- China’s declining population and debt burden will limit its growth rate to 2-3%: Breakout’s Sharma CNBC Television
- China’s deflation risk: Spillover effects will be ‘greater in Europe,’ strategist says Yahoo Finance
- China Weakness Suggests Reduced Trade Dependency, Nagel Says Bloomberg
- We need to prepare for a negative shock from China, says IIF’s Tim Adams on weak China economic data CNBC Television
- China State Planner: Persistent Economic Recovery Faces Risks and Challenges Including Insufficient Demand, Sluggish Momentum and Weak Confidence Forex Factory
- View Full Coverage on Google News
Tag Archives: Breakouts
Fantasy Basketball sleepers, breakouts and busts NBA 2022-23
To assemble an awesome fantasy basketball roster, you’ll need to make the most of your draft.
So which players will exceed their average draft position this season?. Who will elevate their game to another level? And what players pose the biggest risk of taking a step backwards?
Our fantasy basketball experts — Andre’ Snellings, Eric Moody, Eric Karabell and Jim McCormick — offer their top sleepers, breakouts and busts for the 2022-23 season.
Sleepers
Sleeper: A player who will far surpass his average draft position (ADP) in standard ESPN leagues.
Andre’ Snellings — Alperen Sengun, Houston Rockets: Sengun started jumping onto the fantasy radar after he flashed in the Las Vegas Summer League right after he got picked. He’s a do-everything center on offense, and his per-36 minute numbers from his rookie season attest to that: 16.7 PP36, 9.5 RP36, 4.5 AP36, 1.6 BP36, 1.4 SP36 and 0.7 3P36. The biggest issue, on the fantasy front, was that as a rookie he only played 20.7 MPG behind Christian Wood. Well, Wood was traded to the Mavericks in the offseason, clearing the way for Sengun to start getting starter minutes. His game should be better as a sophomore, and with the added minutes he has the potential to put up strong numbers this season.
Eric Moody — Jalen Suggs, Orlando Magic: Suggs had a rookie season for the Orlando Magic full of ups and downs including injuries and roster inconsistencies. A rookie trying to get acclimated to the NBA, he averaged 11.8 PPG, 3.6 RPG, and 4.4 APG, but his field goal percentage of 36.1% needs improvement. Suggs is not the first highly-drafted NBA player to struggle in his early career, and he won’t be the last. Suggs is a better role player than a star, and with the Magic selecting Paolo Banchero No. 1 overall, he will have the opportunity to truly shine doing just that. Suggs will see high usage along with Franz Wagner and continue to have a significant role for Orlando.
Eric Karabell — Tre Jones, San Antonio Spurs: Now entering his third season from Duke, Jones didn’t see many minutes for Gregg Popovich the first two years. Now star Dejounte Murray is gone to the Hawks, though, and Jones should start and see major minutes. Jones started 11 times last season and averaged 13.5 PPG and 7.5 APG, and he shot well from the field and the line. Jones can’t do what Murray does, but he’s worth a top-100 pick for the minutes and potential in assists alone.
Jim McCormick — Devin Vassell, San Antonio Spurs: Only Jokic, James Harden, and Luka Doncic touched the ball than Dejounte Murray’s 87.5 times per game for the Spurs last season. Murray paced all players under 6’7 in rebounding chances per game while also finishing top 10 passes and drives per game. Found deep into drafts, Vassell is a young two-way wing poised to capitalize on the ocean of opportunities available in the wake of Murray’s departure. In just over 400 minutes with Murray and Derrick White off the floor last season, Vassell, at age 21, posted 17.1 points, 2.8 3-pointers, 5.9 boards, 3.7 assists, 2.4 combined blocks and steals (per 36 minutes. Even amid the Spurs’ pursuit of lottery odds, there’s a lot to like about Vassell’s trajectory.
Breakouts
Breakout: A player who will leap into or close to the upper echelon of players at his position for the first time because of a dramatic increase in production compared to his previous seasons.
Andre’ Snellings — Jalen Brunson, New York Knicks: Brunson showed that he could produce next season while playing next to usage vacuum Luka Doncic, but it was when Doncic was out that Brunson really showed his potential. During a 10-game Doncic absence in December, Brunson averaged 21.0 PPG (51.3 FG%, 37.5 3P%, 77.5 FT%), 7.4 APG, 3.5 RPG and 1.5 3PG in 34.7 MPG. But, the more tantalizing stretch came when Doncic missed the first three games of the playoffs. Brunson responded by averaging 32.0 PPG (50.7 FG%, 41.2 3P%, 85.0 FT%), 5.3 APG, 5.3 RPG and 2.3 3PG in 39.4 MPG during that span. This offseason, Brunson signed to be the new point guard for the Knicks, which means that he now gets the high-usage keys to a franchise. He has the realizable upside to jump into the fantasy elite this season.
Eric Moody — Josh Giddey, Oklahoma City Thunder: I’m a huge fan of Giddey, as those who read my columns last year will know. The Rookie of the Month Award was bestowed upon him four times last year due to his stellar performance. There was no other player in the 2021 class who earned the award more than twice. Giddey averaged 12.5 PPG, 7.8 RPG, 6.4 APG, and 1.0 SPG with a 22.2% usage rate. In all of those statistical areas, he is well positioned to see an increase. The statistical leap Giddey may make in his second season could be similar to that of LaMelo Ball. Other than Shai Gilgeous-Alexander and Giddey, the Thunder don’t have many playmakers.
Eric Karabell — Alperen Sengun, Houston Rockets: The Rockets couldn’t wait to part with Wood and it opens up major minutes for Sengun, who averaged 12.1 PPG, 8.2 RPG over 13 starts as a rookie. Those may not be noteworthy statistics for many centers, but Sengun, 20, is also a sneaky strong provider of assists, averaging 3.6 APG in his starts. He can block shots, too. Give Sengun enough minutes and he could easily become a top-50 fantasy option.
Jim McCormick — Franz Wagner, Orlando Magic: Lowkey awesome as a rookie for the Magic, Wagner finished 50th overall on ESPN’s Player Rater as a 20-year-old on a team beset by brutal backcourt injuries and an overall absence of steady point guard play. With Markelle Fultz’s distribution skills and Paolo Banchero’s passing prowess joining the roster, Wagner might finally get some “easy” catch-and-shoot work this season. The Michigan product, meanwhile, was a total boss for Germany at EuroBasket this summer, flashing a series of effective pull-up and step-back 3-pointers from a live dribble. Given what should be a big role as a building block next to Banchero, Wagner becoming a starting fantasy force at both forward spots could be in the works.
Busts
Bust: A player who is expected to be a solid starter in standard ESPN leagues but will fail to live up to those expectations this season.
Andre’ Snellings — Chris Paul, Phoenix Suns: Over the three seasons from 2016-17 through 2018-19, Paul missed an average of 23 games per season due to injury. He was relatively healthy for the next two seasons, both of which were shortened due to COVID, but then he missed 18 games again last season, in his 17th in the NBA. He was still strong when playing during the season, but in the playoffs, immediately after his 37th birthday, he immediately turned in several of the worst games of his career. During the last five games of his playoffs, Paul averaged only 9.4 PPG, 5.8 APG, 3.4 RPG and 3.6 TO/G in 32.3 MPG. His poor performance played a big part in the Suns being upset in the playoffs. This season, the risk of injury and the risk of age-related decline overlap in such a way that Paul has too high of a likelihood to underperform his typical level and/or be absent during a key portions of the season.
Eric Moody — Harrison Barnes, Sacramento Kings: Barnes was superb for the Sacramento Kings last season with 16.4 PPG, 5.6 RPG, 2.4 APG and a usage rate of 18.2%. Fantasy managers will expect him to replicate these numbers. Given the influx of talent the Kings have had this offseason, including Kevin Huerter, Malik Monk, and Keegan Murray, Barnes will find it difficult to do so.
Eric Karabell — Zion Williamson, New Orleans Pelicans: Zion was my pick last season as well, as it was easy to question how soon he would return from foot surgery. He ended up missing the entire season. In addition to major durability concerns, Williamson’s statistics deceive a bit, and may not warrant his lofty ADP. After all, while the unstoppable Williamson can score at will, he’s just a modest rebounder, not a factor on 3-point shooting and he can do major damage to a fantasy team’s free throw percentage. Oh, and did we mention he’s far from durable?
Jim McCormick — Clint Capela, Atlanta Hawks: Onyeka Okongwu is the center of the future for the Hawks. The third-year center claims some awesome advanced metrics that often align with team success, and, both his contract and age align much better with the team’s superstar backcourt. With respect to Capela’s fantasy value, last season’s 11.1 points and 11.9 pulls to go with 1.3 blocks in 27.6 minutes per night represents the likely ceiling for this season, one where competition from Okongwu for opportunities will increase. Which is to say, he could be just fine, but there’s really no shot at being special. One of the only viable paths to resetting Atlanta’s position as a tax team (ahead of a hug new commitment to Murray) is moving Capela, adding more uncertainty to an old-school center with a relatively pricey draft position.
Dow Jones Today, Stocks Slump As July Hiring Data Disappoints; FDA Timeline Lifts BioNTech; Paycom, DaVita Eye Breakouts
Stocks opened lower, then turned mixed Wednesday after disappointing July hiring data and as concerns rose regarding coronavirus infections and impact. Vaccine maker BioNTech rallied on FDA news. Advanced Micro Devices extended its breakout rally. Earnings news sent Paycom Software and DaVita past buy points. And on the Dow Jones today, Home Depot and UnitedHealth traded just below buy points.
X
The Dow industrials sloughed off 190 points, down 0.5%, as oil prices and bond yields dived after a disappointing July hiring report from ADP. The S&P 500 shed 0.3%. The Nasdaq 100 shook off thin early loss and climbed almost 0.1%, although earnings news sent Match Group (MTCH), Kraft Heinz (KHC) and Amgen (AMGN) to the bottom of the Nasdaq 100.
IBD 50 stock Advanced Micro Devices (AMD) surged 4.7%, to the head of the Nasdaq 100, as it aimed to extend its five-day rally. The chipmaker has gained more than 20% in fewer than two weeks, triggering the eight-week hold rule.
Paycom Software (PAYC) vaulted 8.3%, leading the S&P 500. The human resources software developer reported better-than-expected sales and earnings for the second quarter, and raised its guidance. The early move sent shares past a 404.87 double-bottom base buy point.
Delta variant concerns and news reports of a possible full approval from the Food and Drug Administration sent BioNTech (BNTX) up 3.6% to lead the IBD Leaderboard list. BioNTech is in the third week of an eight-week hold rule. IBD 50 stock Moderna (MRNA) opened to a 0.9% gain Wednesday.
In some of the morning’s more dramatic moves, four-day-old Robinhood Markets (HOOD) scrambled 54% higher. The stock finished trade on Tuesday more than 41% above Thursday’s initial offering price. Biotech BeyondSpring (BYSI) spiked 153%, after reporting positive Phase 3 trial results of a lung cancer treatment.
Dow Jones Today: Boeing Test Flight Delayed
Amgen slumped 2.9%, to the bottom of the Dow Jones today, after reporting second-quarter sales and earnings that beat views. But management trimmed its full-year earnings guidance.
Boeing (BA) dropped 1.1% after further delays to a test flight of the company’s autonomous, reusable space capsule. Boeing stock is attempting to add a third week to its advance off a mid-July low.
UnitedHealth Group (UNH) added 0.2% in early trade. A 1.5% jump on Tuesday lifted shares to within 2% of a 422.63 buy point in a 12-week cup-with-handle base.
Home Depot (HD) — a stock that has benefited during periods of tighter Covid restrictions — edged a fraction lower. Home Depot stock rose 1.4% on Tuesday, ending less than 1% below a 333.55 entry, also in a 12-week cup with handle.
Econ Data: Hiring Fades In July
ADP launched the ramp-up to Friday’s July payrolls report from the Labor Department with its July National Employment Report. The report showed U.S. nonfarm private employers added 330,000 workers in July. That was less than half of June’s 692,000-job increase, and was less than half expectations for an increase of 700,000.
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Oil prices and bond yields turned lower after the ADP report. West Texas Intermediate futures tumbled more than 3%, moving below $69 a barrel. The 10-year yield held dipped four basis points to 1.13%, after settling just below 1.18% on Tuesday.
IHS Markit releases its final composite purchasing managers index for July at 9:45 a.m. ET. The Institute for Supply Management reports its July services PMI at 10 a.m. And weekly petroleum inventories data are set for release from the Energy Information Administration at 10:30 a.m.
Earnings News: Donnelly, DaVita Head For Buy Points
In early earnings news, eXp World Holdings (EXPI) rocketed 28% higher. United Therapeutics (UTHR) and Landmark Infrastructure Partners (LMRK) each gained more than 11%.
Dialysis treatment leader DaVita (DVA) jumped 7.8%, scoring an early breakout past a 124.98 buy point in a double-bottom base. Investors could use a breakaway gap buying strategy, which would place an entry at 129.10.
Video game developer Activision Blizzard (ATVI) gained 2.7%. The company reported second-quarter earnings late Tuesday. Activision has been wracked by an employee walk-off and executive shake-ups tied to a lawsuit alleging widespread sexual harassment and discrimination within the company.
On the downside, in addition to Amgen on the Dow Jones today, General Motors (GM) tumbled 7.7%, despite beating its second-quarter targets, as annual per-share earnings guidance stopped short of expectations.
China Ramps Up Covid Restrictions
China’s markets took a healthy bounce on Wednesday, with the Shanghai Composite and Hong Kong’s Hang Seng index each jumping 0.9%. That put the Shanghai Composite up 2.4% for the week as it rebounds from last week’s 4.3% dive. The Hang Seng ended Wednesday up 1.8%, vs. the prior week’s 5% fall.
The positive market action came even as China on Wednesday imposed “massive travel restrictions,” with a large number of airports and rail travel canceled, according to state-run media agency Xinhua.
Stock Market ETF Strategy And How To Invest In The Current Uptrend
Widespread Covid testing regimens have also been implemented, and Beijing imposed strict entry and exit controls on Sunday. CNBC reported early Wednesday that China’s National Health Commission said it confirmed 96 Covid cases on Wednesday — the third straight day it reported 90 cases and above. Of the newly confirmed cases, 71 were locally transmitted, said the health commission.
The question of how far China will have to go to lock down the new spread of the Delta variant coronavirus comes as a broadening regulatory crackdown left China’s markets reeling. Stocks began selling off aggressively on July 23, as authorities rolled out a series of reforms that reframed regulations for education companies, food delivery operations and companies listing on exchanges outside of China.
Tech and internet stocks fell hard Tuesday, on fears that online gaming would be the next sector on which the government would focus its broadening crackdown.
Tracking Global Stock Markets
Among China gauges in the U.S. early Wednesday, the iShares MSCI China ETF (MCHI) rose 1.8%, and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) gained 0.9. Technology tracker KraneShares CSI China Internet ETF (KWEB) rebounded 2.9% in early trade. The ETF fell 4% on Tuesday.
In Europe on Wednesday, stocks defended narrowed gains in afternoon trade. The CAC-40 in Paris pared back to a 0.3% advance. Frankfurt’s DAX swung 0.5% higher. London’s FTSE 100 mustered a 0.1% gain. The SPDR Portfolio Europe ETF (SPEU) added 0.5%.
IBD 50 Earnings: Roku, HubSpot, Innovative
At least a dozen IBD 50-listed companies have reported or will report earnings this week. Of the companies due to report, Roku (ROKU), HubSpot (HUBS) and Innovative Industrial Properties (IIPR) are among those near buy points.
Roku gained 0.2% in early trade, angling to avoid a fourth straight decline. The stock had dropped below its 21-day exponential moving average on Monday, finishing Tuesday about 10% below a 463.09 buy point in a cup-with-handle base. Roku reports after Wednesday’s close.
HubSpot shares were down 0.2% Wednesday, testing support at their 21-day average. HubSpot stock remains in a buy range above a 574.93 buy point in a cup base. Its pullback to the 10-week line didn’t trigger the automatic sell rule. So the breakout remains in play. The buy zone extends to 603.68. The company reports after today’s close.
Nasdaq, S&P 500, Dow Jones Today
The stock market gave the U.S. economy a vote of confidence Tuesday, with the major indexes all rebounding from short-term support. The gains came even as concerns and restrictions increased, due to what appears to be the accelerating spread of the coronavirus Delta variant in the U.S.
As a result, the S&P 500 and Nasdaq Composite closed narrowly off record highs. The Dow Jones today also opens near its record high, and back above the 35,000 level, which has acted as a cap on its progress since May.
For more detailed analysis of the current stock market and its status, study the Big Picture.
August is generally treated as a sleepy month for the market, a month in which traders take vacations before the kids head back to school. But for the past decade, August performances have been erratic. The Dow and S&P 500 have posted moves up and down of more than 1.5% in seven of the past 10 years. The Nasdaq has seen such moves in eight of the past 10 years.
IBD’s Big Picture cautions that “after rising in eight of the past nine months, a stock market pullback would not come as a surprise. For now, though, there’s no clear sign of such a pullback.” Distribution days are somewhat elevated, particularly on the S&P 500. But Tuesday’s action showed institutional buyers remained engaged. And there has not been any new distribution for the past two weeks.
The stock market’s status remains in “confirmed uptrend.”
Find Alan R. Elliott on Twitter @IBD_Aelliott
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Dow Jones Futures Rise, But So Do Treasury Yields With Final Biden Stimulus Vote On Tap; Where To Look For Breakouts
Dow Jones futures rose modestly early Wednesday, while S&P 500 futures were flat and Nasdaq futures fell slightly, with Treasury yields creeping higher again. The House is set to give final passage to the $1.9 trillion Biden stimulus bill today.
X
The stock market rally attempt had a strong session Tuesday as Treasury yields backed off. The Dow Jones hit a record high before backing off while the S&P 500 index reclaimed key levels. The Nasdaq rebounded strongly but remains well off recent highs.
Likewise, growth names such as Tesla (TSLA), Nio (NIO), Nvidia (NVDA) and Zoom Video Communications (ZM) were big winners Tuesday, but are still in deep downtrends.
New breakouts are coming from real economy names. Specialty chemicals maker Element Solutions (ESI) and auto giant Stellantis (STLA) broke out, while steelmaker Ternium (TX) and auto dealer CarMax (KMX) extended gains within buy zones. Microsoft (MSFT) — less of a high-octane, high-value name than Tesla stock — retook a buy point as well as several key levels.
Meanwhile, General Electric (GE) confirmed it will sell its aircraft leasing business to AerCap (AER). GE will get $24 billion and a 46% stake. GE also is planning to do a 1-for-8 reverse stock split. GE stock edged higher early Wednesday, signaling a fresh 34-month high. AerCap, which jumped Monday on reports of a deal, was flat in premarket trade.
Microsoft and Nvidia stock are on IBD Leaderboard and the IBD 50 list. MSFT stock is on IBD Long-Term Leaders as well. KMX stock was Tuesday’s IBD Stock Of The Day.
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Biden Stimulus Bill Vote
The House is set to give final passage to the $1.9 trillion Biden stimulus bill on Wednesday, voting on the Senate version of the legislation. The Senate passed the Biden stimulus bill, with a few tweaks, on Saturday. After the House vote, the stimulus bill will go to President Joe Biden’s desk for his signature.
The stimulus bill will provide $1,400 checks for many Americans, expanded jobless benefits and aid to schools and state and local governments. It also includes significant spending boosts on anti-poverty programs, ObamaCare and private pension bailouts. It also features a little money for coronavirus vaccinations and testing.
After the huge Biden stimulus bill — coming weeks after a second coronavirus aid package — congressional Democrats are mulling an even-bigger spending package later this year focused on infrastructure. That latter package also will likely include major tax increases.
The looming spending blitz has buoyed interest rates and real economy stocks, with rising Treasury yields weighing on growth names.
Dow Jones Futures Today
Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures edged higher while Nasdaq 100 futures fell 0.2%.
The 10-year Treasury yield was at 1.56%, slightly higher after sliding Tuesday. A 10-year Treasury auction is set for today. A poorly received seven-year auction on Feb. 25 sent the Nasdaq tumbling below its 50-day line and pushing the struggling market rally to “uptrend under pressure.”
At 8:30 a.m. ET Wednesday, the Labor Department will release the February consumer price index. The CPI hasn’t moved Dow Jones futures in quite some time, but Treasury markets have been signaling some concern about future inflation.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 118.26 million. Covid-19 deaths topped 2.62 million.
Coronavirus cases in the U.S. have hit 29.80 million, with deaths above 540,000.
Stock Market Tuesday
The stock market rally attempt had a generally encouraging session Tuesday, though the fade into the close wasn’t great. The 10-year Treasury yield fell 6 basis points to 1.53% after climbing for several days. That was a catalyst for growth stocks.
The Dow Jones Industrial Average edged up 0.1% in Tuesday’s stock market trading, fading badly in the final minutes after briefly hitting another record high. The S&P 500 index popped 1.4%, bouncing above its 50-day and 21-day lines. The Russell 2000 climbed 2.1%, above its 21-day.
The Nasdaq composite surged 3.7%, but is still below its 50-day line.
Tesla stock spiked nearly 20%, its biggest percentage gain in 13 months, fueled by the overall growth rally as well as strong China sales. Nio stock leapt 17%. Nvidia jumped 8% and Zoom stock tacked on 10%. But all four stocks are still well below their 50-day lines and need time to repair their damaged charts. Nvidia stock managed to reclaim its 200-day average, while Zoom was still stuck below that.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) popped 4.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained just over 5%, both closing in on their 50-day lines. The iShares Expanded Tech-Software Sector ETF (IGV) rallied 4.4%, with Microsoft its top holding and ZM stock a notable component. The VanEck Vectors Semiconductor ETF (SMH) jumped 5.9%, with Nvidia a major holding.
Reflecting more-speculative stocks, Ark Innovation ETF soared 7.65% and Ark Genomics ETF bounded 10.4%, after both took heavy losses in recent days. Tesla stock is the No. 1 holding across ARK Investments’ ETFs.
Market’s Latest Stock Breakouts Find Three Key Trends
Stocks In Buy Zones
Element Solutions stock rallied 7.2% to 20.24, running past an 18.50 cup-base buy point in heavy volume, according to MarketSmith analysis. The 5% chase zone for ESI stock runs to 20.48. The relative strength line is at a new high, reflecting its outperformance vs. the S&P 500 index. The specialty chemicals maker — touching on electric vehicles, 5G, AI and smartphones — recently reported a 41% EPS gain for the latest quarter.
Stellantis stock climbed 2.6% to 17.56, clearing a 17.31 cup-base entry. Stellantis is the result of a recent merger between Fiat Chrysler and France’s Peugeot. STLA stock has lagged Ford (F), General Motors (GM) and especially Volkswagen (VWAGY), but earnings are rebounding solidly and its RS line is at a new high.
Ternium stock rose 3.9% to 35.43, above a 34.09 cup-base buy point in heavy volume. TX stock originally broke out on March 2 then fell back a few days later. Shares just closed in buy range on Monday, but fell below the entry Tuesday morning before rebounding.
CarMax stock hit 132 intraday but reversed lower to down 0.3% to 128.82, still slightly above the 128.68 buy point. KMX stock jumped 4.85% to 129.17 on Monday. The RS line is at a high. CarMax earnings have rebounded as the tight new-car supply fuels used-car sales and prices. The used-car giant also has made a big push into digital sales during the pandemic.
Microsoft stock advanced 2.8% to 233.78, back above a 232.96 buy point. The Dow Jones tech giant also reclaimed its 50-day and 21-day moving averages, as well as breaking a short downtrend.
In many ways, the MSFT stock chart in the past few weeks looks a lot like that of the S&P 500 index. Buying Microsoft stock near the 50-day line makes sense as a Long-Term Leader. Investors also could start a stake here, then fill out the position if and when MSFT stock completes and clears a new consolidation starting with the Feb. 16 all-time high of 246.13. The RS line for Microsoft stock has lagged since July and is off its early-February levels, but has held better than many tech names in the past few weeks.
Stock Market Rally Analysis
Analyzing the current stock market rally attempt is difficult because the major indexes are so split. It’s normal to see one index lead to the upside or downside, but usually they all trend in the same direction. But that hasn’t been the pattern in recent weeks.
On Tuesday, the stock market did rally across the board. The Nasdaq led with a powerful rebound, as Tesla stock and many speculative growth names soared following several down days. The S&P 500 index rose strongly while the Dow Jones eked out a slim gain after a solid intraday gain.
But the Nasdaq and many hot stocks like Nvidia are still below their 50-day lines. The best one-day gains in history are all in bear markets, so one big day for growth stocks in a correction doesn’t mean much by itself.
Tuesday marked day three of a stock market rally attempt. Especially for the Nasdaq and growth sectors, a follow-through day to confirm the new rally is key. A follow-through could come any day now. A strong Nasdaq gain from these levels also could push the tech-heavy index to or above its 50-day and 21-day lines.
The Dow Jones, despite its lackluster finish, is trading right at record highs. Several more real economy stocks entered buy zones. To be blunt, if the Dow Jones and cyclical sectors embodied the stock market, IBD wouldn’t have declared a correction last week. With the Dow Jones and related sectors at new highs, it’s easy to argue that this major segment of the market is in an uptrend — and never was in a correction.
The S&P 500 index also looks healthier, regaining key levels. So does the Russell 2000.
IBD Stock Of The Day In Buy Range As Earnings Rebound On These Trends
What To Do Now?
Work on your stock watchlists, focusing on relative strength. Among those, pay close attention to stocks that are setting up near buy points.
Investors could choose to take some small positions in stocks breaking out or flashing other buy signals. Aside from a few names such as Microsoft, that’s generally going to be real economy names. As for growth stocks, wait for a follow-through day. Even then, many stocks such as Nio, Zoom or Tesla could take weeks or longer to forge new buying opportunities.
This is an important day to read The Big Picture to understand the market direction.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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