The market rally is facing a profit wave; What are you doing now

Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally made solid gains last week, breaking through some major resistance. Technology fell on Friday Explode, Explode (SNAP) and other weak earnings.

apple (AAPL), Microsoft (MSFT), a Google parent the alphabet (GOOGL), Amazon.com (AMZN) and father of Facebook meta pads (META) The title of a mega earnings week.

META and Google shares were sold off hard Friday on Snap’s results and a lack of guidance. Microsoft stock fell to the 50-day streak. Amazon only trimmed the big weekly gains. But Apple’s stock is one of the five stocks that are even close to the 200-day line, and don’t have a clear buying point in sight.

Meanwhile, the Federal Reserve meets, and a 75 basis point rate hike is likely to come on Wednesday. Guidance for future moves will be key. Investors began paring back the size of the September rate hike, with limited tightening after that. This is due in large part to a rapid slowdown in the economy, and possibly falling into a recession. Recession, along with still-high inflation, isn’t a great combination for corporate earnings.


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While recent action in the major indicators has been promising, investors should remain cautious as they add exposure.

Not many blue-chip stocks were flashing buy signals. Meanwhile, many promising stocks saw a surprise sell-off, including dollar tree (DLTR), Lanthius (LNTH), Agilon Health (AGL) and Lee Otto (LI), which imposes difficult decisions on investors.

LNTH stock is on the IBD Leaderboard, while Agilon is out on Friday. Li Auto and Agilon stocks are in the IBD 50. MSFT and Google stock are among the long-term leaders of IBD.

Browse the video included in the article important market movement, with analysis as well Cross Country Healthcare (CCRN), Li Auto stocks and DLTR.

Dow jones futures contracts today

Dow futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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stock market rise

The stock market rally made solid weekly gains, even with Friday’s dip.

The Dow Jones Industrial Average rose 2% in stock trading last week. The S&P 500 rose 2.6%. The Nasdaq Composite Index jumped 3.3%. Small cap Russell 2000 jumped 3.7%.

The 10-year Treasury yield fell 15 basis points to 2.78%, down 25 basis points on Thursday and Friday. Treasury yield curve inverted from 1 to 10 years. The six-month Treasury rate, at 2.94%, is significantly higher than the 10-year Treasury yield. All of this reflects the growing recession risk.

US crude oil futures fell nearly 3% to $97.59 a barrel last week.

ETFs

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) slipped 0.6% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 0.45%. Shares of iShares Expanded Tech-Software Sector ETF (IGV) were up 5.4%, with MSFT being a major component. The VanEck Vectors Semiconductor Index (SMH) was up 5.6%.

The SPDR S&P Metals & Mining (XME) index rebounded 1.9% last week. The US Global Infrastructure Development ETF (PAVE) jumped 5%. The US Global Jets ETF (JETS) rose 0.9%. The SPDR S&P Homebuilders ETF (XHB) is up 6%. The Energy Select SPDR ETF (XLE) gained 3.7% and the Financial Select SPDR ETF (XLF) 3%. The SPDR Healthcare Sector Selection Fund (XLV) was down 0.3%.

Reflecting speculative story stocks, the ARK Innovation ETF (ARKK) rose 4.85% last week and the ARK Genomics ETF (ARKG) rose 1.2%, despite giving up more than half of their weekly gains on Friday.


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Stock shake, blackmail

When a leading stock is sold to or below the point of purchase, investors are faced with a difficult decision: hold on too tight, exit or trim the position. There is not necessarily a “correct” answer. Sometimes the stock bounces back, and others keep falling – perhaps after a brief bounce. A more cautious approach may make more sense in the current volatile market. Buying near the entrance can provide more protection, too.

DLTR stock has been gradually rising in the buying territory this week when it suddenly dropped about 5% during Thursday. The shares fell just below 166.45 buying points, but found support at the 21-day line, according to MarketSmith analysis. At the close, DLTR stock was down less than 1%. On Friday, Dollar Tree stock briefly moved out of its buying territory before closing little changed.

LNTH stock hit a record high on Wednesday, just breaking out of the cup base, but closed nearly 14% above the 50-day line. On Thursday, Lanthus stock fell 7.8% on the day, although it trimmed its loss to 3.1%. quick shake? Maybe not. LNTH stock fell 4.5% on Friday.

On Thursday, Agilon stock broke from a bottom at 27.12 buy points. But shares fell 8.3 percent to 25.18 on Friday.

Li Auto stock rebounded from its 21-day streak on July 13 and made solid gains by Monday, July 18. But shares fell below the 21-day line on Tuesday, although they recovered to close above that key level, down 4.7%. On Wednesday, LI stock fell 3.7%, at its lowest level on Tuesday. On Thursday, Li Auto almost regained its 21-day streak, but then sold out convincingly on Friday. In the end, it was a bearish reversal week for the Chinese electric car maker.

Market Rise Analysis

The stock market rally has made huge strides over the past week. Major indices have surpassed their 50-day and 10-week moving averages, which have been a major stumbling block in recent months.

poor results from Snap, Verizon (VZ), Seagate Technology (STX) and intuitive surgery The ISRG provided a catalyst for Friday’s pullback.

But arguably the market was set to fall, especially in the Nasdaq and growth stocks. It’s best to get this pullback before the earnings collapse completely.

If everyone is going uphill for profits, that’s a recipe for big sell-offs on actual results. This may be especially true this time, with directions not particularly clear with the rapidly deteriorating economy.

Friday’s dip underscores how deceptive earnings season is, and not just for the company. Snap’s earnings report criticized shares of Meta and Google, along with other companies based on online advertising and the broader market.

Friday’s slump also shows the dangers of bottom fishing, buying shabby growth stocks as it races back.

The market may have bottomed out in mid-June, but that doesn’t necessarily mean it’s a quick and easy walk to all-time highs and beyond. The market bottomed out in late 2002 and late 2008, but it didn’t run for several months.

In addition to tech giants like Apple, Microsoft, Meta, Google, and Amazon, other highlights include This Next Week ExxonMobil (XOM), chevron (CVX), merck (MRK), Pfizer (PFE), General motors (GM) and Qualcomm (QCOM).

Apple, Microsoft, Merck and XOM stocks are all components of Dow Jones.


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What are you doing now

Investors should remain, at most, modest exposure. There weren’t many good stocks to buy, and these could be subject to a sudden selloff. Earnings season and the Fed meeting can send the market, different sectors, and individual stocks in all kinds of directions.

So be very careful for the next few days. If you make new purchases, look for early buying opportunities and try to buy as close to these entries as possible.

Keep working on your watchlists. The market rally showed some strength. You want to be ready to take advantage.

Read the big picture every day to stay in sync with market trend, stocks and leading sectors.

Please follow Ed Carson on Twitter at Tweet embed For stock market updates and more.

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