Dow Jones futures were mixed early Thursday, along with S&P 500 futures and Nasdaq futures, when the national rail strike was averted at 11 a.m. The stock market rebounded on Wednesday, but it was an uneven rally that recouped only a fraction of Tuesday’s massive sell-off.
Traders should remain concerned until the major indexes regain their 50-day moving averages.
Energy stocks led the way on Wednesday, with crude oil prices rising and natural gas futures soaring. Devonian energy (DVN) removed the early entry. Exxon Mobil (XOM) is on the cusp of flashing a buy signal.
DVN stock is on IBD Rankings and SwingTrader. Devon Energy is also Wednesday IBD shares of the day. Tesla, Devon, Arista Networks and Pure Storage shares are all above IBD 50. Arista Networks and XOM shares on IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures are little changed from fair value. S&P 500 futures lost 0.2 percent and Nasdaq 100 futures lost 0.3 percent.
The yield on the 10-year Treasury note rose 5 basis points to 3.46%, well below an 11-year high.
Crude oil futures fell more than 1% while natural gas prices fell nearly 6% after surging Wednesday.
The Biden administration said on Thursday that there is a tentative agreement between railroad operators and workers. That prevented a possible strike as soon as Friday that would disrupt supply chains again.
Adobe (ADBE) reported better-than-expected quarterly earnings and profits, releasing results before the opening instead of after. That’s because the software giant confirmed it’s buying online design collaboration firm Figma for $20 billion in cash and stock.
ADBE stock fell sharply.
Investors will get a bunch of economic data before the stock market opens on Thursday. August retail sales as well as the Philadelphia Fed manufacturing index in September and the New York Fed Empire State index are due at 8:30 a.m. ET, in addition to the weekly jobless claims data. . August industrial production is set for 9:15 a.m. ET.
Rally stock market
The stock market recovered slightly on Wednesday morning, then faded to the negative before recovering later in the session to close higher.
The Dow Jones Industrial Average rose 0.1% on Wednesday stock market trading. The S&P 500 index rose 0.3%. The Nasdaq Composite Index rose 0.7 percent. The small-cap Russell 2000 gained 0.4%.
U.S. crude oil prices rose 1.3% to $88.48 a barrel, though that was the highest of the session. Natgas price increased 9.2% to 9,114 British thermal units (BTU)
The yield on the 10-year Treasury note fell 1 basis point to 3.41%. But it was just below the 11-year high of 3.48% set on June 14.
Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) rose 2.35% late Wednesday, helped by energy stocks on the list. ETF Creator IBD Breakthrough Opportunity (BOUT) increased by 0.65%. iShares Expanded Technology-Software Sector ETF (IGV) increased by 0.1%. VanEck Vectors Semiconductor ETF (SMH) increased by 1.1%.
SPDR S&P Metals & Mining ETF (XME) fell 3.1% and the US X Global Infrastructure Development Fund (SAVE) decreased by 1.7%. SPDR Select Energy ETF (XLE), with large holdings of XOM stock and Devon Energy also in the XLE ETF, up 2.8%. SPDR Fund for the Healthcare Sector (XLV) inched up below 0.1%.
Shares of DVN
DVN stock rose 4.5% to 72.17, recovering from its 21-day moving average, touching 73.29 on the day. The oil and natural gas producer hit a Monday high of 71.57, offering an early entry in the cup-with-handle base. Official point of purchase is 75.37.
DVN shares fell slightly early Thursday amid plunging energy prices and JPMorgan’s downgrade.
XOM . Stock
XOM shares rose 2.45% to 97.67. Shares of the integrated oil giant are operating above a 101.66-cup buy point, according to MarketSmith Analysis. Investors can use gains above Monday’s high of 99.19 as an early entry.
Tesla shares rose 3.6% to 302.61, recovering back above the 200-day moving average after dropping that key level in the market on Tuesday. On the day, TSLA stock hit 306, only topping Monday’s 305.49. That can provide a positive entry, emphasizing aggression. Investors may want to use 306.10 now as a trigger point.
The relative strength line for Tesla stock improved significantly over the past week, hitting its best level since late April.
Shares of Arista Networks rose nearly 2% to 122.26, up slightly from 200-day highs after falling 3.9% on Tuesday. ANET stock has 132.97 buy points from double bottom sole have handles. But investors can use 126.80, just above Monday’s high, as an early entry.
PSTG stock rose 0.1% to 29.67 on Wednesday, trading around its 21-day moving average after sliding 3.8% on Tuesday. Pure storage has 31.62 cup with handle buy points. Investors can use 30.98, which just topped Monday’s high, as a slightly lower entry.
Market aggregation analysis
The stock market rebounded on Wednesday, but it was only a blip after the Nasdaq fell more than 5% on Tuesday.
Wednesday’s relative producer price index reading could give the Federal Reserve a reason to raise interest rates for the third time in a row to 75 basis points on September 21. although the markets are pricing in a one-quarter chance of 100 basis points. Perhaps more importantly, CME FedWatch Tool Currently, the markets are anticipating a year-end lending rate of 4.25% -4.50%. 50 basis points higher than before Tuesday hot consumer price index.
It only took a few minutes for the major indexes to drop below the 50-day moving average on Tuesday, but it could take significant time to get back above that key level. The stock market rally could hit resistance there or at the nearby 21-day lines. Meanwhile, the S&P 500 and Nasdaq are close to last week’s lows, with the Dow already slashing those levels.
Energy stocks were the winners on Wednesday, but closed well with intraday highs. While oil and gas names move with commodity prices, they are also subject to stock market trends.
ANET stock and Pure Storage aren’t nearly as actionable, but there’s an upside. They may issue a buy signal when the major indexes recover back above their 50-day moving averages.
What to do now
But until the major indexes rebound above their 50-day lines, investors should be cautious about increasing this ratio further. This is a market rally under significant pressure, not a strong uptrend.
If you take new positions, consider taking partial profits particularly quickly.
All that said, the top stocks generally look better than the market indexes. Investors should build their watchlist, looking for quality names to set up or flash buy signals.
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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