Dow Jones futures rose slightly Thursday morning, along with S&P 500 futures and Nasdaq futures, with U.S. markets closed for the Thanksgiving Day holiday.
Stock market rallies were up for a second session on Wednesday. Fed officials expect slower rate hikes to occur “soon,” according the minutes of Wednesday’s November meeting.
The rebounding helped buoy the Nasdaq to lead Tesla (TSLA). This holiday-shortened week has seen major indexes rise steadily. A longer holiday for the rally in the markets could be beneficial.
Key technical resistance and important economic reports should caution investors about increasing exposure.
Dow Jones Futures Today
Dow Jones futures rose 0.1% against fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures climbed 0.3%.
Mainland China reported more Than 31,000 Covid infections, which includes cases without symptoms. These numbers topped the Shanghai lockdown’s mid-April levels. Covid cases with symptoms are still lower than April’s peak.
The Thanksgiving Day holiday will see U.S. stock markets close Thursday. U.S. stock exchanges will close at 1 p.m. on Friday. ET. However, other exchanges around world are usually open on Thursday andFriday.
Do not assume that overnight Dow futures or other actions will translate into trading in the regular stock market session.
Stock Market Rally
While the stock market rallies had some stumbles Wednesday, it was able to maintain its gains thanks to techs.
Initial jobless claims rose three months to the highest point, while continuing claims were at an eight-month peak. S&P Global’s purchasing managers indexes for U.S. manufacturing and services both signaled contraction.
The minutes of the Fed reinforced expectations that a 50-basis rate hike would be possible at the December 14 meeting. Although markets favor a further half-point move in February 2019, there is a good chance that the Fed will raise rates by a quarter of a percentage.
Wednesday’s stock-market trading saw the Dow Jones Industrial Average rise 0.3%. The S&P 500 index climbed 0.6%, led by TSLA stock. The Nasdaq Composite grew 1%. The Russell 2000 small-cap index grew 0.1%
U.S. crude oil prices fell 3.7% to $77.94 per barrel. Natural gas futures jumped 7.2%.
The 10-year Treasury yield fell 5 basis points to 3.711%. The two-year Treasury yield was more closely linked with the Fed rate hike outlook and fell below 4.5%.
For the second consecutive session, the U.S. Dollar fell sharply. This was back near its recent lows.
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SPDR S&P Metals & Mining ETF (XME) edged up 0.3%. U.S. U.S.JETS) nudged 0.1% higher. SPDR S&P Homebuilders ETF (XHB) climbed 0.5%. The Energy Select SPDR ETF (XLE) fell 1.1%. SPDR Fund for Health Care Select Sector (XLV) rose 0.4%. Dow Jones giant UNH stock, is the most valuable holding in XLV.
Tesla stock surged 7.8% to $13.20 on Wednesday. It rebounded from Tuesday’s bear market lows. Citigroup upgraded Tesla from a sale to a holding. TSLA stock has fallen 19.5% this month, and will roughly double in 2022.
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Stocks to Watch
Dexcom stock gained 1.7% to 112.92, supporting the 21 day moving average. After gapping up on October 28th, DXCM stock is now pausing. Dexcom stock is a long-handler with a 123.46 purchase point after a seven-month consolidation. Investors might consider buying DXCM stock at an early entry on the 21-day lines, possibly using Tuesday’s high of 113.88 as a buy point.
Medpace stock declined 1.3% to 218.81 by Wednesday. Since Oct. 25, when earnings were reported, shares have been steadily consolidating at record levels. MEDP stock has struggled to hold onto a year-long, deep cup base. Although shares have experienced some large intraday swings during trading, MEDP stock is on track to form a tight three-weeks pattern by Friday’s close. Investors could use the Nov. 15, 226.57 close as an entry point, which is higher than the bulk of recent trading.
NBIX stock dropped 1.5% to 119.95. NBIX stock fell 1.5% to 118.97, extending from its October breakout. Neurocrine stock is still in a tight three-weeks pattern and will continue to do so for the fourth week, despite a drop to the 50-day line last Wednesday. The buy point is 126.09, but investors might prefer to wait until there’s more action.
The stock of Shockwave soared 4.7%, to 264.06 on Wednesday. This was back above its 21 day line, but it hit resistance at the 50 day line. SWAV stock rebounded after a disappointing breakout in October and a sharp sell-off that continued through earnings. Although a new base will take time, aggressive investors may be able to use a strong move over the 50-day as an opportunity for early entry.
UNH stock gained 1.3% to 529.71. This rebounded above its 50 day and 21 day lines. UnitedHealth stock was once an IBD Long-Term leader and shares many characteristics. A bounce from the 50 day line could be used by investors as an entry point or long-term leader entry. UNH stock should find a new base following a rapid decline from its cup-with handle base.
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Market Rally Analysis
Tuesday’s gains were further aided by Tuesday’s stock market rally. The S&P 500 just topped its Nov. 15 intraday high and closed within 1% of its 200-day line.
The Russell 2000 was right at its 200-day mark.
Although Tuesday’s rebound from Tuesday’s 21-day moving average was aided by the Nasdaq, it is still well below its Nov. 15 high and well below 200-day.
The Dow Jones was just 20 points away from its Aug. 16 intraday peak.
The S&P 500 moving decisively above its 200-day line — which coincides roughly with a yearlong declining-tops trendline — is a huge test for the market rally.
Fed rate expectations could be swayed by a variety of economic data, which could impact the stock market and therefore the stock market. On Wednesday, November 30, the October JOLTS Report will display job openings. Fed chief Jerome Powell will address the audience later in the afternoon. On Thursday, the PCE Price Index, Fed’s preferred inflation gauge will be released along with the ISM manufacturing and jobless index. Friday, November 2, will see the release of the November jobs report.
Ideal scenario is that the market moves sideways for a few more days to allow the line of 21-days catch up and then move into the economic reports.
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What Can You Do Now?
This week’s market rally has seen some nice gains, with more stocks showing buy signals over the past few days. Investors could have added some exposure.
But they may want to be cautious about making significant new buys with the S&P 500 hovering below its 200-day line and so much Fed-critical economic due next week.
Consider taking a partial profit in stocks that are volatile. Stocks have made short-term gains amid a volatile uptrend and sector rotation.
Investors should still be diligent about their investment shopping lists and looking for set-ups and actionable names in a variety of industries.
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