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Dow Jones hides strong market breadth; This Cathie Wood Stock Soars As Another Plunge


Dow Jones futures edged higher overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally had a slightly positive session for large-cap indexes on Tuesday. But small- and mid-cap stocks had a great day.




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Two large shares of Cathie Wood, Shopify (SHOP) And Coinbase Global (COIN), went in the opposite direction on Tuesday.

SHOP shares rallied, extending Monday’s rally and showing an early entry. TransMedics Corporation (TMDX), Taiwan Semiconductor Manufacturing (TSM), Group life time (TRIAL) And Marriott International (March) made bullish moves.

Meanwhile, the SEC Charges Coinbase with being an unlicensed broker and violating other securities rules. COIN stock has dropped 12%, though it has fallen to its lowest level of the day. Coinbase shares fell just over 9% on Monday, below the 50-day and 200-day lines, after the SEC sued Binance, the world’s largest cryptocurrency exchange.

SHOP stock has been added IBD Rankings And SwingTrader on Tuesday. TMDX stock is on the floor IBD 50. Shopify is also Tuesday IBD shares of the day.

Dow Jones Futures Today

Dow Jones futures inched up from fair value. S&P 500 futures and Nasdaq 100 futures rose 0.1%.

The yield on the 10-year Treasury note fell 3 basis points to 3.67%.

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 shows strong market breadth even as the major indexes are trading in a tight range.

The Dow Jones Industrial Average posted small gains on Tuesday stock market trading. The S&P 500 index rose 0.2%. The Nasdaq Composite Index rose 0.4 percent. The Russell 2000 small-cap index rose 2.7%.

US crude oil prices fell 0.6 percent to $71.74 a barrel. The yield on the 10-year Treasury note rose 1 basis point to 3.7%.

ETFs

Among the growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.5% to a high in 2023. iShares Expanded Tech-Soft Sector Sector ETF (IGV) increased by 0.2%. VanEck Vectors Semiconductor ETF (SMH) increased by 0.7%. TSM stock is a major component of SMH.

Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) rose 1.5% and the ARK Genomics ETF (ARKG) increased by 2.3%. As noted above, COIN and Shopify stocks are the major holdings for Ark Invest ETFs. Tesla (TSLA), Roku (ROKU) And Draft Kings (DK) were the other major components with solid gains on Tuesday.

SPDR S&P Metals & Mining ETF (XME) rose 2.4% and the Global X US Infrastructure Development ETF (PAY THE ROAD RED) 1.5%. US Global Jets ETF (jet plane) increased by 1.7%. SPDR S&P Homebuilders ETF (XHB) increased by 2.9%. Energy Select SPDR ETF (XLE) raised 0.8% and the Healthcare Sector SPDR Fund (XLV) decreased by 0.8%.

Financial Options SPDR ETF (XLF) increased by 1.3%. SPDR S&P Regional Bank ETF (KRE) spiked nearly 5%, hitting its best level since late April.


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Stocks In Buy Zone

Shopify stock rose 6.2% to 63.66, clearly breaking the trendline in a brief consolidation. The biggest volume since the massive three-day bull run following the Q1 earnings report. SHOP stock is poised for action on Monday as it bounces off the 21-day line. It started to look elongated. Maybe the e-commerce giant will create a new facility, but not until the end of next week.

Shares of TransMedics jumped 6.2% to 79.40, recovering from the 50-day moving average on high volume. TMDX stock has 90.15 buy pointsbut it can be done here.

Shares of Taiwan Semiconductor rose 1.8% to 99.82, moving back above a 98.99 consolidated buy point in above-average trading, according to a report. MarketSmith Analysis. The chip giant sees better operating performance in the second half of 2023, while driving capital spending to the lowest level in line with previous guidance. TSM stock bounced off base levels on May 25, following outperformance and guidance from key clients Nvidia (NVDA), but was soon withdrawn. On Monday, the stock dipped just above the 21-day line before bouncing back up.

Life Time shares rose 4.2% to 20.94, regaining 20.35 cup base point of purchase in large volumes. Investors can view the past few weeks as a flat sole with an entry 21.39. LTH stock hit an 18-month high of 21.75 on the day.

Shares of Marriott rose 2.1% to 180.90, providing early entry into an emerging flat base alongside a year-long cup-with-handle base. MAR stock’s flat base won’t form until Friday, but there will be an 183.27 buy point. A move above the old buy point of 181.55 would be another entry point and mark a 52-week high close.

Analysis of market recovery

The stock market rally has had a dull day according to the major indexes, but has underlying strength.

Nasdaq rose but did not expand significantly. The S&P 500 continues to hold just below the August 2022 high. The Dow Jones Industrial Average returned to the 50-day line before reversing higher.

Meanwhile, the Russell 2000 and the S&P 500 MidCap 400 both rallied to their best levels since March 9.

Invesco S&P 500 Equal Weight ETF (RSP) rose 0.7%, hitting a one-month high after retrieving the 50-day and 200-day lines last Friday.

First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.2%, right at a 52-week high.

Overall, the winners beat the losers by more than 3 to 1 on the NYSE and 5 to 2 on the Nasdaq. New highs easily beat new lows.

The market rally has been led by a smaller number of tech and AI giants. Many of those names are pausing or at least not breaking through the field. That could be good for those stocks and the broader market. That could help keep Nasdaq from overheating as more teams are expected to join leadership.

Homebuilders, building products, health products and travel names are showing some strength.


Market Timing with IBD’s ETF Market Strategy


What to do now

With the major indexes stabilizing, the market breadth showing a positive, exploratory trend and a small number of buying opportunities, investors can continue to buy more gradually. This is an opportunity for low-investment traders to increase their exposure, while those using the AI ​​wave can diversify their portfolios.

Shakeouts are still common, while many stocks with deep bases appear to be expanding at traditional buy points. So look for early entries and try to buy stocks as close to the buy point as possible. This is where your watchlist building and alert settings pay off. If you’ve done your homework, the actual tests will be a lot easier.

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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