processing holdings on a case-by-case basis.
You can still make purchases outside of technology, but generally those areas are still reluctantly swayed or conceded in exchange for real progress. The only exception is the energy sector, which has been fueled by weeks of high oil prices. SLB stock is among the few names mentioned in this article that are actually in buy territory.
The market rally could still rebound, especially if Treasury yields ease.
The continuous decline allows leading stocks to retreat to key levels and work on new grounds. So a whole lot of buying opportunities can develop, be it in a few days or several weeks.
Investors need to prepare for that moment. Build these watch lists, keeping an eye out for stocks that show strong relative strength.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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