Dow Jones futures rose slightly at the end of Wednesday, along with the S&P 500 and Nasdaq futures. HR (HR), GrowGeneration (GRWG) and KB Home (KBH) main earnings of the security after closing.
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The stock market recovery had another approximate session, with the main indices closing at session lows. The Dow Jones eliminated a solid gain, while the S&P 500 detracted from an important level. The Nasdaq dropped to less than 13,000.
Applied Materials (AMAT) briefly canceled the point of purchase, while several chip-gear competitors also rose Intel (INTC) spending plans. But even they disappeared. The current market environment has not been healthy for active investors. In fact, it is the worst possible market.
In Las Vegas, casinos have to pay on slot machines enough to keep players putting coins and raising levels. If slots never had winners, people would stay away. In the current market recovery, disruptions are taking place, which attracts investors. But recent disruptions or early entrances are struggling, with stocks falling into the water, slowing down to sales zones or plummeting suddenly.
The general market has been moving sideways downwards in the past week, as it rotates in and out of various sectors. This makes it difficult to make any progress.
Biden and the Fed are changing the game by actions
Tencent Music, China Stocks Plunge
Tencent Music Entertainment (TME) fell 27%, plummeted below its recent point of purchase and then its 50-day line. It was a bad day for China’s stocks, with Nio (NIO), JD.com (JD) and Tencent’s shares fell 10%, 5.3% and 5.1%, respectively. Tencent (TCEHY) surpassed earnings views on Wednesday morning. Vipshop (VIPS), which was well above any point of purchase, plummeted 21%.
China has proposed requiring Internet companies to store their customers’ data in a government joint venture. China’s central bank is also reducing liquidity increases, a drag on stocks.
Highly valued growth stocks outside China were also notable losers. Tesla (TSLA) fell 4.8%, continuing to fall from its short-term highs and main moving averages. The “good news” is that Tesla’s shares and most of the other big 2020 winners have been badly damaged, so they shouldn’t have tried investors in the past few weeks.
AMAT stock, Chip Gear Plays Rally
On the other hand, some chip equipment manufacturers have jumped on the news that Intel will build two new factories in Arizona and become a chip foundry.
AMAT’s shares were the winners, reaching a record of 125.80 intraday, offsetting a short consolidation. But stocks fell to session lows, although they still closed at 4.1% to 121.10. This is back in a handle-like area. The relative strength line for Applied Materials has reached a record high.
ASML (ASML), KLA Corp. (KLAC) and other chip gear manufacturers have also advanced, although they have given up much of their morning earnings. But Intel’s shares erased an initial 6% gain to close 2.3%. Taiwan Semiconductor (TSM), which faces a possible bigger threat from Intel, fell 5.2% to a 2021 closing low.
Meanwhile, games for commodities, infrastructure and travel have recovered somewhat. But investors may have already reached the limit of losses. Those who held back recovered only part of Tuesday’s losses, let alone last week’s declines.
Main earnings
HR earnings and revenues exceeded quarterly views. RH shares jumped 9% overnight, signaling a move back above a point of purchase. The HR stock fell 4.6% to 485.11. On Monday, RH released a 524.32 point of purchase from a two-month consolidation, but fell on Tuesday.
GrowGeneration’s earnings are still pending. GrowGeneration’s shares plunged 12% to 45.81 on Wednesday, reducing its 50-day line.
KB Home’s earnings outnumbered views, while sales lost. KBH shares fell 4% in extended trading. The shares rose 0.1% to 43.39 on Wednesday, not far from long-term highs.
The shares of TME and Taiwan Semiconductor are on the IBD Leaderboard. The shares of Tencent Music, TSM, GrowGeneration and Tesla are also in the IBD 50. The shares of the GRWG are in the IBD Big Cap 20.
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Dow Jones Futures Today
Dow Jones futures were up 0.2% against fair value. S&P 500 futures were up 0.2%. Nasdaq 100 futures advanced 0.2%.
Keep in mind that overnight action on Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks at the stock market’s high on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 125.30 million. Deaths from Covid-19 reached 2.75 million.
Coronavirus cases in the US reached 30.69 million, with deaths above 558,000.
Stock market rally
Overview of the US stock market today |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain / Loss | % Change |
| Dow Jones | (0DJIA) | 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 |
| IBD 50 | (FFTY) | 42.50 | -2.32 | -5.18 |
Last updated: 4:40 PM ET 3/24/2021 |
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The stock market recovery showed a change in character, with the mixed picture becoming largely negative and technical damage spreading beyond technology companies and small caps.
The Dow Jones Industrial Average closed a fraction in Wednesday’s stock market trading, erasing a solid early morning gain. The S&P 500 index declined 0.55%, below its 21-day exponential moving average. The Nasdaq compound fell 2%. The Russell 2000 plunged 2.3% and the dip of 3.6% on Tuesday.
This is an important day to read The Big Picture and stay in sync with the direction of the market and the leading stocks and sectors.
The 10-year Treasury yield fell 2 basis points to 1.61%, falling for the fourth consecutive session after reaching a pandemic peak last week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) 5.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 4.6%. On Monday, FFTY and BOUT were above their 50-day lines, but are now falling towards March lows.
The iShares Expanded Tech-Software Sector (IGV) ETF fell 2.7%. VanEck Vectors Semiconductor ETF (SMH) fell 1.7%, as chip makers fell overall, offsetting gains from chip equipment companies.
The SPDR S&P Metals & Mining ETF (XME) fell 0.05%, erasing a strong intraday recovery. and the Global X US Infrastructure Development (PAVE) ETF increased 0.85%. US Global Jets’ ETF (JETS) reversed down to close 1.2%, its fifth consecutive loss.
Reflecting more speculative story actions, ARK Innovation ETF (ARKK) fell 5.7% and ARK Genomics ETF (ARKG) 5.15%. Tesla’s shares are the largest share in ARK Invest’s ETFs.
Market Rally Analysis
The Dow Jones erased a solid intraday gain to close just below breakeven 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, with the 50-day line not far away.
Nasdaq fell below its 21-day line, which is below its 50-day line. The high-tech index now points to March lows.
Russell 2000 hit resistance in its 50-day line and drastically reversed downwards. Although still above its March 5 intraday lows, the small cap index closed worst on February 1. On Tuesday, Russell plummeted to close below its 50 days for the first time since October 30th.
What you should do now
In Vegas, the house always wins. In a casino-style stock market boom, making money has been very difficult. A gain of 5% may drop to 2% and then continue to fall to a loss of 5%. A loss of 2% can quickly become 10% or more. While they tie or lose in a trade, investors will be sucked into another breakdown, where the odds are low.
Do not continue the cycle. Investors should have minimal exposure to the market’s recovery, automatically reducing selling positions over the past few days. Some long-term winners or pilot positions are fine, although there is nothing wrong with being entirely in cash.
At some point, the stock market’s rise will either strengthen or collapse. If it is the first, there will be many opportunities to take advantage of a clear upward trend. If it’s the latter, you don’t want to invest heavily in it.
Stay committed. The stock market recovery can quickly signal that it is in a stronger position. So, have your watch lists ready. Many stocks in a variety of sectors would soon appear attractive in a healthier stock market recovery.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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