Futures fall as rally faces test;  Disney teases Iger's return

Dow Jones futures fell modestly on Monday morning, along with S&P 500 futures and Nasdaq futures, but Disney (DIS) jumped after Bob Iger returned as CEO.


The stock market rally held support levels last week. Now, could the S&P 500 move above its 200-day moving average in the coming days and weeks? An apple (AAPL) can be key.

Apple shares held key levels and rose modestly even as the overall market pulled back. Like the S&P 500, the iPhone tech titan is returning to its 200-day line. A decisive move above this level could offer a buying opportunity. But another rejection could offer another chance to short AAPL stock.

Meanwhile, fellow Dow Jones components Boeing (B.A), JPMorgan Chase (JPM) and GS shares have quietly been in significant numbers over the past few weeks, helping to outpace the Dow in the current market rally. BA stock is technically right around a traditional buy point. Goldman Sachs (GS) is building a deep base, while JPM stock still has work to do.

Disney Brings Back Bob Iger as CEO

In other Dow stock news, Bob Iger is back as CEO of the Walt Disney (DIS), effective immediately. Iger stepped down after a long reign in February 2020 in favor of Bob Chapek, right at the height of the Covid crisis. Capek has been criticized for a number of decisions. Disney’s earnings fell well short of views last quarter, with Capek soon to announce layoffs and other cost cuts.

Iger has agreed to return for two years, Disney said Sunday, “to set strategic direction for renewed growth” and work with the board to find a new successor.

Disney shares jumped nearly 10% in premarket trading. signaling a move to the 50-day line. But DIS shares are near the bottom of the bear market.

Dow Jones futures today

Dow Jones futures fell 0.2 percent to fair value, with DIS shares helping limit losses. S&P 500 futures were down 0.5%. Nasdaq 100 futures lost 0.8%.

The 10-year Treasury yield rose 1 basis point to 3.83%.

Crude oil futures fell sharply. Copper became cheaper by 1%.

Hong Kong’s Hang Seng Index fell 1.9% with Beijing effectively on lockdown as the city reported more Covid deaths. Conflicting signals from Chinese officials have led to confusion over its strict “zero Covid” policy.

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 Analysis

Last week, the Dow Jones Industrial Average rose less than 0.1% last week Exchange Trading. The S&P 500 index fell 0.7% and the Nasdaq composite fell 1.5%. The small-cap Russell 2000 gave up 1.75%.

On Tuesday, November 15, the S&P 500 briefly crossed 4,000, approaching the 200-day moving average. This level is particularly important as the benchmark index was pulled back just 1 point from the 200-day line on August 16, triggering a new leg of the bear market.

A decisive move above the 200-day line, which would also roughly match the trend line of falling highs from the Jan. 4 record high, would be a strong signal that the uptrend is more than a bear market rally.

The S&P 500 clearing the 200-day line would also be a positive backdrop for the top stocks struggling near buy points amid a volatile market.

Meanwhile, the Russell 2000 fell back below its 200-day line last week, but is likely to retrace that level ahead of the S&P 500. The Dow Jones, supported by shares of Boeing, Goldman and JPM, is comfortably above the 200-day. But a clear of last week’s peak would send the Dow back to 34,000 and just below its August peak.

The Nasdaq, worried about aggressive growth, is 8.3% below its 200-day line. A break above last week’s highs would be a good first step. Also positive: The 21-day moving average just broke above the 50-day line on Friday.

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Thanksgiving week isn’t necessarily a great time for a big market move. Markets will be closed on Thanksgiving Day with a half-day session on Friday. Volume is likely to be low throughout the week. Next week ends with a bang. On Dec. 1, investors will receive PCE inflation data for October, along with the ISM manufacturing index for November. The November jobs report is expected on December 2. This news could have a big impact on Fed rate hike expectations, bond yields and stock prices.

So it wouldn’t be a surprise to see the major indexes trade in a range over the next week or so. There’s nothing wrong with a little consolidation for the major indexes and leading stocks.

Apple Stock

Apple shares rose 1.1% last week to 151.29, after jumping 8.2% the previous week. The stock held its 50-day moving average, with the 21-day line set to surpass the 50-day. AAPL shares are only modestly below the 200-day line. The Dow giant flirted with its 200 day on Oct. 28 after earnings. But it turned out to be a great opportunity to short, with shares falling for several days to their worst close since mid-June.

A decisive move above the 200-day line, perhaps clearing the October 28 high of 157.50, would suggest an early entry into a lower base starting on August 17. But if Apple stock turns down from that zone, it could provide another shorting opportunity.

Apple’s success or failure at the 200-day line could be key to the S&P 500’s own performance, and vice versa.

Boeing Stock

BA shares fell 2% to 173.89, after rising 47% in five weeks. While the aerospace giant Dow Jones reversed lower earnings on Oct. 26, the stock bounced back, especially on upward cash flow guidance a few days later.

Technically, Boeing shares are just below the 173.95 cup-base point of purchase. But shares are 9.5% above the 200-day line and 19.5% above the 50-day. A break around current levels could create a safer buying opportunity.

Boeing is expected to turn a profit in 2023, ending four years of losses.

Goldman Stock

GS shares fell 1.55% to 379.20 last week. On the daily chart, shares are expanding from 358.72 base cup a buy point within a much larger consolidation. On a weekly chart, shares of Goldman have a 389.68 full-year buy point cup-with-handle base, acc MarketSmith analysis. But after a 28% gain during a four-week winning streak, that’s an awfully small handle. A longer, deeper handle would be helpful and let the 50-day line close the gap.

The line of relative strength is at a four-year high, reflecting the outperformance of Goldman stock relative to the S&P 500. The RS line is the blue line in the charts provided.

JPM Stock

JPMorgan shares fell 1.1% to 133.84 last week. That’s after a 29.5% advance in six weeks. The stock is above its 50-day and 200-day lines, but it has work to do. JPM stock could build the right side of a long, deep consolidation, or it could create a bottom base.

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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