Dow Jones futures rose slightly late Wednesday, as did S&P 500 futures and Nasdaq futures. As the sharp rise in inflation made investors frightened, the stock market was hit hard for the second day in a row, pushing up U.S. Treasury yields.
Tesla CEO Elon Musk stated that his company will no longer allow people to make car purchases through Bitcoin. Bitcoin plummeted on the grounds that the cryptocurrency consumes a lot of energy.
The Colony Pipeline resumed operations on Wednesday afternoon, as the supply of gasoline across the east coast is dwindling.Chinese e-commerce giant Alibaba (BABA) will announce earnings early on Thursday
Apple stock Tesla (TSLA), Microsoft (MSFT), Amazon.com (AMZN), square (SQ), Flooring and decoration (FND) and Forest Research (LRCX) was tested during Wednesday’s sell-off, weakening or decisively breaking through key support.
After rebounding from Tuesday’s intraday lows, especially in the Nasdaq market, the major stock indexes and small-cap Russell 2000 both broke Tuesday’s lows and closed near their worst levels. Chip stocks were hit hard again, with tech giants, software and high-value growth stocks (including Tesla, apple (AAPL), Microsoft, Amazon, Square and Lam Research. Housing-related stocks such as flooring and decoration fell sharply again. Mining stocks and metal stocks fell, although their trends were generally positive. Initially stagnated, financial stocks also fell.
A positive sign is that according to the Chicago Board Options Exchange (CBOE) Volatility Index, put call options ratio and long to short data, investors are becoming a bit scared and less optimistic. Although there are far from being excessive bear markets that may herald the bottom of the market, at least they are no longer overly bullish.
Manufacturer of outdoor coolers and beverage dispensers Snowman Holding (YETI) and wood-based panel products firm Azek (AZEK) previous report and Alibaba stock. On Wednesday, Yeti stock fell back to the buying zone. Azek fell below the buy point on Tuesday, and fell below the 50-day line on Wednesday, and issued an automatic sell signal. It broke further below the buy point and fell below the 50 antenna. As the Chinese Internet and Chinese stocks listed in the United States have been struggling for several months in general, the trading price of BABA stock is close to a 10-month low.
Microsoft and Floor & Decor are on the IBD rankings. Microsoft stock is also on the list of long-term IBD leaders. FND and Square are stocked on IBD 50.
How to spot stock market highs
The inflation rate has risen, and inflation has risen sharply.
The Labor Department reported on Tuesday morning that consumer prices rose 0.8%, while core CPI rose 0.9%, the highest since 1982. Both are much higher than expected. Consumer prices rose 4.2% year-on-year, the highest level since 2008. The core inflation rate rose by 3%, the highest level since 1996.
Rising price pressures are squeezing consumers and many companies. But the Fed said the higher inflation rate will be “temporary” and will disappear again by 2022. But what the market is worried about is that the inflation rate will rise or even exceed expectations and remain at a relatively high level.
Unless Fed policymakers can convince investors that high inflation will be temporary, or that they will respond quickly to continued price pressures without overreacting, financial markets may remain under dark clouds indefinitely.
The Labor Department released the producer price index on Thursday. This raw material is more sensitive to the price list of finished products to rising commodity prices.
Bitcoin price is shocked
The price of Bitcoin plummeted to $50,000 on Wednesday night compared to 24 hours ago, but it broke from a low of nearly $47,800. Earlier, Elon Musk announced on Twitter that people can no longer buy special cryptocurrencies that use the cryptocurrency. Slug Motors. He cited more and more fossil fuels being used for Bitcoin mining and trading. Musk also said that Tesla will not sell any Bitcoin, but once the digital asset is based on more sustainable energy, it will be used for trading.
Tesla bought some bitcoins in early 2021 and sold some of them for profit before the end of the first quarter, which boosted the first quarter’s performance.
Due to the widespread occurrence of “risk transfer” in financial markets, Bitcoin and most other digital assets have fallen on Wednesday.
Cryptocurrency exchange Coin Bank (COIN) fell nearly 5% in later trading. COIN stock closed down 6.4%.
Dow Jones Futures Today
Dow Jones futures rose 0.4% from fair value. S&P 500 futures rose 0.4%. Nasdaq 100 futures rose 0.55%.
Energy Secretary Jennifer Granholm (Jennifer Granholm) said that the colonial pipeline project restarted operations at around 5 pm Eastern time on Wednesday, which had a positive impact on the US economy, although this is not surprising. In response to a cyber attack, the largest gasoline pipeline in the United States serving the east coast of the United States was closed on Friday. As more and more gas stations dry out, it will take several days for the supply to return to normal.
Keep in mind that overnight trading in Dow Jones Index futures and elsewhere will not necessarily translate into actual trading in the next regular stock market session.
Join the IBD experts, who analyze the operational stocks in the rising stock market on IBD Live.
The number of global coronavirus cases reached 161.08 million. The death toll from Covid-19 is as high as 3.34 million.
In the United States, the number of coronavirus cases has reached 33.58 million, and the death toll has exceeded 597,000.
Stock market rebound
U.S. stock market overview today
|Russell 2000||(and many more.)||213.36||-5.60||-2.56|
Last updated: 3:14 PM 5/12/20 EST
The stock market’s rise was undoubtedly a bad day. It suffered a heavy sell-off and closed close to lows. Major stock indexes, sectors and leading stocks generally fell.
The Dow Jones Industrial Average fell 2% in Wednesday’s stock market trading. The S&P 500 Index fell 2.15%. The Nasdaq Composite Index fell 2.7%. Russell 2000 fell 3.2%, its lowest point since late March and the lowest closing price since February 1.
The 10-year U.S. Treasury bond yield jumped 7 basis points to 1.695%, the highest in a few weeks. This is the fourth consecutive rise in the 10-year Treasury bond, rebounding from last Friday’s intraday low of 1.47%, after the employment report in April was unexpectedly weak.
Among the best ETFs, the innovative IBD 50 ETF (FFTY) fell 4.7%, while the innovative IBD breakthrough opportunity ETF (BOUT) fell 3.1%. iShares expanded technology software industry ETF (IGV) fell 2.5%. MSFT stock is IGV’s largest holding. The VanEck Vector Semiconductor ETF (SMH) fell 4.1%. LRCX inventory is the main component of SMH.
The SPDR Standard & Poor’s Metals and Mining ETF (XME) fell 4.7%, while the Global X US Infrastructure Development ETF (PAVE) fell 3.2%. The US Global Jet ETF (JETS) fell 2.9%. SPDR Standard & Poor’s Home Builders ETF (XHB) fell 5%.
ARK Innovation ETF (ARKK) fell 3.7%, while ARK Genomics ETF (ARKG) fell 2.5%, reflecting more speculative story stocks. Tesla stock is the number one stock in the ARK Invest ETF. Square stocks are also ARK’s top five stocks.
The five best Chinese stocks to buy and watch now
Key inventory breakthrough, test key support
Apple shares fell 2.5% on Wednesday to 122.77. This is only slightly below its 200-day moving average and the equivalent weekly chart 40-week line. Just two days ago, AAPL stock fell below the 50-day line. The relative strength of AAPL stock is the lowest level since July last year.
Microsoft shares fell 2.9% to 239 points, breaking through its 50-day trading day and falling to its 246.23 buying point. MSFT stock initially cleared its flat base in early April, which was part of a base-based model.
Amazon’s stock price fell 2.2% to 3,151.94 points, below its 50-day and 200-day lines. Earlier this week, the RS line of AMZN stock hit a 10-month low.
LRCX shares fell 5.9% to 557.67 after closing below its 50-day line on Tuesday. Just a few days ago, Lam Research stock seemed ready to flash an early buy signal during a strong trading session, but the LRCX chart is now damaged.
Square shares fell 6.3% to 206.68, closing just above its 200-day moving average. However, the closing price of SQ stock was lower than its 40-week line. Square’s RS line is at its lowest level since November.
Tesla shares fell 4.4% to 589.89, bringing its weekly loss to 12.2%. TSLA stock is slightly above its 200 antenna, but like Square stock, it is slightly below its 40-week line. In addition, Tesla also broke the low at the end of March, although it was still above the bottom at the beginning of March. The RS line of TSLA stock is at a 2021 low.
TSLA stock fell 1% in after-hours trading.
FND shares plunged 4% to 101.39, flashing various sell signals. From the official purchase point 108.14 or 108.64, the Floor & Decor stock has now fallen sharply and is below its 50 antenna. FND stock also entered the 101.64 level earlier.
How to know it’s time to sell the stocks you like
Market rebound analysis
In the past few days, the stock market’s rise has deteriorated significantly. The major stock indexes broke through Tuesday’s lows all the way, turning to testing or breaking new support levels.
The Dow Jones Index fell below the 21-day exponential moving average. The S&P 500 index closed below its 21-day line on Tuesday, close to its 50-day line. S&P has not tested this key level since the intraday bottom on March 25. Breaking through the 50-day line is a very bad signal for the stock market to rise, and it may be a fatal blow.
The Nasdaq Composite Index is losing its 50-day period. Its next support level is the low in late March and then the low in early March. The latter is very close to the 200-day average, and the Nasdaq has not touched it for more than a year.
Technology seems to be weak across the board. The broad housing sector is struggling with rising Treasury yields. Even commodity stocks were mixed.
We have changed from a “hard penny” market to a market in which investors strive to make a few cents with one hand and lose money with the other.
Good news is bad news…is good news
The only good news is that investors are paying attention to the bad news.
The CBOE Volatility Index (commonly known as VIX) surged 26% to 27.57. The market’s fear indicator has been hovering near 52-week lows, and it rose by 11% on Tuesday. It is still below the peak in late March and early March-well below the peak in March 2020. This is in line with the main index at the beginning of March and March lows.
The put-rights ratio rose to 0.84, the highest level since October 30, when the stock market bottomed before the election tide. Normally, the ratio of call options must exceed 1.0 to show excessive bullish sentiment, but the high level of call option purchases over the past year seems to have distorted this indicator.
At the same time, the bull and bear market readings show that 58.2% of investment communications are bullish, while 17.2% are bearish. The bullish data is down from 60.4% in the previous week and 63.4% in the week ending April 23. More than 60% of the readings are highly bullish.
What to do now
Investors should reduce their risk exposure. You can retain some winning stocks that have a foothold or show relative strength. However, losers and laggards should be eliminated. Protecting your financial and spiritual capital is a top priority.
Yes, it is always possible to make lows on Wednesday, and the stock market starts to rebound from here. After a few days of losses, it is not surprising that at least a temporary rebound from current levels is possible. However, if this is a gathering that lasts for several weeks and months, then you will have many opportunities to reap great benefits.
Read The Big Picture every day to keep up with the market direction and leading stocks and industries.
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