Dow Jones Futures: Stock Market Rally Underway, But Don't Go Until This Happens

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Dow Jones futures volition unfastened connected Sunday evening, on with S&P 500 futures and Nasdaq futures. A caller banal marketplace rally effort got underway precocious past week, closing disconnected lows Thursday and surging higher connected Friday. But the large indexes inactive fell sharply for the week.

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Investors should hold to spot if the marketplace rally continues to physique momentum and stages a follow-through day to corroborate the caller uptrend.

Chevron (CVX) and fertilizer person CF Industries (CF) are astir aboriginal entries, portion Albemarle (ALB) and Broadcom (AVGO) person a small much enactment to do. Merck (MRK) didn't enactment successful Friday's alleviation rally, but closed up for the week and successful a buy zone.

Meanwhile, Tesla banal and Twitter (TWTR) volition stay successful focus. Tesla (TSLA) rebounded connected Friday, but inactive had a pugnacious week. Twitter banal sold disconnected past week, particularly connected Friday arsenic Tesla CEO Elon Musk said the woody was "temporarily connected hold."

MRK banal and CF are connected SwingTrader. CF banal and AVGO banal are connected the IBD 50. CF, Merck and CVX banal are connected the IBD Big Cap 20. CF Industries was Friday's IBD Stock Of The Day.

The video embedded successful this nonfiction discussed a volatile marketplace week and analyzed Chevron, CF Industries and Albemarle stock.

Dow Jones Futures Today

Dow Jones futures unfastened astatine 6 p.m. ET connected Sunday, on with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight enactment successful Dow futures and elsewhere doesn't needfully construe into existent trading successful the adjacent regular stock market session.


Join IBD experts arsenic they analyse actionable stocks successful the banal marketplace rally connected IBD Live


Stock Market Rally Attempt

The banal marketplace sold disconnected hard, with the large indexes hitting 52-week lows earlier a large betterment from Thursday's lows. A nascent banal marketplace rally effort is underway.

The Dow Jones Industrial Average inactive fell 2.1% successful past week's stock marketplace trading. The S&P 500 scale sank 2.4%. The Nasdaq composite retreated 2.8%. The small-cap Russell 2000 gave up 2.5%.

The 10-year Treasury output tumbled 19 ground points to 2.93%, adjacent with Friday's 12 basis-point surge. The 10-year Treasury output deed 3.17% connected Monday and 2.82% connected Thursday.

U.S. crude lipid futures edged up 0.7% for the week to $110.49 a barrel, helped by Friday's 4.1% jump.

There's increasing anticipation that the Chinese authorities volition easiness lockdowns successful Shanghai arsenic Covid cases diminution That would beryllium bully quality for the banal market, but particularly for commodities specified arsenic crude lipid and copper.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slumped 4% past week, portion the Innovator IBD Breakout Opportunities ETF (BOUT) gave up 1.9%. The iShares Expanded Tech-Software Sector ETF (IGV) besides retreated 1.9%. The VanEck Vectors Semiconductor ETF (SMH) recovered to dip conscionable 0.2%, with AVGO banal a notable component.

SPDR S&P Metals & Mining ETF (XME) sold disconnected 7.8% past week. The Global X U.S. Infrastructure Development ETF (PAVE) skidded 3.4%. U.S. Global Jets ETF (JETS) descended 6.2%. SPDR S&P Homebuilders ETF (XHB) edged down 0.1%. The Energy Select SPDR ETF (XLE) mislaid 2.6%, with CVX banal a large holding. The Financial Select SPDR ETF (XLF) declined 3.5%. The Health Care Select Sector SPDR Fund (XLV) mislaid 0.9%. MRK banal is simply a cardinal XLV component.

Reflecting more-speculative communicative stocks, ARK Innovation ETF (ARKK) closed down 4.45% past week and ARK Genomics ETF (ARKG) 1,2%, but roared backmost from monolithic losses precocious successful the week. Tesla banal is the No. 1 holding crossed Ark Invest's ETFs.


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Stocks To Watch

Chevron banal fell 1.6% to 167.90 past week, but rebounded aft Monday's 6.7% tumble, closing supra its 50-day line. CVX banal has a flat base with a 174.76 buy point. Investors could usage a bounce disconnected the 50-day enactment arsenic an aboriginal entry, possibly utilizing the May 6 precocious of 170.97 arsenic a circumstantial trigger. The relative spot line is astatine highs, reflecting Chevron stock's outperformance vs. the S&P 500 index.

CF banal popped 4% to 103.85 past week, staging a large upside reversal aft plunging 9% connected Monday. On Friday, the fertilizer shaper rebounded supra its 50-day enactment and crossed a trendline, offering an aboriginal entry. But buying successful the existent marketplace adds to risk.

Merck banal fell 0.5% connected Friday, sitting retired the large marketplace rebound. But the cause elephantine roseate 2.3% to 90.39 for the week. Notably, MRK banal cleared an 89.58 cup-with-handle bargain point.

ALB banal slumped 5.6% to 228.02 past week, but recovered enactment astatine its 50-day enactment connected Thursday and reclaimed its 200-day enactment connected Friday. Lithium elephantine Albemarle is successful a consolidation going backmost astir six months with an emerging bargain constituent of 291.58. But investors could usage 243.28, conscionable supra the anterior week's post-earnings high, arsenic an aboriginal entry. The 248 level besides has been a cardinal absorption area. Sociedad Química y Minera (SQM) looks adjacent better, connected the cusp of a trendline aboriginal introduction and a 50-day enactment bounce. But SQM, which produces fertilizers arsenic good arsenic lithium, has net connected Wednesday.

AVGO banal climbed 1.4% to 588.24 past week, uncovering enactment astatine its 200-day enactment and coming up toward its 50-day. Broadcom has a cup-with-handle basal with a 645.41 bargain point, according to MarketSmith analysis. But a determination supra the 50-day enactment would coincide with breaking a downtrend successful the large-ish handle, offering an aboriginal entry. The RS enactment for AVGO banal is already astatine a caller high.

Tesla And Twitter Stock

Tesla banal popped 5.7% to 769.59 connected Friday, continuing to bounce aft hitting a 2022 debased of 680 intraday Thursday. But shares skidded 11.1% for the week. TSLA banal needs a batch of repair time, with the 50- and 200-day lines among the hurdles.

Tesla banal has been pressured by the crisp marketplace correction arsenic good arsenic Shanghai works accumulation shutdowns. But different origin has been Elon Musk's Twitter takeover plans. Musk is relying connected a batch of financing backed by his TSLA banal holdings, which is much concerning arsenic Tesla stock prices decline. However, helium has worked to get different investors to articulation him.


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Twitter Stock

But volition Musk spell up with the Twitter deal? Investors person had their doubts each along. On Friday, Musk said the woody was "temporarily connected hold," though helium aboriginal said helium was "still committed" to the acquisition. Musk cited a Twitter study connected fake accounts for his "hold," but the societal web has fixed those figures for years. Plus, Musk cited spam accounts arsenic 1 of the reasons for a Twitter takeover.

Musk could determine to wage a $1 breakup interest to locomotion away. Or, helium could effort to renegotiate the $54.20-a-share terms substantially lower. If there's nary deal, TWTR banal could tumble good beneath 40.

Twitter banal tumbled 9.7% to 40.70 connected Friday, gapping beneath its 50-day line. Shares plunged 18.3% for the week. That's a agelong mode from the TWTR banal takeover price. It besides means that anyone who bought TWTR banal since Musk belatedly disclosed a sizable Twitter involvement is underwater.

Market Rally Analysis

The banal marketplace had a agelong overdue rebound connected Friday, with immense terms gains connected the large indexes. But it was conscionable 1 day. The crisp driblet successful measurement connected some the Nasdaq and NYSE suggests a batch of Friday's enactment was abbreviated covering alternatively than large institutions stepping in.

Despite the market's large gains from Thursday's intraday lows, the large indexes inactive fell sharply for the week, hitting 52-week lows. The large indexes are beneath their 10-day moving averages, with the 21-day and 50-day lines rather a mode off.

Friday marked time 2 of a marketplace rally effort for each the large indexes. The Nasdaq closed fractionally higher connected Thursday. The S&P 500 and Dow Jones declined, but closed precocious capable successful their ranges to suffice arsenic "pink" rally days. In a fewer days, investors could look for a follow-through time connected 1 oregon much of the large indexes. A follow-through time requires a beardown terms summation successful higher measurement than successful the anterior session.

Beaten-down stocks led the marketplace for a 2nd consecutive session, which is not surprising. But these names are obscurity adjacent to being actionable.

Commodity plays specified arsenic Chevron and CF banal are among the best-positioned close now. EV artillery play ALB banal and chipmaker Broadcom could beryllium actionable a fewer days from now, possibly arsenic an existent follow-through time occurs.

A fewer drugmakers specified arsenic Merck banal and Eli Lilly (LLY) are successful position, but volition these antiaircraft maturation stocks instrumentality part? On the flip side, if the marketplace continues to struggle, Big Pharma volition apt clasp up amended than astir stocks.


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What To Do Now

If you are an particularly assertive trader, you could person played Friday's large bounce. A bully enactment would person been a wide marketplace ETF. But anyone jumping successful rapidly has to beryllium acceptable to standard retired adjacent faster.

But Friday was conscionable 1 bully day. Even if you number Thursday's afternoon's bounce, the marketplace has been rising for small much than 1 league amid relentless selling since aboriginal April amid a marketplace correction going backmost to commencement of 2022 oregon earlier.

There's thing incorrect with waiting for a follow-through day. Even if we get an FTD, investors shouldn't ramp up vulnerability quickly.

Build up your watchlists this weekend, looking for stocks with beardown comparative spot and mounting up successful bases oregon pulling backmost to cardinal support.

Read The Big Picture every time to enactment successful sync with the marketplace absorption and starring stocks and sectors.

Please travel Ed Carson connected Twitter astatine @IBD_ECarson for banal marketplace updates and more.

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