Dow Jones futures fell 425 points last Friday morning Comments by Fed Director Jerome Powell At a Federal Reserve event in Washington D.C. The initial action threatened to extend the stock market’s three-day losing streak, sending the Nasdaq and S&P 500 on track for their sixth weekly decline in the past seven weeks.
European indexes also crashed on Friday after business surveys showed economic activity in Europe plummeted in September, increase the risk of recession.
Chris Williamson, chief economist at S&P Global Market Intelligence, said: “The eurozone downturn has seen companies reporting worsening business conditions and increasing price pressures. related to rising energy costs”. Williamson was quoted in an S&P Global news release.
London’s FTSE 100 fell 2.2%, while Frankfurt’s DAX sold off 2.7% and Paris’ CAC 40 fell 2.2% in afternoon trading.
Wholesale Costco (PRICE) was a major earnings driver on Friday morning. Costco reported Fiscal Q4 earnings better than expected and sales matched late Thursday, however, COST stock fell more than 2% in morning trading. At the beginning of September, Costco stock activated 7% -8% stop loss rule from the point of buying 552.81 from a cup with a handle.
Top stocks to watch amid recent market weakness include Continental Resources (CLR), DoubleVerify (DV), Neurocriminal Biosciences (NBIX) and Vertex Pharmaceuticals (VRTX) – as well as Dow Jones stock Chevron (CVX). Remember that the new stock market correction is a good reason for investors to largely stay on the sidelines, if not completely.
DoubleVerify is a IBD Rankings stock, but its position size was cut in last week’s losses. Tesla was featured in this week’s Stocks Near Buys column. Mental crime is Wednesday 50 IBD stocks to see options.
Dow Jones today: Treasury yields, oil prices
Before Friday’s opening bell, the Dow Jones Industrial Average was trading down 1.4% from fair value, while S&P 500 futures were down 1.45%. Nasdaq 100 futures contracts fell 1.4% in morning trading. Remember that works overnight in Dow Jones Futures and elsewhere it doesn’t necessarily translate into actual trading the next week stock market meeting.
The yield on the 10-year Treasury note rose to 3.76% on Friday, touching its highest level since April 2010. Meanwhile, concerns about a loss of demand driven by European data have cooled down. causing US oil prices to drop more than 3%. West Texas Intermediate oil futures fell to nearly $80 a barrel, the lowest since February.
Stock market correction
On Thursday, the Dow Jones Industrial Average fell 0.4 percent, testing the 30,000 level, about which the index rallied in June and July. Dow futures showed a breakdown of support. support in pre-market transactions. The S&P 500 index closed 0.8 percent lower on Thursday. The Nasdaq composite index fell 1.4%. The small-cap Russell 2000 lagged, sliding 2.3%.
All four major stock indexes have hit new lows since IBD’s market outlook changed to a “market correction” on September 16.
Thursday’s Big Picture Category commented, “Top growth stocks underperform on Thursday, as the Innovator IBD 50 ETF (FFTY) fell 3.1%, hitting a 52-week low. In fact, the ETF is currently at its lowest level since March 2020, close to the Covid bear market low. “
To prepare for a fresh rally in the stock market, investors should watch for two things: an attempt at a recovery, followed by a follow-up day.
In a market correction, the first day the index closes higher is the first day of an attempted rally. The action on day 2 and day 3 is irrelevant as long as the index does not cross its latest low. If that low is too low, the test is done and the market needs to try again. Thursday’s action hits more corrective lows, so we go back to day one.
On day 4 and beyond, you’re looking for the Nasdaq or S&P 500 to surge on higher volume than the previous session. That is the next day. It gives investors the green light to start buying past breakout top stocks buy points. It will put your portfolio and mindset in sync with the stock market action by gradually committing capital to top stocks.
During a stock market correction, don’t ignore it. Instead, create a watchlist for emerging market leads using relative strength line. The RS line measures a stock’s price performance relative to the S&P 500. If the stock outperforms the broader market, the RS line points upwards. If a stock lags behind the broader market, this line will only go lower.
Dow Jones Stocks to Watch: Chevron
Dow Jones shares Chevron inched lower on Thursday, still barely holding at key support around its 50-day line. Shares are trading about 6% away from their most recent buy point at 166.93 on a cup with handle – according to IBD MarketSmith chart analysis – amid the strong performance of energy stocks so far this year. Stocks sold off more than 2% as oil prices fell early Friday.
CVX shares shows a strong 98 out of a perfect 99 IBD Composite Rating, every Check out IBD stock. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical indicators.
Top stocks to watch: Continental, DoubleVerify, Neurocrine, Vertex
Follow IBD MarketSmith chart analysis. The relative strength line hit a recent high last week, but is still a bit off the 52-week high. CLR stock traded down nearly 3% early Friday.
IBD . Stock Charts DoubleVerify remains below a 28.07 buy point at the bottom after losing 1.6% on Thursday. The stock is just above its 50-day line. DV stock lost 0.9% on Friday morning.
Wednesday 50 IBD stocks to see options, Neurocrine Biosciences, is building a flat base that has a buy point of 109.36. The stock’s RS line hit a new high on Wednesday, suggesting the stock market is doing better. Shares were flat on Friday.
Vertex Pharmaceuticals is close to regaining the 50-day threshold after Thursday’s 2.1% rally. The stock has held up during the market weakness, indicated by a relative strength line approaching new highs. A new flat base has a 306.05 buy point and the stock’s resilience makes it a top idea to watch. Vertex stock was flat on Friday.
Tesla shares trades down 4.1% on Thursday, testing support around the 50-day line. The stock continues to form a short-term base with a 314.74 buy point. Meanwhile, watch for additional buy points if the stock can climb further to the right of the larger consolidation, which has lasted since January. Shares fell another 2.1% on Friday morning.
Quite optimistically, the stock’s RS line hit its highest level since April this week. Shares are about 30% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Between Dow Jones SecuritiesShares of Apple fell 0.6% on Thursday, adding to Wednesday’s 2% drop. Stocks are trading near recent lows. Apple stock lost 1.6% on Friday morning.
Microsoft rallied 0.85% on Thursday, reversing higher after hitting a 52-week low. The software giant is down about 32% from a 52-week high. Shares of Microsoft fell 1.1% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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