Dow Jones futures rose slightly on Wednesday night with S&P 500 futures and Nasdaq futures. R.H. (RH), Grogeneration (GRWG) and KB Home Major earnings after closing (KBH).
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The stock market rally was another rough session on Wednesday, with key indices closing lower. The Dow Jones erased a solid gain, while the S&P 500 surpassed key levels. The Nasdaq went below 13,000.
Applied Materials (AAMAT) briefly cleared the buy point while many chip-gear peers also advanced Intel (INTC) spending plan. But they fade closer. The current market environment is not healthy for active investors. In fact, it is the worst possible market.
In Las Vegas, casinos have to pay gamblers on a slot machine enough to keep them pulling levers. If there were never winners in the slots, people would stay away. In the current market rally, breakouts occur to attract investors. But existing breakouts or early entries are struggling, with stocks either running out of water, slowing zone sales or a sudden sinking.
The general market has been moving sideways downwards since last week, while moving in and out of various sectors. Which makes it difficult to make any progress.
Biden, the Fed is changing the game for stocks
Plunge Tencent Music, China Stocks
Tencent Music Entertainment (TME) crashed 27%, dipped below its most recent buy point and then its 50-day line. With that came a bad day for China stocks Neo (NIO), JD.com (JD) and Tencent stock are down 10%, 5.3% and 5.1%, respectively. Parents of Tencent Music, Tencent (TCEHY) topped the earnings scenario early Wednesday morning. Whipshop (VIPS), which was well above any buy point, broke 21%.
Internet companies are required to keep their customer data in a joint venture with the Chinese government. China’s central bank is also cutting liquidity boots, which is a stretch in stocks.
Very valuable growth stocks outside of China also declined significantly. Tesla (TSLA) continued to slide from its short-term highs and key moving averages, falling 8.8%. CEO Elon Musk said people can now buy Tesla with Bitcoin, which led to an early morning rise in TSLA stock and bitcoin prices. But Bitcoin is also low.
The “good news” is that Tesla stock and most of the other 2020 winners have suffered serious losses, so they should not entice investors in recent weeks.
AMAT stock, chip gear rally plays
Side-by-side, some chip-equipment manufacturers jumped on the news that Intel would build two new plants in Arizona and become a chip foundry.
AMAT was the stock winner, clearing the short consolidation, hitting a record high of 125.80 intraday. But the share fell, though it rose 4.1% to 121.10. It is exactly on the handle-like area. The relative strength line for applied materials hit the record further.
ASML Record (ASML), KLA Corp. (KLAC) and other chip-gear manufacturers also moved forward, although they largely abandoned most of their morning benefits. But Intel shares closed at 2.3% lower with an initial gain of 6%. Taiwan Semiconductor (TSM), which faces Intel’s potentially big risk, sank 5.2% to a near 2021 low.
Meanwhile, commodity, infrastructure and travel dramas bounced somewhat. But investors will have already hit stop losses. Those who withdrew only a fraction of the damage done on Tuesday left last week’s decline.
Key earnings
RH’s revenue and earnings are at the top in quarterly views. RH stock tumbled 8% overnight, signaling a move above the buy point. RH stock fell 4.6% to 485.11 on Wednesday. On Monday, RHA cleared 524.32 by points from a two-month consolidation, but slipped back on Tuesday.
Investors were impressed by the growth and earnings guidance. GRWG stock surged 8% in overnight trading. On Wednesday, the grogening stock dipped 12% to 45.81 from its 50-day low.
KB Home’s earnings saw a loss of sales. KBH stock fell 3% in extended trade. Shares rose 0.1% to 43.39 on Wednesday, far from long-term lows.
TME Stock and Taiwan Semiconductor IBD are on the leaderboard. Tencent Music, TSM, Grogeneration and Tesla stock are also on the IBD50. GRWG stock is at IBD Big Cap 20.
Why this IBD tool simplifies the search for top stocks
Dow Jones futures today
Dow Jones futures 0.3% vs. fair value. S&P 500 futures rose 0.3%. Nasdaq 100 futures rose 0.25%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
Join IBD experts as they analyze the additional stocks in the stock market boom on IBD Live.
Corona virus news
Coronavirus cases have reached 125.33 million worldwide. Covid-19 death tops 2.75 million.
U.S. There have been 0.70 million cases of coronavirus in India, in which more than 55,588,000 people have died.
Stock market rally
US stock market observed today |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Advantages / disadvantages | Change% |
| Dow Jones | (0 DJIA) | 32420.78 | -2.37 | -0.01 |
| S&P 500 | (0s and p5) | 3889.15 | -21.37 | -0.55 |
| Nasdaq | (0NDQC) | 12961.89 | -265.81 | -2.01 |
| Russell 2000 | (IWM) | 212.12 | -4.94 | -2.28 |
| IBD50 | (FFTY) | Is 42.50 | -2.32 | -5.18 |
Last updated: 4:40 PM ET 3/24/2021 |
||||
The stock market rally showed a change in character, the mixed picture turned to a largely negative and technical loss, which spread beyond tech and small caps.
The Dow Jones Industrial Average closed at a fraction of the average on Wednesday, with a good gain in morning gains. The S&P 500 index retreated 0.55% below its 21-day lethal moving average. The Nasdaq joint fell 2%. Russell 2000 sank 2.3% after Tuesday’s 3.6% dive.
This is an important day to read the Big Picture to keep up with the market direction and leading stocks and sectors.
The 10-year Treasury yield fell 2 basis points to 1.61%, falling for the fourth straight session after hitting an epidemic high last week.
Among the best ETFs, the Innovator IBD50 ETF (FFTY) fell 5.2%, while the Innovator IBD Breakout Chances ETF (BOUT) fell 4.6%. On Monday, FFTY and BOUT were holding above their 50-day line, but are now coming to a March low.
Eichers Extended Tech-Software Software Sector ETF (IGV) has sunk 2.7%. Vendors semiconductor ETFs (SMHs) fell 1.7% as chipmakers generally declined, offsetting gains by chip-equipment companies.
The SPDR S&P Metals and Mining ETF (XME) went as low as 0.05%, reversing the intraday rebound. And the Global X US Infrastructure Development ETF (PAVE) rose 0.85%. The US Global Jets ETF (JETS) closed at a low of 1.2%, its fifth straight loss.
Reflected in more speculative story stocks, ARK Innovation ETF (ARKK) fell tum.7% and ARK Genomics ETF (ARKG) .1.15%. Tesla stock is the top holding in ARK Investment’s ETF.
Market Rally Analysis
The Dow Jones put solid intraday gains below the breakaway and on session lows. The blue-chip index has yet to test its 21-day line. The S&P 500 index is now below its 21-day line, not far from the 50-day line.
The Nasdaq has fallen below its 21-day line, well below its 50-day line. The tech-heavy index now points to its March low.
Russell 2000 hit resistance at his 50-day line and fell sharply. Still above the March 5 intraday lows, the small-cap index closed at its worst level since February 1.
What you should do now
In Vegas, home always wins. It was very difficult to make money in the casino-style stock market boom. A gain of 5% can slip up to 2%, followed by a loss of 5%. A loss of 2% can quickly turn into 10% or more. Investors who break or lose one trade will be dragged into another breakout, where the odds are low.
Do not continue the cycle. With sales conditions automatically declining over the last few days, investors should make minimal contact at market rallies. While the position of long-term winners or pilot couple is good, there is nothing wrong with coming in full cash.
At some point the stock market rally will strengthen or break. If it is the former, there will be plenty of opportunities to take advantage of the obvious uptrend. If it is the latter, you should not invest heavily in it.
Stay engaged. A rally in the stock market could signal a rapid move. So keep your watchlists ready. A lot of stocks from different sectors will quickly look attractive in a healthy stock market boom.
Follow Ed Carson on Twitter IBD_ECarson For stock market updates and more.
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