Dow Jones futures fell slightly on Monday along with S&P 500 and Nasdaq futures. US markets are closed today.
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Last week’s rally in the stock market showed a strong and broad move that surprisingly overwhelmed the hawkish Federal Reserve. This increases confidence in the long-term prospects of the uptrend. But the extension of the Nasdaq has increased the chances of a short-term market pullback. Friday may have reflected the beginning of the slip, but it wasn’t that big of a slip.
A pullback could create new buying opportunities in key stocks, many of which are now well away from the entry. But in the short term, investors should be wary of new purchases, especially in high-profile tech sectors.
BA shares are trading very close to the buy point. Boeing (BA) and rivals airbus (easy) is likely to announce a number of new orders at the Paris Air Show, which opened on Sunday. Mackeson (Mac) exited the integration, while smith and nephew (SNN) above the entry of the trendline. Marriott International (March), Chipotle Mexican Grill (CMG), void gaming (BYD) and floor and decoration (FNDMore) is close to the purchase point. All seven stocks are market-leading non-tech stocks.
in the meantime, Advanced Micro Devices (AMD), Samsara (IoT) and Rambus (RMBS) are three stocks to watch that are starting to pull back.
But many leaders don’t back down. Nvidia (NVDA) hit a new all-time high on Friday, gaining 10% for the week. meta platform (meta) hit a 16-month high before closing a few minutes lower on Friday. Tesla (TSLA) climbed to an eight-month high on Friday after two small losses ended a record 13-day winning streak.
Tesla, META shares, Nvidia on the rise IBD Leaderboard. The CMG stock is on a leaderboard watchlist. MCK shares were added to SwingTrader on Friday, joining Boeing and FND shares.Chipotle and IOT stocks IBD50.Chipotle and Tesla stocks are on the rise IBD Big Cap 20. McKesson was IBD Stock Of The Day on Friday.
A video embedded in the article looks back at the market performance of the past week and analyzes shares of McKesson, Chipotle and AMD.
dow jones futures today
Dow Jones futures fell 0.3% against fair value. S&P 500 futures were down 0.15% and Nasdaq 100 futures were down 0.15%.
US stock markets were closed Monday for the Juneteen holiday, but other exchanges around the world were open. Dow futures trade as normal.
Note that overnight trading such as Dow Futures does not necessarily translate into actual trading in the next regular stock market.
IBD experts analyze hot stocks during the stock market rally on IBD Live.
stock market rise
Stock market gains had a solid week, especially on the Nasdaq, despite Friday’s generally modest decline.
The Dow Jones Industrial Average climbed 1.25% in last week’s stock market trading, reaching its highest level this year. The S&P 500 index rose 2.6% to its highest weekly reading since March. The Nasdaq Composite rose 3.25%, its eighth consecutive week of gains. Small-cap Russell 2000 rose 0.5%, well below its weekly high.
The 10-year U.S. Treasury yield rose two basis points to 3.77%.
Last week, US crude futures rose 2.3% to $71.78 a barrel. Copper prices rose 2.5%.
ETFs
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) rose 2.1% last week. iShares Augmented Technology Software Sector ETF (IGV) jumped 5.2%. VanEck Vectors Semiconductor ETF (SMH) climbed 4.45%, with Nvidia and AMD holding major shares.
SPDR S&P Metals & Mining ETF (XME) rose 2.9% last week. Global X US Infrastructure Development ETF (pave) rose 2.6%. US Global Jet (Jets) rose 5.65%. SPDR S&P Homebuilders ETF (XHB) rose 2.4%. Energy Select SPDR ETF (XLE) fell 0.6%. Healthcare Select Sector SPDR Fund (XLV) rose 1.4%. MCK’s stock is XLV.
Industrial Select Sector SPDR Fund (XLI) increased by 3%. BA shares are XLI’s major holdings.
Financial Select SPDR ETF (XLF) rose 1.3%. SPDR S&P Regional Banking ETF (KRE) fell 0.9% after its biggest gain since early May.
The ARK Innovation ETF (Arkuk) was up 4.2% last week, while ARK Genomics (Argu) jumped 3.9%. Tesla shares are the number one holding of all Ark Invest ETFs.
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BA shares rose 1.2% last week to 219.99, just below the flat buy point of 221.43. While many other industrial strategies appear to extend from the 50-day line, Boeing does not.
MCK shares rose 3.1% to 406.20 on Friday, breaking the buy point of 401.53 for the handle.
Last week, SNN stock climbed 6.9% to 32.16, clearing the flat base trendline that is part of the base-on-base formation.
CMG shares fell 0.4% to 2,032.92 amid low volumes, trading on the 21-day line and catching up with the 10-week line. Chipotle has a tight 4-week pattern with an official buy point of 2,139.88. This pattern could become a flat base in another week.
MAR shares fell 1.5% to 176.36 with support at the 21-day and 10-week lines. The buy point for Marriott stock is 183.37 from a flat base to several bases, according to MarketSmith analysis.
BYD shares fell 0.6% last week to 68 shares, just above the 10-week line. Boyd Gaming has him a bye of 71.69 from a flat base behind his two integrations of long cups with handles. Investors may use 70.04 as an early entry.
FND shares rose 0.3% to 96.26, just above the 50-day line. The buy point for Floor & Decor stock is 101.39 on a cup-with-handle basis, but investors could use 99.50 as a positive entry.
AMD shares fell 3.9% last week to 120.08, a sharp reversal from Tuesday’s 52-week high of 132.83. The stock has fallen towards the 21-day line and the recent mini-consolidation low. AMD released a new AI chip to compete with Nvidia, but the market reaction was not very good. Any chance of a buy once AMD finds support? Or will investors wait for, say, NVDA shares to take a break?
IOT shares fell 0.3% to 28.90, nearly surpassing the all-time high of 31.41 for the second half of 2021, before reluctantly pulling back later in the week. Shares are trading near the 10-day line, with Samara shares still well above the 21-day line.
RMBS shares fell 5.2% last week to 60.38, just below the 21-day line. Rambuth stocks have fallen for the third consecutive week.
market rise analysis
The market rally continues to show impressive strength. On Wednesday, the main indices showed resilience in the face of a surprisingly hawkish Fed, and they rose on Thursday. The S&P 500 and Nasdaq set new 52-week highs, while the Dow Jones set new 2023 highs.
Even on Friday, the uptrend resisted a pullback as the Nasdaq showed a clear gain and the S&P 500 also showed gains.
Market width was weak on Friday, but has improved significantly over the past few weeks.
Invesco S&P 500 Equal Weight ETF (RSP) jumped 2.5% to 148.83 before barely falling on Friday. A big change from just a few weeks ago. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 3.2% last week.
The Nasdaq is now 9.1% above the 50-day line and the Nasdaq 100 is up 10.6%. The S&P 500 is 5.5%. All of this points to a likely market recession, and the likelihood of such a recession being large increases. But stock prices may continue to rise further for some time.
Ideally, the Nasdaq will pause or drop reluctantly with low volumes and wait for the moving averages to catch up. If that happens, major stocks will take a breather, perhaps retreating to the 21-day line or 10-week line, or possibly lay a new foundation. Of course, the sell-off could be much more intense, and even a mild market downturn would result in huge losses for many individual stocks.
Depending on how mild or widespread the pullback is, non-tech blue chip stocks could break out, or at least hold out. Boeing, SNN, CMG, MAR, FND, and other businesses in medical products, industrial products, restaurants, travel, and housing are doing well.
More than once, stocks rose last week because investors simply don’t believe the Fed will raise interest rates two more times. Fed Chairman Jerome Powell may turn more hawkish in Congress this week after his relatively dovish remarks last Wednesday.
Timing the Market with IBD’s ETF Market Strategy
what to do now
With the Nasdaq and so many chip, software and AI leaders expanding the market, it’s not a good time to buy tech products. Investors may consider adding exposure elsewhere. Still, a Nasdaq-led decline could hit everyone. Investors may also want to save money for buying opportunities after big tech stocks have fallen.
You can consider taking a portion of the big winner’s profit on the way up or when it breaks below the 10-day line. It depends on the size of your individual positions and overall exposure, your beliefs about various holdings, and your own investment style. But make sure you have a solid exit strategy.
If a market pause or rebound has taken hold, stocks that find key support or consolidate near buy points should be closely monitored. So run your screens this long weekend to keep track of different and potential leaders.
The rise in the market has been remarkable. Despite the near-term caution, the overall trend is bullish. act accordingly.
Read “The Big Picture” daily to stay on top of market direction and key stocks and sectors.
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