S&P 500 Hits Pause at Key Level;  Musk buying Manchester United?

Dow Jones futures were flat overnight, along with S&P 500 futures and Nasdaq futures. Tesla CEO Elon Musk tweeted on Tuesday night, perhaps jokingly, that he would buy Manchester United Football Club.




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The stock market rally had a mixed day Tuesday, with major indexes retreating from afternoon highs as the S&P 500 edged up one point from its 200-day moving average.

Walmart (WMT) and Home Depot (HD) gains lifted the Dow and many retailers, with Costco Wholesale (PRICE), AutoNation (AN) and Penske Automotive (PAG) clearing purchase points.

Antero Resources (AN) and EQT Corp. (EQT) surpassed buy points as natural gas prices jumped.

Tesla (TSLA) briefly cleared an aggressive entry Tuesday morning, but TSLA shares turned slightly lower on the Nasdaq.

BBBY Stock is leading a meme craze

Meanwhile, Bed Bath & Beyond (BBBY) continues to skyrocket amid revived interest in this stock of memes. Shares of BBBY jumped 29% to 20.65 on record volume, although that was after jumping to 28.60 intraday. Bed Bath & Beyond, which in the real world is a loss-making home goods retailer with rapidly declining sales, is up 355% from its July 27 low of 4.54.

BBBY shares rose 9% overnight.

Ryan Cohen, Chairman of the Original Meme Fund GameStop (GME), revealed on Tuesday that it still owns its Bed Bath & Beyond stock and solid call options on BBBY stock, betting on prices in the 60-80 range.

Shares of GME jumped 6.3% on Tuesday.

Key Earnings Wednesday

early wednesday Target (TGT), Lowe (LOW) and TJX Cos. (TJX) continue with retail profits. Chip manufacturer Analog devices (ADI) and ocean container carrier Zim Integrated Shipping (WINTER) also report.

Shares of Target, Lowe’s and TJX advanced Tuesday with other retailers, but their charts need work. ADI shares are moving up on the right side of the base. ZIM shares are finding support at key moving averages.

The Commerce Department releases July retail sales data at 8:30 a.m. ET. At 1:00 PM ET, the Federal Reserve will release minutes from its late July Fed meeting.

To Costco’s stock were added IBD ranking and SwingTrader.

The video embedded in this article discusses market action and analyzes shares of AR, Costco and Insulate (PODD).

Dow Jones futures today

Dow Jones futures were flat at fair value. S&P 500 futures were lower. Nasdaq 100 futures lost a bit.

Remember this night action in Dow futures and elsewhere does not necessarily become an actual trade in the next regular Stock Exchange session.


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Stock market rally on Tuesday

The stock market rally was mixed for most of the morning and turned broadly higher in the afternoon before petering out again.

Dow Jones giants Walmart and Home Depot beat second-quarter outlooks early Tuesday. In a huge relief to the markets, Walmart did not cut guidance for the rest of the year.

The Dow Jones Industrial Average rose 0.7% on Tuesday Exchange Trading, with WMT shares up 5.1% and Home Depot up 4.1%. The S&P 500 rose 0.2%. The Nasdaq composite was down 0.2%. The small-cap Russell 2000 closed just below break-even.

U.S. crude oil prices reversed lower, sinking 3.2 percent to $86.53 a barrel, the lowest close since late January. U.S. natural gas futures jumped 6.9 percent to their highest close in 14 years. Energy prices continued to rise in Europe, driving higher demand for LNG exports.

The yield on the 10-year Treasury note rose 3 basis points to 2.82%.

ETFs

Avg the best ETFsInnovator IBD 50 ETF (FFTY) fell 1.3%, while the Innovator IBD Breakout Opportunities ETF (BOOTH) rose by 0.4%. iShares Expanded Tech-Software Sector ETF (IGV) fell by 0.6%. VanEck Vectors Semiconductor ETF (SMH) declined by 1.1%.

SPDR S&P Metals & Mining ETF (XME) rose 0.9%, and the Global X US Infrastructure Development ETF (PAVING) advanced by 0.6%. US Global Jets ETF (STREAMS) climbed 0.9. SPDR S&P Homebuilders ETF (XHB) rose 1%. Energy Select SPDR ETF (XLE) fell 0.2%, and the Financial Select SPDR ETF (XLF) grew by 0.7%. Select Healthcare Sector SPDR Fund (XLV) submerged 0.3%.

Reflecting the more speculative stocks of history, the ARK Innovation ETF (ARKK) fell 2.8%, and the ARK Genomics ETF (ARKG) 3.9%. Tesla stock is still a major holding in Ark Invest’s ETF.


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Tesla stock

Shares of TSLA fell 0.9% to 919.69 on Tuesday. During the day, the stock reached 944, beating an aggressive entry of 940.92 from a too-low position. Tesla shares soon turned lower on the Nasdaq and appreciated the gains, but held support at the 200-day line.

Musk making his own LOL?

On Tuesday night, Tesla CEO Elon Musk tweeted that “I’m buying Manchester United, welcome.” The world famous Manchester United (MANU) football team is publicly traded on the NYSE. Musk is probably joking, but you never know with the world’s richest troll.

If it’s a joke, it could upset the SEC.

The tweet came just after the end of extended trading, so MANU shares were not affected.

Manchester U’s tweet comes as Musk tries to walk away from a buyout deal Twitter (TWTR) for $44 billion, or $54.20 per share.


Tesla’s biggest competitor is now its partner


Stocks in Buy Zones

Costco shares rose 1.3% to 553.02, clearing 552.81 cup-with-handle point of purchase. COST shares rose on strong Walmart earnings and reaffirmed second-half guidance. But earnings from Target on Wednesday and a smaller rival BJ’s Wholesale (BJ) on Thursday can change the value of COST.

Shares of AutoNation jumped 7.3% to 132.49, breaking through resistance of the past few months on above-average volume. During the day, the shares surpassed the official value point of purchase of 133.58 from a nine-month consolidation. The line of relative strength hit a new high, reflecting AutoNation’s outperformance over the S&P 500. AN stock looks right on the edge to be bought from the more active 125-126 zone and especially moving averages.

Shares of Penske Automotive jumped 5.6% to 124.16, surpassing a cup-handled buy point of 121.55. Volume was below average for PAG stock, but better than tepid trading on the handle.

Shares of EQT jumped 4.3% to close at 47.19, clearing a cup-handled buy point of 46.81, according to MarketSmith analysis. Shares rose after hours.

Shares of Antero Resources rose 4.2% to 40.55, but closed in the lower half of Tuesday’s range. AR shares hit 42.16 intraday, briefly surpassing a 41.05 buy point from a handle that’s just a little too low to hold. Shares of AR are 10.6% above their 50-day line.

Market Rally Analysis

The stock market rally shrugged off some mixed early weakness to close higher. The Dow Jones, which just broke its 200-day line on Monday, led the way with a fifth straight gain. The Russell 2000, which broke above that long-term average on Friday, tested and held it on Tuesday.

The S&P 500 nearly hit the 200-day line before falling back. But it wasn’t an outright rejection, with the benchmark index closing slightly higher, just below that key level.

The Nasdaq has some distance to go to reach the 200-day mark.

Growth stocks may need to rest after a breakout, rally from the right side of deep bases, or a race from the bottom of long downtrends.

There may also be some rotation in sectors of the ‘real economy’ such as energy and commodities, retail and even transport. A rise in government bond yields on Tuesday likely didn’t help growth, although rates retreated from intraday highs.

But despite reasons for retreat, growth reluctantly gave up. The Nasdaq, which was down more than 1% in the morning, rebounded to a modest positive before falling to finish slightly in the red.

ARKK and speculative growth names retreated somewhat.

Meanwhile, the renewed surge in BBBY shares, and to some extent GME shares, shows that the speculative meme mania is back on the boil.


Time the Market with IBD’s ETF Market Strategy


What should we do now

The stock market rally is hovering around a key area of ​​resistance, with some pivoting, at least in the short term, to natural gas, retail and other names in the real economy as growth eases.

Investors should continue to be cautious about adding exposure. If you add, say, EQT or Costco shares, that’s fine, but don’t pack your portfolio with natgas and retailers.

Perhaps this week’s winners will continue to participate and lead for a while. Or the Nasdaq could quickly take control again. Or the market rally could see a noticeable pullback to the 21-day line.

Create your watchlists and make sure you have a diverse list of quality names.

Read it The big picture every day to stay in sync with market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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