Dow Jones futures rallied Wednesday night, along with S&P 500 and Nasdaq futures. The attempted rally in the stock market sparked a decent session for the major indices, closing near the highs as the 10-year Treasury yields declined.
Once again, a large number of rising stocks have shown strength at best in a weak market. This made up for weakness in Apple stock, as well as in financials and airlines.
AMD Shares, CrowdStrike (CRWD), Bill.com (BILL) and Sea Limited (SE) has moved above the buy points. All four bounced off their 50-day or 10-week lines, breaking the downtrend in the process. Meanwhile, Snowflake (SNOW) cleared a mini consolidation that could be seen as a handle on a long and deep base.
Taiwan semiconductor (TSM) profit on tap. Although TSM shares peaked in February, the world’s largest chip factory remains the industry leader. He makes chips for Advanced Micro Devices (AMD), Apple (AAPL), Nvidia (NVDA) and more.
TSM’s understanding of the chip shortage and its own capex plans will be important to the industry and beyond, even if TSM doesn’t make a big move.
UnitedHealth (UNH) and Domino’s pizza (DPZ) also reports this early Thursday morning. Well go ahead Bank of America (BAC), Citigroup (WITH), Morgan Stanley (RS), Wells Fargo (WFC) will report earnings early Thursday morning. They are watching the profits of the giant Dow Jones, which have exceeded expectations. Jp morgan chase (JPM).
Financials on Wednesday were notable underdogs, likely due to the fall in 10-year Treasury yields for the second straight session. JPM shares fell 2.4% below their recent buying point. BofA, Citigroup and Wells Fargo fell slightly while Morgan Stanley rose.
Delta Air Lines (DAL) triggered a sell-off in airlines. Delta reported profit after six quarters of losses from the pandemic, but is forecasting a small loss in the fourth quarter due to soaring fuel prices. DAL shares fell 5.8%, which was the biggest loss of the day for the S&P 500. Other airlines also fell heavily.
AMD shares are on the IBD leaderboard. AMD and SE shares are listed on SwingTrader. Bill.com is at the 50th IBD level. The IBD stock of the day was announced by AMD on Wednesday.
The video embedded in this article focuses on the Wednesday market rally and is analyzed. Datadog (DDOG), Sea Ltd. and CRWD stock.
Dow Jones Futures Today
Dow Jones futures were 0.15% above fair value. S&P 500 futures were up 0.2%, while Nasdaq 100 futures were up 0.3%.
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.
Stock market rally
The attempted rally in the stock market ended on Wednesday with a slight or solid gain, but the best thing was that the indices finally closed near session highs.
The Dow Jones Industrial Average closed unchanged in trading on the stock market on Wednesday. JPMorgan and American Express (AXP) put pressure on the Dow. The S&P 500 rose 0.3%, despite financials, airlines and many energy companies putting pressure on the overall index. Composite Nasdaq added 0.7%. Small-cap Russell 2000 shares gained 0.5%.
The CPI was a little hot and inflation returned to a 13-year high of 5.4%. But core inflation remained at 4%.
The 10-year Treasury yield rose briefly to 1.6% after the CPI report and before the stock market opened, but returned to the close and declined 3 basis points at 1.55%.
The 10-year bond yields have not changed much since the minutes of the September Fed meeting were released at 2:00 pm ET. The politicians said that a “gradual process of gradual transition” could begin in mid-November and the acquired assets would be completely phased out by mid-2022. Some participants favored more aggressive cuts in bond issues. The Fed Minutes provided a bit more detail, but did not change expectations for a formal decision to cut bond issues at a meeting in early November.
Crude oil prices in the United States fell, but rose to lows and stayed above $ 80 a barrel. Copper futures jumped nearly 4%.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.7% to close just above its 50-day line. ETF Innovator IBD Breakout Opportunities (BOUT) shed 0.35%. IShares Expanded Tech-Software Sector (IGV) ETFs were up just over 2%. CRWD and Bill.com shares are both IGV components. The VanEck Vectors Semiconductor ETF (SMH) added 0.85% on shares of TSM and major AMD holdings.
The SPDR S&P Metals & Mining ETF (XME) added 1.5% and the Global X US Infrastructure Development ETF (PAVE) added 0.3%. The US stock index Global Jets (JETS) fell 2.5% as it affected the shares of DAL and other airlines. SPDR S&P Homebuilders ETF (XHB) added 0.5%. Energy Select SPDR ETF (XLE) fell 0.1%, while Financial Select SPDR ETF (XLF) fell 0.6%.
ARK Innovation ETF (ARKK) rose 1.5% and ARK Genomics ETF (ARKG) gained 1.1%.
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Bill.com shares jumped 5.2% to 294.71, extending from the 21-day and 10-week lines. Trading volume was slightly below average. By the end of the week, BILL may have a base with a buy point of 302.09.
CRWD shares rose 7% to 270.44 in large volume, bouncing off its 50-day line and breaking the trend line, suggesting early entry. The official buy point for CrowdStrike shares is 289.34 from the base, which began in late August.
SE shares rose 7.5% to 349.35, bouncing off the 21-day and 50-day lines and easily breaking the downtrend. Both offered early market entry for the Asian e-commerce giant. The volume was strong. The relative strength line has reached a new high, while SE shares remain at their core. This is a bullish sign, marked as a blue dot on MarketSmith.
AMD shares were up 3.9% to 109.16, rebuilding their 50-day line again and this time breaking some short-term resistance. Investors can use 107.95, the October 7 high, as an early entry. AMD share trading volume was below average but the highest in a month.
AMD has a double bottom bottom with a buy point of 115.59.
SNOW shares jumped 4.8% to 327.85, their highest close for the year. Snowflake hit 329.75 for the day, above the top of the short consolidation. This can be seen as leverage on a huge deep base going back to December last year, when SNOW stock hit a record 429. But the stock did break through tiny resistance within the handle and topped the trendline. The volume was below average, but by the evening it gained momentum.
Market rally analysis
The attempted rally in the stock market finally ended near session highs, with the Nasdaq in the lead, even as Apple’s metropolitan stock dropped slightly. This interrupted a four-day series of bad closings for major indices, especially the Nasdaq. But all major indices remain below their falling 21-day moving averages, with the 50-day line even further ahead. There was nothing close to the end of the day to confirm a new rally attempt.
Some of them reflect the weakness of tech metropolises. Apple shares pushed losses on Wednesday, but are near recent lows and close to their 200-day line. Microsoft (MSFT) is the only one trillion dollar stock above its 50-day border, and hardly.
The market continues to correct.
But don’t tell the mainstream stocks about it. The number of growth stocks signaling a buy or continuing to rise has been impressive in recent days. Since the Nasdaq actually rallies and closes near intraday highs, it should come as no surprise that the gains had another strong session as shares in AMD, CRWD and others showed.
Financial stocks are falling alongside Treasury yields, even though 10-year yields are still skyrocketing over the past few weeks. Energy and fertilizer stocks are also on hold, but this could be helpful after strong moves in the past few weeks.
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What to do now
However, the major indices remain below the 21-day and 50-day lines. The market has not yet shown itself. Major indices could easily make drastic declines over the next few sessions – possibly after a promising fraud – to undermine recent lows. By then, many of the growing companies that have done so well lately are likely to be under pressure.
There is no doubt that shopping opportunities have increased this week. Overall, these deals were successful in the short term.
While the temptation to boost yields was strong on Monday and Tuesday as major indices closed near their lows, on Wednesday it may have been almost overwhelming.
If you’ve made several new purchases in recent days, consider taking a partial profit after a relatively modest profit to ensure you walk away winning. Cut losses quickly.
For those mostly on the sidelines, there will be a time, whether tomorrow, next week, next month, or even next year, when a confirmed market rally occurs. Then there will be many possibilities.
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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