Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally resumed on Tuesday, with the S&P 500 retracing the 4,000 level.
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Deere (DE) reported earnings early Wednesday, with DE stock in a buy zone. Deere’s earnings and guidance could be important for a variety of agricultural stocks, including CF Industries (CF) and Archer-Daniels-Midland (ADM), as well as machine manufacturers such as Caterpillar (CAT).
Energy stocks continue to perform well. Sunny leader Enphase Energy (ENPH), coal producer Peabody Energy (BTUs), refiner CVR energy (CVI), natural gas producer EQT Corp. (EQT) and LNG stocks Increase energy (EE) are all close buy points.
EE shares bounced back on Wednesday, with Enphase back in buy territory. BTU stock, CVR Energy and EQT are applicable.
ENPH shares are included IBD ranking. EQT shares included SwingTrader. Deere’s stock is at IBD 50. Peabody Energy is on Tuesday IBD Stock of the Day.
Dow Jones futures today
Dow Jones futures rose 0.1 percent to fair value, along with S&P 500 futures. Nasdaq 100 futures were unchanged.
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 rallies
The stock market rally got off to a mixed start on Tuesday, but picked up the flow for broad-based gains, closing near session highs.
The Dow Jones Industrial Average rose 1.2% on Tuesday Exchange Trading. The S&P 500 and Nasdaq composite jumped nearly 1.4%. The small-cap Russell 2000 jumped 1.1%.
The 10-year Treasury yield fell 7 basis points to 3.76%. But the yield on two-year Treasuries, more closely tied to Fed policy, was roughly flat at 4.53%.
The dollar, after rallying for the previous three sessions, fell back on Wednesday. The greenback has fallen significantly since the end of September, especially since the beginning of November.
U.S. crude oil prices rose 1.1% to $80.95 a barrel, extending a recovery from Monday’s brief dip. Gasoline futures jumped 4.3%, good news for refiners. Natural gas futures rose after falling more than 2% on the day.
ETFs
Avg the best ETFsInnovator IBD 50 ETF (FFTY) jumped 3.4%, helped by a number of energy and metals stocks. iShares Expanded Tech-Software Sector ETF (IGV) grew by 1.8%. VanEck Vectors Semiconductor ETF (SMH) jumped 2.9%.
SPDR S&P Metals & Mining ETF (XME) gained 3.2%, and the Global X US Infrastructure Development ETF (PAVING) reached 1.3%. SPDR S&P Homebuilders ETF (XHB) rebounded by 1.9%. Energy Select SPDR ETF (XLE) rose 3.1%. Select Healthcare Sector SPDR Fund (XLV) rose 0.9% to a seven-month high.
Reflecting stocks with more speculative stories, ARK Innovation (ARKK) gained 0.3% and ARK Genomics (ARKG) fell 0.4%
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Energy stocks near purchase points
Enphase shares rose 4% to 320.44, closing above 316.97 cup-with-handle buy a point for the first time. However, the last three times that ENPH stock rose to these areas, it reversed. Enphase shares tend to have large daily swings. So investors may be watching to see if ENPH stock will return to its bullish 21-day moving average.
Some other LNG stocks are showing strength, with Flex LNG (FLNG) outbreak and Cheniere Energy (LNG), retracing its 50-day line.
BTU shares jumped 6.7% to 29.62, just below a 30.15 buy point in a seven-month consolidation. Tuesday’s move broke the handle’s trendline, suggesting an early entry. However, BTU stock is 9.3% above the 21-day line and 17% above the 50-day. The hold was formed following strong earnings by Peabody Energy.
Shares of CVR Energy rose 4.85% to 40.85, again above an old buy point of 39.81 that could still be seen as valid. In addition, CVI stock has a three weeks straight model with entry 42.31. A break above 41.31 could offer an early entry into this tight pattern.
Shares of EQT jumped nearly 6% to 43.79, breaking back above the 50-day line after recovering from the 200-day on Monday. Stocks are breaking a downtrend. The official buy point is 52.07.
EE shares jumped 9.6% to 30, clearing a cup-handled buy point of 28.49 on above-average volume, according to MarketSmith analysis. That move to a record close wiped out much of the trading done since Excelerate Energy’s April IPO. EE shares passed early entries on Friday and Monday, although trading was below normal on those days. Excelerate is now slightly extended from the buy zone and well extended from the 21-day line.
Market Rally Analysis
The stock market rally continues to show constructive action, trading in a tight range after a modest pullback and support last week. On Tuesday, the major indexes recovered from Monday’s losses.
The S&P 500 bounced off its 10-day line, right at the 4,000 level, as it moves toward its 200-day line. While not above the intraday high of Nov. 15, it was the index’s best close in more than two months.
The 50-day line is just is starting to move higher on the S&P 500.
The Russell 2000 is getting very close to its 200 days. The S&P MidCap 400, which held its 200-day line last week, posted further gains.
The leading Dow Jones surpassed the 34,000 level for the first time in three months, just below the peak of August 16. The trailing Nasdaq found support at its 21-day line, just above its 50-day, but did not recover all of Monday’s losses.
All of these indices are running on the upside, with the Dow sneaking in on top. Most stocks follow the action of the major indexes, so many stocks are formed near buy points. A slightly longer pause, perhaps until key economic reports late next week, will allow the moving averages to begin to catch up.
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What should we do now
Until the S&P 500 moves decisively above its 200-day line, investors may not want to add much exposure right now. With Thanksgiving trading muted and Fed-critical economic data next week, the market’s rally could be range-bound in the short term.
This can help stocks from different sectors set up handles and have moving averages. Investors should build their watch lists. It’s definitely time to look beyond traditional tech growth stocks, which are mostly lagging right now.
Given that many leaders are extended by moving averages, such as Excelerate Energy or BTU stock, it’s even more important to look for early entries and act quickly.
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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