Dow Jones futures have been barely increased following Monday’s inventory market sell-off forward of this week’s Fed assembly. Tesla inventory broke down through a key support level, whereas Apple reversed sharply after hitting document highs. And inventory market leaders Advanced Micro Devices and Nvidia fell sharply.
On Monday, the Dow Jones Industrial Average dropped 0.9%. The S&P 500 additionally misplaced 0.9%, whereas the Nasdaq bought off 1.4%. The small-cap Russell 2000 declined 1.4%.
Among the Dow Jones leaders, Apple (AAPL) reversed 2.1% decrease Monday after hitting all-time highs, whereas Microsoft (MSFT) declined 0.9% in today’s stock market. Home Depot (HD) and Nike (NKE) stay beneath new buy points.
Electric automobile chief Tesla (TSLA) skidded 5% Monday. Its rival, Rivian (RIVN), climbed 3.7%. Lucid Group (LCID) bounced 4%. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) posted sharp losses.
Among Monday’s prime shares to look at, Arista Networks (ANET), Driven Brands (DRVN) and Louisiana-Pacific (LPX) are in or close to new purchase zones. Amid the current inventory market volatility, traders ought to nonetheless be growing watchlists, and keep away from making new purchases till the market’s present rally try phases a follow-through day.
Microsoft and Tesla are IBD Leaderboard shares. Arista featured on this week’s Stocks Near A Buy Zone column and was Monday’s IBD Stock Of The Day. , whereas Driven Brands was in final week’s IPO Leaders story.
Dow Jones Futures Today: Fed Meeting
After the inventory market shut Monday, Dow Jones futures, together with S&P 500 futures, rose 0.2% vs. honest worth, whereas Nasdaq 100 futures gained 0.1%. Remember that premarket motion in Dow Jones futures and elsewhere would not essentially translate into precise buying and selling within the subsequent common stock market session.
Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) dropped 1.4% Monday, whereas the SPDR S&P 500 ETF (SPY) descended 0.9%. The Innovator IBD 50 ETF (FFTY) slid 3.4%, nearing correction lows.
U.S. Stock Market Today Overview
Last Update: 4:28 PM ET 12/13/2021
Elsewhere, the 10-year Treasury yield traded all the way down to about 1.42% Monday.
On Tuesday, the Federal Reserve’s two-day assembly will kick off with the Fed set to launch its resolution on Wednesday following the conclusion of the coverage assembly. The Fed is expected to maneuver shortly to wind down its bond-buying program and sign that it’ll increase rates of interest subsequent 12 months in an effort to curb fast-rising inflation. The Federal Reserve’s new quarterly financial projections are anticipated to pencil in two charge hikes for 2022.
Stock Market Rally Attempt
The main inventory indexes posted weak performances Monday, because the Nasdaq once more examined its essential 50-day benchmark. Despite the losses, Monday marked Day 6 of new rally attempts on the Nasdaq and S&P 500, and Day Eight for the Dow Jones industrials.
Although indexes are nonetheless trying to provoke a rally, the market correction is not over but; a number of days do not make a development. Starting on Day 4, you might be in search of a significant index to rise sharply in increased quantity than the prior day. That would point out a follow-through day, and sign the beginning of a possible uptrend.
Until such a sign seems, the market outlook stays a market in correction. Investors ought to be avoiding new purchases and sustaining watchlists of prime development shares. Be positive to maintain a detailed eye in your portfolio to be sure you’re defending your positive aspects and reducing losses shortly.
Now, whereas the market remains to be correcting, it is a good time to seek for shares that would grow to be the subsequent uptrend’s leaders. One software useful in such a search is the relative strength line. The RS line measures a inventory’s value efficiency vs. the S&P 500. If the inventory is outperforming the broader market, then the RS line angles upward. If a inventory is performing worse than the broad market, then the road will level decrease.
After Monday’s session, The Big Picture commented: “Parsing the sector, however, software remains a trouble spot. The iShares Expanded-Tech Software ETF (IGV) is more than 9% below prior highs. Cybersecurity and enterprise software are chief culprits in the software sector. Those industry groups are off about 11% and 18%, respectively, from prior highs.”
For extra every day inventory market commentary, take a look at IBD’s The Big Picture.
Stocks Market Leaders Sell Off: AMD, Nvidia
Both shares stay above their 50-day line, however their cushions are disappearing. If their 50-day strains are unable to supply substantial assist, then additional weak spot can be anticipated.
Dow Jones Stocks To Watch: Home Depot, Nike
Home Depot inventory stays slightly below a 416.66 purchase level in a three-weeks-tight formation. Home Depot is among the prime Dow Jones performers in 2021, up 52.6% 12 months thus far by Monday’s shut. Shares traded down 2.4% Monday.
Retail chief Nike is tracing a brand new flat base that has a purchase level at 179.20, in keeping with IBD MarketSmith chart evaluation. Shares are looking for assist round their 50-day line following Monday’s 1.3% loss.
Stocks To Watch: Arista, Driven, Louisiana-Pacific
Monday’s IBD Stock Of The Day, Arista Networks, reveals a flat base with a 134.24 purchase level. ANET stock reveals a robust 97 out of an ideal 99 IBD Composite Rating, in keeping with the IBD Stock Checkup. Shares have been up 1.2% Monday.
Positively, the inventory’s RS line is simply off new highs, indicating vital inventory market outperformance in the course of the current weak spot within the main inventory indexes.
IPO Leader Driven Brand shares tried a breakout Monday previous a cup with handle’s 33.47 buy point, in keeping with IBD MarketSmith chart evaluation. But shares reversed decrease, falling over 1% to shut beneath the entry.
Louisiana-Pacific is in purchase vary previous a 73.76 purchase level in a cup with deal with after Monday’s 2.6% loss. The 5% purchase vary tops out at 77.45.
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto triggered the 7%-8% loss-cutting sell rule beneath a cup-with-handle base’s 34.93 purchase level after final week’s tumble, however is making an attempt to rebound. Shares are at their 50-day line after discovering assist across the long-term 200-day moving average. A brand new base could possibly be forming. Shares moved down 3.4% Monday.
Xpeng Motors triggered the round-trip sell signal from a 48.08 purchase level throughout early December’s sharp sell-off. But XPEV shares are again at their 50-day assist stage. Wait for the inventory to type a brand new base, which might supply a brand new entry. The inventory was down 3.2% Monday.
Lucid Motors shares added to Friday’s 3.1% bounce, climbing 4% Monday. LCID stock stays prolonged previous a 28.49 purchase level in a cup-with-handle base, however large positive aspects have dwindled. Shares are actually looking for assist at their 50-day line.
Hot preliminary public providing Rivian rebounded from Friday’s 0.6% decline, rising 3.7% Monday after MotorTrend named the Rivian R1T its 2022 Truck of the Year, calling it “the most remarkable truck we’ve ever driven.”
RIVN shares closed Monday about 34% off their post-IPO highs. The decline is a possible constructive for traders remaining disciplined and ready for an IPO base to type earlier than contemplating a purchase order. The current weak spot is the beginning of Rivian’s first base formation, and final week’s advance is a step in the precise course.
Tesla stock skidded 5% Monday, breaking down by their key 50-day support level, which is a essential benchmark to look at. The inventory closed beneath its 50-day line for the primary time since June 22.
Late Monday, U.S. securities filings confirmed Chief Executive Elon Musk bought one other 934,091 Tesla shares value about $906.5 million. In addition, he exercised inventory choices to purchase 2.13 million shares of Tesla inventory.
Shares traded as excessive as 1,243.49 on Nov. 4, however the inventory ended Monday about 22% off its 52-week excessive.
TSLA shares stay sharply above a 764.55 purchase level in a cup with handle. The EV large is engaged on a brand new base, although that wants one other week to type, with a probable 1,202.05 purchase level. Drawing a development line from the document excessive may supply an early entry round 1,150.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple inventory reversed from document highs Monday, closing decrease after buying and selling as excessive as 182.13. Shares slid 2.1% Monday, closing about 15% previous a 153.27 purchase level out of a cup-with-handle base, in keeping with IBD MarketSmith chart evaluation. The inventory is approaching the 20%-25% profit-taking zone.
Software large Microsoft misplaced 0.9% Monday, giving up part of Friday’s 2.8% achieve. Shares discovered much-needed assist at their 50-day line final week and are as soon as once more approaching new highs. On Oct. 18, Microsoft stock broke out previous a flat base‘s 305.94 purchase level. The 5% purchase zone topped out at 321.24, so the inventory is prolonged.
Be positive to observe Scott Lehtonen on Twitter at @IBD_SLehtonen for extra on development shares and the Dow Jones Industrial Average.
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