Dow Jones futures were up slightly overnight, along with S&P 500 futures and Nasdaq futures heading into the Thanksgiving holiday.
The stock market rally was positive for the second session in a row. Fed officials believe slower rate hikes are coming “soon,” according to minutes from the Fed’s November meeting released Wednesday afternoon.
Investors should be cautious about adding exposure given key technical resistance and notable economic reports ahead.
Dow Jones futures today
Dow Jones futures were up 0.1% at fair value. S&P 500 futures advanced 0.15 percent and Nasdaq 100 futures rose 0.2 percent.
The 10-year Treasury yield fell 2 basis points to 3.69%.
US stock markets will be closed on Thursday for the Thanksgiving holiday. On Friday, US markets will close early at 1:00 PM ET. But other exchanges around the world will operate as normal on Thursday and Friday.
Stock market rallies
The stock market rally had some wobbles on Wednesday but extended gains led by technology companies.
Initial jobless claims rose to a three-month high, while ongoing claims hit an eight-month high. S&P Global purchasing managers’ indexes for U.S. manufacturing and services signaled contraction.
The minutes from the Fed reinforced expectations for a 50 basis point rate hike at the December 14 meeting. Markets still favor another half-point move in February, but there’s a decent chance of a quarter-point increase.
The Dow Jones Industrial Average rose 0.3% on Wednesday Exchange Trading. The S&P 500 rose 0.6%, led by TSLA shares. The Nasdaq composite jumped 1%. The small-cap Russell 2000 rose 0.1%.
U.S. crude oil prices fell 3.7 percent to $77.94 a barrel. Natural gas futures jumped 7.2%.
The yield on the 10-year Treasury note sank 5 basis points to 3.71%. The yield on two-year Treasuries, more closely tied to the prospect of a Fed rate hike, fell below 4.5%.
The US dollar fell significantly for a second straight session, returning near recent lows.
SPDR S&P Metals & Mining ETF (XME) rose by 0.3%. US Global Jets ETF (STREAMS) rose 0.1%. SPDR S&P Homebuilders ETF (XHB) rose 0.5%. Energy Select SPDR ETF (XLE) fell by 1.1%. Select Healthcare Sector SPDR Fund (XLV) grew by 0.4%. Shares of the Dow Jones giant UNH are the highest performing stocks in the XLV.
Tesla shares jumped 7.8% to 183.20 on Wednesday, rebounding from bear market lows on Tuesday after Citigroup upgraded the EV giant from sell to hold. TSLA shares are still down 19.5% so far this month and roughly halve in 2022.
Stocks to watch
Shares of Dexcom advanced 1.7% to 112.92, finding support at its 21-day moving average. DXCM shares have been on hiatus this month after missing earnings on Oct. 28. Dexcom shares are likely long with a 123.46 buy point from a seven-month consolidation. Investors could buy DXCM shares from an early entry outside the 21-day line, perhaps using Tuesday’s high of 113.88 as a specific buy point.
Medpace shares fell 1.3% to 218.81 on Wednesday. Shares have been consolidating near record highs since a sharp 38% surge on Oct. 25 following earnings. Since then, MEDP stock has forged a messy handle on a deep, full-year cup. While the stock had some big intraday swings, MEDP shares are currently on track to forge a three-week tight pattern by Friday’s close. Investors may use the November 15 close of 226.57 as an early entry, above most of the recent trade.
Shares of NBIX sank 1.5% to 118.97. Shares are consolidating near multi-year highs extended from the breakout in October. Despite falling to 50 day line last week Neurocrine stock had a three week tight pattern this is about to continue for a fourth week. Technically this has 126.09 point of purchasealthough investors may want to wait for some quieter action.
Shares of Shockwave jumped 4.7% to 264.06 on Wednesday, back above its 21-day line but hitting resistance at the 50-day line. After a failed breakout in late October and a sharp selloff that continued through earnings, SWAV shares have rebounded over the past week. The new base will take longer, but aggressive investors could use a strong move above the 50-day as an early entry.
Shares of UNH rose 1.3% to 529.71, bouncing above its 50-day and 21-day lines after briefly breaking below its 200-day line last week. UnitedHealth stock used to be IBD long-term leader and still shares many characteristics. Investors could use a bounce off the 50-day line as an early entry or entry into a long-term leader. UNH stock should make a new base after breaking out of a cup base with handle quickly failed last month.
Market Rally Analysis
A stock market rally added to Tuesday’s gains. The S&P 500 just topped its intraday high of Nov. 15 and closed within 1% of its 200-day line.
The Russell 2000 just hit its 200-day line.
The Nasdaq added to Tuesday’s bounce from its 21-day moving average, although it is still below its short-term peak from Nov. 15 and well below its 200-day.
The Dow Jones is up 20 points from its August 16 intraday high.
The S&P 500 moving decisively above its 200-day line — which roughly coincides with an annual trend line of falling highs — is a huge test of the market’s rally.
A flurry of economic data can affect expectations for Fed interest rates and thus the stock market. On Wednesday, November 30, the October JOLTS report will show job vacancies, with Fed chief Jerome Powell speaking later in the day. PCE, the Fed’s favorite gauge of inflation, will be released on Thursday, along with jobless claims and the ISM manufacturing index. The November jobs report is due on Friday, November 2.
Ideally, the market will move sideways for a few days, letting at least the 21-day line catch up, heading into these economic reports.
What should we do now
The market’s rally has seen some good gains this week, with more stocks flashing buy signals over the past few days. As a result, investors could add a bit more exposure.
But they may want to be cautious about making significant new purchases as the S&P 500 moves below its 200-day line and the Fed-critical economy next week.
Also consider taking some partial profits from stocks that are rising quickly. Stocks are making short-lived gains amid a volatile uptrend and sector rotation.
Still, investors should work hard on their investment shopping lists, looking for setups and active names across sectors.
Read it The big picture every day to stay in sync with market direction and leading stocks and sectors.
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