Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures.
The stock market rally suffered sharp losses in the latest week, but rebounded strongly off intraday lows Friday with the S&P 500 and Nasdaq holding critical levels. Likewise, many leading stocks tumbled during the week, often back below buy points, but many showed bullish action on Friday.
Was Friday the start of a sustained bounce, or a blip? Investors need to stay engaged and flexible.
Nvidia (NVDA) held above a buy point Friday. Intuitive Surgical (ISRG), Valero Energy (VLO) and MongoDB (MDB) are in buy areas.
Intuitive Surgical stock is on Leaderboard and SwingTrader. Nvidia stock is on the IBD 50. Valero was Friday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Stock Market Rally
The stock market rally saw sharp losses for the week. On Friday, the S&P 500 and Nasdaq undercut their 50-day moving averages, before bouncing back for a narrowly mixed session.
Senate Democrats proposed reopening the government if expiring Obamacare subsidies are extended for a year. Republicans were dismissive. But markets may be hoping that the shutdown, the longest in history, is getting closer to an end.
The Dow Jones Industrial Average gave up 1.2% in last week’s stock market trading. The S&P 500 index sank 1.6%. The Nasdaq composite tumbled 3%.
The small-cap Russell 2000 lost 1.9%, below its 50-day line, but rebounded higher Friday after hitting its lowest level in nearly two months before reversing higher on Friday.
Leading stocks were hard hit, though many bounced Friday. A number of stocks that flashed buy signals in the past two weeks have round-tripped gains and fallen back below entries, often tripping clear sell signals.
The 10-year Treasury yield fell one basis point to 4.09%.
U.S. crude oil futures lost 2% to $59.75 a barrel last week.
ETFs
The Innovator IBD 50 ETF (FFTY) plunged 9.3% last week. The ARK Innovation ETF (ARKK) dived 9.25% and ARK Genomics ETF (ARKG) lost 10%. The iShares Expanded Tech-Software Sector ETF (IGV) tumbled 5.2%.
FFTY, ARKK, ARKG and IGV knifed far below their 50-day lines, but roared off Friday’s lows.
The VanEck Vectors Semiconductor ETF (SMH) gave up 4.1%, but is above its 50-day. Nvidia stock is the top holding.
SPDR S&P Metals & Mining ETF (XME) sank 3.1% last week. The Energy Select SPDR ETF (XLE) rose 1.6% and the Health Care Select Sector SPDR Fund (XLV) gained 1.3%, with Intuitive Surgical stock a notable position. The Industrial Select Sector SPDR Fund (XLI) shed 1.1%. The Financial Select SPDR ETF (XLF) added 0.8%.
Nvidia Stock
Nvidia stock was near record highs on Monday, but then fell back. On Friday, shares fell as much as 4.9%, clearly below the 184.47 buy point and the 50-day line, but rebounded for a fraction. Still, NVDA stock gave up 7% to 188.25 for the week. So investors might want to see a little more strength.
Nvidia earnings are due Nov. 19.
Stocks In Buy Areas
Intuitive Surgical popped 4.8% to 560 for the week, breaking out past a 552.50 handle buy point on Friday. The handle formed after the robotic-surgery device leader reported a second straight quarter of accelerating earnings and sales growth on Oct. 21.
MongoDB stock hit a 52-week high of 385.44 on Monday, exiting the buy zone, on strong preliminary figures for the October-ended quarter. But the database software giant fell back, skidding to 339 intraday before reclaiming the 344.85 flat-base buy point by the close. For the week, MDB stock edged up 0.3% to 361.04.
Valero Energy stock climbed 3.6% for the week to 175.62, bouncing from the 10-week line and flirting with a 178.43 flat-base buy point, according to MarketSurge. Shares are actionable from a downward-sloping trendline. Refining stocks are doing well amid solid “crack” spread between the price of crude oil and gasoline.
What To Do Now
The stock market rally is at a critical juncture. The S&P 500 and Nasdaq held their 50-day moving averages on Friday, but still lost significant ground for the week. So did leading stocks, though several rallied strongly off lows Friday.
A strong rebound could signal the end of a pullback. But the indexes decisively breaking their 50-day lines could herald a true market correction. Perhaps the market will appear to bounce but continue its up-and-down action, a terrible environment for active investors.
Don’t try to guess what the market will do. Focus on what it’s doing now.
Have your watchlists up to date. Pay attention to stocks showing relative strength in the current environment. Meanwhile, know your exit strategies.
Stay engaged and remain flexible. This not a time to be locked into a bullish or bearish mindset. Looking at daily, weekly and monthly charts can help keep stock action in perspective.
