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Dow Jones Futures: Stock market rally still needs to do this


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




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Deere (DE) report Better than expected earnings early Wednesday. DE stock spiked in premarket trading, signaling a move out of the buy zone.

Deere earnings and guidance are important for a variety of agricultural stocks, including CF Industry (CF) and Archer-Daniels-Midland (ADM), as well as machinery manufacturers such as caterpillars (CAT).

Energy stocks continue to perform well. Solar leader Enphase energy (ENPH), coal producer pea energy (BTU), refiner CVR Energy (CVI), natural gas producer EQT JOINT STOCK COMPANY (EQT) and LNG storage superior energy (EE) are all nearby buy points.

EE stock exploded on Wednesday, with Enphase moving back into buy territory. BTU, CVR Energy and EQT stocks are actionable.

DE stock and Enphase Energy are on IBD Rankings. EQT stock is above SwingTrader. Deere stock is on IBD 50. ENPH stock is on the floor IBD Large Hat 20. Peabody Energy is Tuesday IBD shares of the day.

Riot at Apple’s iPhone factory

Riots broke out overnight at Apple’s largest iPhone factory in China, when hundreds of employees clashed with security. More than 100,000 workers have been forced to live on the Foxconn campus in Zhengzhou for weeks due to Covid concerns, with many reportedly going unpaid during that time.

Protests are also growing elsewhere amid extended lockdowns and strict restrictions across China as Covid cases rise.

Apple recently warned that Apple iPhone 14 Pro models will experience a supply shortage due to the Foxconn factory in Zhengzhou.

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

Dow Jones Futures Today

Dow Jones futures are up less than 0.1% above fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures rose 0.2%.

The yield on the 10-year Treasury note rose 1 basis point to 3.77%.

Crude oil futures fell 2%. U.S. natural gas prices rose 7%. On Tuesday, Europe released details on the natural price cap, which, starting in a year from January 1, is more than double the current level.

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

Minutes of the Fed’s November meeting will be released on Wednesday.

Before opening, investors will receive weekly jobless claims, October durables orders, etc.

Remember that action overnight in future index and other places that don’t necessarily translate into actual transactions the next time stock market meeting.


Join IBD experts as they analyze stocks that could act in the stock market rally on IBD Live


Stock market recovers

The stock market rally opened on mixed Tuesday but managed to post broad gains, closing near session highs.

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

The yield on the 10-year Treasury note fell 7 basis points to 3.76%. But the yield on the two-year Treasury note, more closely aligned with Fed policy, was mostly unchanged at 4.53%.

The dollar, after recovering in the previous three sessions, fell back on Wednesday. The greenback has fallen significantly since late September, especially since early November.

U.S. crude oil prices rose 1.1% to $80.95 a barrel, continuing to recover from Monday’s short-term plunge. Gasoline futures rose 4.3%, good news for refiners. Natural gas futures edged higher after falling more than 2% on the day.

ETFs

Among the best ETFsIBD 50 Innovator ETF (FFTY) rose 3.4% thanks to some energy and metals stocks. iShares Expanded Tech-Soft Sector Sector ETF (IGV) increased by 1.8%. VanEck Vectors Semiconductor ETF (SMH) increased by 2.9%.

SPDR S&P Metals & Mining ETF (XME) rose 3.2% and the Global X US Infrastructure Development ETF (PAY THE ROAD RED) reached 1.3%. SPDR S&P Homebuilders ETF (XHB) recovered 1.9%. Energy Select SPDR ETF (XLE) increased by 3.1%. SPDR Foundation for healthcare sector (XLV) rose 0.9% to a seven-month high.

Reflecting stocks with more speculative stories, ARK Innovation (ARKK) achieved a 0.3% gain, and ARK Genomics (ARKG) decreased by 0.4%.


The five best Chinese stocks to watch right now


Energy stocks near buy point

Enphase stock 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 has rallied to these areas, it has reversed lower. Enphase stocks tend to be highly volatile on a daily basis. So, investors can see if ENPH stock returns to its rapidly rising 21-day moving average.

Several other LNG stocks are showing strength, with Flexible LNG (FLNG) exit and Cheniere Energy (LNG) reclaim its 50-day line.

BTU stock rose 6.7% to 29.62, just below a 30.15 handle buy point during a seven-month consolidation. Tuesday’s move broke the trendline of the handle, providing an early entry. However, BTU stock is 9.3% above the 21-day moving average and 17% above the 50-day moving average. The handle was formed after strong earnings from Peabody Energy.

CVR Energy stock rose 4.85% to 40.85, back above the old buy point of 39.81 could still be considered valid. In addition, CVI stock has a three tight weeks sample has entry 42.31. A break above 41.31 could help early entry into that tight pattern.

EQT stock jumped nearly 6% to 43.79, breaking above the 50-day line after recovering from the 200-day line on Monday. The stock is breaking a downward sloping trend line. The official buy point is 52.07.

EE stock rose 9.6% to 30, beating a 28.49 cup-with-handle buy point on above-average volume, according to MarketSmith Analysis. The move to a record close erased a lot of the deals that took place since Excelerate Energy’s April IPO. EE stock had early entries on Friday and Monday, though trading below normal on those days. Excelerate is now slightly extended out of the buy zone and well extended from the 21-day line.

Analysis of market recovery

The equity market rally continued to show constructive action, trading in a tight range after a modest rally and support last week. On Tuesday, the major indexes rebounded from Monday’s declines.

The S&P 500 recovered from the 10-day line, right at 4,000, as it approached the 200-day line. While not above the intraday high of November 15, it is the index’s best close in more than two months.

The 50-day line is only started to move higher on the S&P 500.

The Russell 2000 is getting very close to its 200-day mark. The S&P MidCap 400, which held the 200-day line last week, added more.

The leading Dow Jones topped 34,000 for the first time in three months, just below the August 16 peak. The lagging Nasdaq found support at the 21-day line, just above the 50-day line, but failed to offset it. all losses on Monday.

All of these indicators are working on the handle, with the Dow on top. Most stocks follow the action of the major indexes, so a lot of handles are forming on stocks near the buy point. A slightly longer pause, perhaps until important economic reports next weekend, will allow the moving averages to start catching up.


Market Timing with IBD’s ETF Market Strategy


What to do now

Until the S&P 500 moves definitively above the 200-day line, investors may not want much exposure at the moment. With the Thanksgiving holiday disrupting trading and key Fed economic data next week, the market rally could be flat in the short term.

That can help stocks from a variety of sectors establish handles and have moving averages move up. Investors should build their watchlist. This is definitely the 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 stock, it’s all the more important to look for early entry points and act quickly.

Read Big picture every day to stay in sync with market trends and top stocks and sectors.

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

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