Dow Jones Futures: Stock Market Rally Still Needs to Do This

Dow Jones futures trended higher early Wednesday, along with S&P 500 futures and Nasdaq futures. The stock market rally rebounded Tuesday, with the S&P 500 rebounding the 4,000 level.




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Deere (OF) reported better-than-expected earnings early Wednesday. DE shares rose solidly in premarket trading, signaling a move out of the buying zone.

Deere’s earnings and important guidance for a variety of agricultural stocks, including CF Industries (CF) and Archer-Daniels-Midland (ADM), as well as machine manufacturers such as caterpillar (CAT).

Energy stocks continue to perform well. Solar leader Enphase Energy (NPH), coal producer Peabody Energy (Saturday), distillation CVR Energy (CVI), natural gas producer EQT Corp. (EQT) and LNG shares Excelerate Energy (EE) are all close buy points.

EE shares broke out on Wednesday, with Enphase moving back into the buying zone. Shares of BTU, CVR Energy and EQT are feasible.

DE shares and Enphase Energy on IBD Leaderboard. EQT stock today SwingTrader. Deere stock is in IBD 50. Change in ENPH share price IBD Big Cap 20. Peabody Energy is on Tuesday IBD Stocks Today.

Apple iPhone Factory Riot

Riots broke out overnight at Apple’s largest iPhone factory in China, as hundreds of employees clashed with security. More than 100,000 workers have been forced to stay at the Foxconn campus in Zhengzhou for several weeks due to the Covid problem, and many have reportedly not been paid during that time.

Protests have also picked up elsewhere amid new lockdowns and severe restrictions in much of China as Covid cases rise.

Apple recently warned that the Apple iPhone 14 Pro model will be in short supply due to the Foxconn factory in Zhengzhou.

Apple shares fell a fraction early Wednesday. AAPL rose 1.5% to 150.18 on Tuesday, finding support near its 50-day line but still below its 200-day moving average.

Dow Jones Futures Today

Dow Jones futures edged higher vs. fair value. S&P 500 futures rose about 0.1%. Nasdaq 100 futures rose 0.2%, helped by Citigroup’s improvement Tesla (salad).

The 10-year Treasury yield rose 2 basis points to 3.78%.

Crude oil futures fell 3%. US natural gas prices jumped 7%. Tuesday, Europe released details on the natural price stamp, starting for the year as of January 1, it is more than twice the current level.

New Zealand’s central bank raised interest rates by a record 75 basis points, as expected.

Fed minutes from the November meeting will be released on Wednesday. Before the open, investors will receive weekly jobless claims, October durable goods orders and more.

Remember that the action is overnight Dow futures and elsewhere should not translate into actual trading in the next regular stock market session.


Join IBD’s experts as they analyze the stocks that could be in action in the stock market rally on IBD Live


Stock Market Rally

The stock market rally opened mixed on Tuesday but the mass stream for broad-based gains, close near session highs.

The Dow Jones Industrial Average rose 1.2% on Tuesday’s stock market trading. The S&P 500 index and the Nasdaq composite both jumped nearly 1.4%. The small-cap Russell 2000 popped 1.1%.

The 10-year Treasury yield fell 7 basis points to 3.76%. But the two-year Treasury yield, more closely tied to the Fed’s policy, was roughly flat at 4.53%.

The dollar, after rallying for the previous three sessions, fell again on Wednesday. greenback has fallen significantly since the end of September, especially since the beginning of November.

US crude oil prices rose 1.1% to $80.95 a barrel, continuing to rebound from Monday’s short-lived dive. Gasoline futures jumped 4.3%, good news for refiners. Natural gas futures edged higher after falling more than 2% intraday.

ETFs

including The best ETFsInnovator IBD 50 ETF (FFTY) jumped 3.4%, helped by a number of energy and metals stocks. iShares Expanded Tech-Software Sector ETFIGV) up 1.8%. VanEck Vectors Semiconductor ETFSMH) increased by 2.9%.

SPDR S&P Metals & Mining ETFXME) gained 3.2%, and Global X US Infrastructure Development ETF (Save) tacked on 1.3%. SPDR S&P Homebuilders ETFXHB) rebounded 1.9%. The Energy Select SPDR ETFAxle) increased by 3.1%. The Health Care Select Sector SPDR Fund (XIV) edged up 0.9% to a seven-month high.

Reflecting stocks with a more speculative story, ARK Innovation (RKK) produced a gain of 0.3% and ARK Genomics (ARKG) dipped 0.4%.


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Energy Stocks Near Buy points

Enphase shares rose 4% to 320.44, closing above 316.97 cup-with-handle buy points for the first time. However, the last three times ENPH stock got to this area, it turned back down. Enphase stock tends to have large daily swings. So investors can watch if ENPH stock pulls back to its 21-day moving average quickly.

Some other LNG stocks are showing strength, with Flex LNG (FLNG) break out and Cheniere Energy (LNG) reclaiming his line 50 days.

BTU stock jumped 6.7% to 29.62, just below the 30.15 handle buy point in the seven-month consolidation. Tuesday’s move broke the trendline of the handle, offering early entry. However, BTU stock is 9.3% above its 21-day line and 17% above its 50-day. The handle was formed after Peabody Energy’s strong earnings.

Shares of CVR Energy rose 4.85% to 40.85, returning to a 39.81 buy point high that could still be seen as valid. Also, CVI stock has a three-week-tight pattern with entry 42.31. A break above 41.31 could offer an early entry into that tight pattern.

EQT stock jumped almost 6% to 43.79, breaking back above the 50-day line after rebounding from the 200-day on Monday. Stocks that break the down-sloping trendline. The official Store Point is 52.07.

EE shares surged 9.6% to 30, clearing a 28.49 cup-with-handle buy point on above-average volume, according to MarketSmith analysis. The move to a record close cleared much of the trading going back to Excelerate Energy’s April IPO. Shares in EE have made early entries on Friday and Monday, although trading below normal during that time. Excelerate is now slightly extended from the buy zone and extended from the 21-day line.

Market Rally Analysis

The stock market rally continues to show constructive action, trading in a narrow range after a modest pullback and support last week. On Tuesday, major indexes bounced back from Monday’s losses.

The S&P 500 rebounded from its 10-day line, right at the 4,000 level, as it moved towards its 200-day line. While not above the intraday high of Nov. 15, it was the index’s best in more than two months.

The 50 day line is only started to turn higher in the S&P 500.

The Russell 2000 is getting very close to its 200 day high. The S&P MidCap 400, which held the 200-day line last week, turned in further gains.

The leading Dow Jones topped the level of 34,000 for the first time in three months, just below the August 16 peak. The laggard Nasdaq found support at its 21-day line, above its 50-day high, but did not erase all of Monday’s losses.

All of these indexes are working on a handle, with the Dow sneaking in on top. Most stocks follow the action of the major indexes, so a lot of holdings are formed in stocks near buy points. A slightly longer pause, perhaps until key economic reports late next week, will allow the moving average to begin to catch up.


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What to do now

Until the S&P 500 moves decisively above its 200-day line, investors may not want to add much exposure today. With the Thanksgiving holiday muting trade and the Fed-critical economic data next week, the market rally may be rangebound in the short term.

It can help stocks from various sectors set a handle and have a moving average. Investors should build their watch list. It’s definitely time to look beyond traditional tech growth stocks, most of which are currently lagging behind.

Since many leaders are extended from moving averages, such as Excelerate Energy or BTU shares, it is more important to find early entries and act quickly.

read The Big Picture daily stay in sync with market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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