Dow Jones futures will open Sunday night along with S&P 500 futures and Nasdaq futures.
X
Equity market gains had a mixed week, but the overall move was negative as a recovery in Treasury yields and mixed earnings weighed on growth.
The Nasdaq broke below its 50-day and 10-week moving averages this week. Tesla (TSLA) and Nvidia (NVDA) is definitely below the 10-week line. The drop in NVIDIA stock, a leader in the AI-driven market rally, is particularly significant.
The S&P 500 fell slightly, but found support near the 10-week line on Friday. The Dow Jones bucked the trend and rose slightly this week.
The market rally is in danger of entering a correction phase, but it is not there yet. What is probably happening is that the uptrend is diverging. The tech industry is definitely in an adjustment, but the industrial, infrastructure, housing and energy sectors are holding up or rising. So are some names in retail, travel, healthcare, transportation, and finance.
Arista Networks (ANET), Tenaris (TS), visa (V.), SLBs (SLBs), Renner (Len), Martin Marietta (MLM), delta airlines (Dar), flow serve (FLS), lululemon athletica (Lulu) and JP Morgan Chase (JPM) are all set up or held.
meanwhile, cardinal health (CAH), kava group (Cava), home depot (HD), stone co (STNE) and On hold (Onon) is trading near the buy zone, which is set to close this week.
Still, investors should think defensively in the current market environment.
Tesla, Nvidia and Martin Marietta stocks are on the rise IBD Leaderboard. SLB stocks are on SwingTrader. Tesla, SLB, Applied Materials and ANET shares are IBD Big Cap 20. Flowserve was IBD Stock Of The Day on Friday.
The videos embedded in this article detail the weekly market trends while also analyzing Flowserve, JPM stocks and Nvidia.
dow jones futures today
Dow Jones futures open Sunday at 6:00 pm ET along with S&P 500 and Nasdaq 100 futures.
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
The stock market rally had a mixed week, hurting the Nasdaq and growth stocks.
The Dow Jones Industrial Average rose 0.6% in last week’s stock market trading. The S&P 500 index fell 0.3%. The Nasdaq Composite fell 1.9%. Small-cap Russell 2000 fell 1.65%.
Market width is weakening on the Nasdaq, but it’s even weaker on the New York Stock Exchange.
The 10-year Treasury yield climbed 11 basis points to 4.17%, approaching the 2023 high of 4.21% set on Aug. 4. Yields surged from a Thursday morning low of 3.96%.
The US dollar is approaching its 2023 highs as US bond yields rise and overseas economies falter.
US crude futures rose 0.45% to $83.19 a barrel, the seventh straight week of gains. However, copper prices fell 3.4%, down 5.2% in two weeks.
ETFs
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) fell 4.9% last week. iShares Augmented Technology Software Sector ETF (IGV) fell 1.7%. VanEck Vectors Semiconductor ETF (SMH) plunged 5.2%. Nvidia stock is his #1 SMH holding.
A stock that reflects a more speculative story, the ARK Innovation ETF (Arkuk) gave up 5.8% last week and the ARK Genomics ETF (Argu) fell 6.15%. Tesla shares are the number one holding of all Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 1.4% last week. Global X US Infrastructure Development ETF (pave) held MLM shares, up 0.2%.
US Global Jets ETF (Jets) fell 0.5%, with DAL shares becoming a notable component. SPDR S&P Homebuilders ETF (XHB), in which LEN shares are members, fell 0.7%.
Energy Select SPDR ETF (XLE) rose 3.5%. SLB is one of the top level XLE components. and Healthcare Select Sector SPDR Fund (XLV) rose 2.45% and the CAH strain rose. Industrial Select Sector SPDR Fund (XLI) rose 0.6%.
Financial Select SPDR ETF (XLF) rose some, and Dow Jones giant Visa and JPM shares were both notable holdings. SPDR S&P Regional Banking ETF (KRE) fell 1.65%.
Catch Your Next Big Win With MarketSmith
tesla stock
Tesla shares fell 4.4% last week to 242.65. The stock fell below the 50-day line on Monday and continued its decline thereafter. TSLA shares are currently 6.7% below the 10-week line. Ending the week more than 2% below 10 weeks would be a serious sell signal. Recent buyers should probably back out.
Those with a large cushion may consider taking partial profits, depending on their investment strategy and beliefs about the stock.
At least in China, Tesla’s Model 3 facelift is reportedly coming soon, but there’s no confirmation from the EV giant. Cybertruck is also coming, but it doesn’t seem to have much of an impact until 2024, possibly the end of the year.
nvidia stock
Nvidia slipped below the 50-day line on Wednesday, reversed on Thursday, and widened its losses on Friday. The stock ended 8.6% lower at 408.55, the worst weekly decline of the year, and was well traded. NVDA shares are currently 5.1% below the 10-week line. Recent investors should pull out.
Long-term investors may or may not make a profit. If you want to keep the winner in the big races, you have to be patient with the modifications. Nvidia He’s A Leading Stock In AI-Driven Stock Rally, Will It Survive The Economic Downturn?
NVIDIA’s financial results are expected to be announced on August 23rd.
The entire chip sector is retreating, with some leaders including: broadcom (AVGO) and marvel technology (MRVL) fell below the 50-day line last week. More broadly, AI Play has had a tough week.
market rise analysis
The stock market rally is on the brink of a correction.
The Nasdaq cut the 50-day and 10-week lines on Wednesday and now they are beginning to separate. But it’s definitely not below that level.
The S&P 500 index reached the 10-week line on Friday, but is holding for now. The Russell 2000 approached his 10th week. Both have resistance on the 21st line.
The Dow Jones holds a 21-day value.
Many growth leaders are definitely below the 10-week line, with only two stocks to watch: Tesla and Nvidia. Many tech companies have suffered huge losses in the past few weeks.
Meanwhile, the S&P 500 holds onto the 50-day line despite losses in tech stocks. Many sectors look good, including Visa, SLB, JP Morgan, Flowserve and lululemon. Even if the market enters a gradual correction, this situation could continue. But most of them aren’t really booming either.
Timing the Market with IBD’s ETF Market Strategy
what to do now
Investors should be increasingly defensive, especially when it comes to growth strategies. Overall and technical exposure should have decreased over the past few weeks, even if we’re just dealing with holdings on a case-by-case basis.
You can still buy in non-tech areas, but those areas generally hold up or concede reluctantly as opposed to real progress. One exception is the energy sector, which has benefited from weeks of high oil prices. SLB stock is one of the few stocks covered in this article that is actually in the buy zone.
The market rally could still come back, especially if U.S. Treasury yields fall.
The ongoing sell-off has pushed major stocks back to critical levels, allowing them to work on new grounds. Therefore, there could be many buying opportunities in the next few days or even weeks.
Investors should prepare for the moment. Create a watchlist and focus on relatively strong stocks.
Read “The Big Picture” daily to stay on top of market direction and key stocks and sectors.
Follow Ed Carson on Twitter. @IBD_ECarson Stock market updates and more.
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