Dow Jones Futures: Market rally attempt has begun, Netflix leads 7 shares, showing strength; Tesla Supply Loom

Dow Jones futures will open Sunday night alongside S&P 500 and Nasdaq futures. Major indices and leading stocks suffered heavy losses in the past week, which triggered a shift in the market towards a “correction”.




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Investors are still Tesla (TsLA) delivery watch. The EV maker could release production and sales data for the third quarter this weekend or early next week.

The S&P 500 and Nasdaq both dipped below their 50-day lines and reached their lows on September 20. Growth stocks have had their worst week since the coronavirus crash. While stocks recovered on Friday, this is the first day of a market rally attempt. At the moment, the market remains in a downtrend.

In such an environment, investors must have a limited market presence or have full cash. Look for stocks with strong relative strength lines.

Netflix (NFLX), Datadog (DDOG), Mosaic (MOS), American Express (AXP), Bill.com (BILL), Quanta Services (PWR) and Paychex (PAYX) all have RS lines at or near their highs, reflecting their superiority over the S&P 500.

Netflix stocks are in the shopping area right now. With a healthy rally in the stock market, investors could buy NFLX or see early access to Datadog, Mosaic, Paychex and AXP stocks.

Also watch out for Microsoft (MSFT) and Google (GOOGL). The RS lines of these tech mega-caps are not far from the maximum. If MSFT and Google can regain their 50-day positions, this is a good sign for the Nasdaq.

As for TSLA shares, they are in the buy zone. Tesla’s RS line hasn’t hit a new high but is at its best in nearly six months.

Tesla, Microsoft and Google are on the IBD leaderboard. Microsoft and Google are also long-term leaders of IBD. American Express and PWR shares are listed on SwingTrader. Google shares are listed at IBD 50.

The video included in this article analyzes the general dynamics of the stock market and looks at Netflix, Mosaic, and DDOG stocks.


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Infrastructure invoice still not ready

Meanwhile, the fate of the $ 1.2 trillion infrastructure bill remains unclear. Progressives in the House of Representatives are demanding significant progress in at least a package of taxes and reconciliation costs of several trillion dollars before they vote on a bipartisan infrastructure bill. But now Democratic leaders appear to be trying to convince centrist Democrats to agree to a $ 2 trillion reconciliation package versus a long-publicized $ 3.5 billion package. President Biden met with Democratic lawmakers on Friday, telling them that the infrastructure bill would not be passed until there was “agreement” on the reconciliation bill.

In addition, although Congress extended government funding to early December last week, lawmakers still have to approve a debt limit increase. Janet Yellen’s Treasury has named October 18 as the likely date of the government’s default. Raising the debt limit without a Republican vote could complicate the reconciliation package, which in turn could keep the infrastructure bill on hold.

Dow Jones Futures Today

Dow Jones futures will begin trading at 6:00 pm ET on Sunday. The same will be true for S&P 500 and Nasdaq 100 futures.

Remember that overnight activity in Dow futures and elsewhere does not necessarily mean actual trading in the next regular stock market session.


Join IBD experts who analyze trending stocks in the stock market rally at IBD Live.


Coronavirus News

The number of coronavirus cases worldwide has reached 235.19 million. Deaths from Covid-19 have exceeded 4.80 million people.

The number of coronavirus cases in the United States has reached 44.44 million, and the number of deaths has exceeded 718,000.

The number of new cases of Covid is dropping sharply in the US and around the world, but is still quite high.

Attempt to Rally in the Stock Market Begins

The stock market ended the week with significant losses despite a rebound on Friday.

The Dow Jones Industrial Average fell 1.35% in the stock market last week. The S&P 500 Index lost 2.2%. Composite Nasdaq fell 3.2%. Small-cap Russell 2000 shares sank 0.3%.

The 10-year Treasury yield, which surged to nearly 1.57% on Tuesday morning, ended the week at 1.465%, down a basis point. The decline in 10-year yields on Friday helped support the stock at the end of the week.

Growth stocks were hit hard. Among the top ETFs, the Innovator IBD 50 ETF (FFTY) fell 8.7% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 4.1%. IShares Expanded Tech-Software Sector (IGV) ETFs fell 4.2%, with Microsoft holding the top spot. VanEck Vectors Semiconductor ETF (SMH) shares fell 5.8%.

The ARK Innovation ETF (ARKK) fell 5.1% and the ARK Genomics ETF (ARKG) fell 4.9%, reflecting more speculative news. Tesla shares remain the # 1 holder of ARK Invest ETFs, although Katie Wood has sold a significant portion of ARK in recent weeks.

The rest of the sectors were mixed.

The SPDR S&P Metals & Mining ETF (XME) rose 2.6%, while the Global X US Infrastructure Development ETF (PAVE) fell 0.9%. The US stock index Global Jets (JETS) added 2.5%. SPDR S&P Homebuilders ETF (XHB) fell 4%. Energy Select SPDR ETF (XLE) rose 5.8%. Financial Select SPDR ETF (XLF) fell 0.3%. AXP shares are notable stocks of XLF.


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Tesla supplies

The electric vehicle giant is set to release third-quarter supply and production data soon, possibly over the weekend or no later than next Tuesday.

The latest upwardly revised analyst consensus estimates Tesla’s shipments will reach approximately 232,000 units. Tesla sold the Model Y in Europe for the first time, which likely boosted sales in the region. Tesla exported most of its products in Shanghai in July and August, mainly to Europe, but September appears to be a significant indicator for local sales in China.

The chip shortage could hold back Tesla’s production, but so far it has only slowed production growth. Meanwhile, global car production has plummeted, boosting demand and prices for Tesla.

Even without Tesla deliveries, next week is going to be a big one for the EV maker.

On October 8, Tesla will begin rolling out the beta FSD to Full Self-Driving owners and subscribers looking to take advantage of the as-yet-unfinished driver assistance software. Elon Musk recently said that Tesla will be launching a beta version for 1,000 drivers a day, starting with those with the highest scores in driving safety tests. Keep in mind that, despite the name, Full Self-Driving is a Level 2 practice system.

Meanwhile, Tesla will host its annual shareholder meeting at its Austin plant on October 7 and an event at its Berlin plant on October 9. Perhaps Musk will give hints when the Austin and Berlin factories begin production.

But the rivals are growing. Lucid Motors (LCID) has begun production of its $ 169,000 Lucid Air EV electric vehicle, which boasts a range of 520 miles. Deliveries will begin this month. Rivian has filed for an IPO with its first electric pickup truck on the market.

Tesla Stock

Tesla shares rose 35 cents to 774.74 in a week, holding above the 764.55 buy mark cleared on September 24. The RS line is still not in line with historical levels, but has returned to its short-term highs in April.

Market analysis

Major indices suffered heavy losses last week. Worse, the S&P 500 and Nasdaq have broken the 50-day line and recent lows. It was nice to see the major indexes rebound on Friday, but it was only one day. The anemic trading volume, especially on the Nasdaq, was not encouraging.

After the rally in Treasury yields was headwind for most of the week, the sharp drop in 10-year bond yields on Friday helped boost equities.

If major indices avoid Friday’s lows, we may have an extra day later this week or later. But for now, the market remains in a correction. Major indices are below their 50-day and 21-day moving averages. On the positive side, the Russell 2000 managed to recover its 10-, 21-, 50- and 200-day positions in one fell swoop on Friday.

Rising stocks have had a terrible week. The weekly decline in FFTY was the worst since the coronavirus crash. This happened in the wake of an active upward push for stocks.

Growth stocks or many of them may fade into the background in the coming weeks.

Energy, finance and travel stocks performed relatively well last week. Energy and banking stocks tend to have the most attractive charts, but these sectors are prone to fluctuations in energy prices and Treasury bond yields, respectively. Road stocks may have a longer tailwind. With the Covid delta wave seemingly disappearing in the US and around the world, more people will be willing to travel, especially with governments lifting or easing restrictions on cross-border travel.


Lead the Market to the IBD ETF Market Strategy


What to do now

Investors should keep their positions as low as possible, possibly holding major positions in long-term or recent big winners. There is nothing wrong with being completely cash for now. Having cash during a market correction saves your capital, but also your psychological capital. Trying to capitalize on fixing can be mind-boggling and distorting your point of view. Simply investing during a correction means you are not listening to the market. When the market returns to a steady uptrend, are you ready to take advantage of it?

If you feel compelled to make new purchases, keep them small and cut your losses quickly. Be ready to quickly make at least partial profits in order to lock in profits in an unstable market environment.

For the most part, investors should build their watchlists with a line of relative strength in mind. Stocks like Netflix, Mosaic, Datadog, Paychex, and American Express have strong RS lines. Don’t exclude sectors just because you have a growth bias. Let the market and your screens guide you to potential leaders in the next confirmed uptrend.

Read the big picture every day to stay on top of market trends and leading stocks and sectors.

Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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