Dow Jones futures: what to do as the bear market intensifies; Tesla Rival leads 5 key actions

The Dow Jones futures will open Sunday evening, along with the S&P 500 and Nasdaq futures. The price of Bitcoin fell below $ 20,000 on Saturday as cryptocurrency problems continued.

The bear market intensified last week amid growing concern that the Federal Reserve will be forced to drive the economy into recession in order to curb inflation.

With major indices falling toward their pre-Covid peaks, investors should be on the sidelines. Don’t get excited about one day’s bounces, such as Friday’s technology breakthrough. Instead, prepare to take advantage of the upcoming sustained uptrend.

There aren’t many stocks that hold up, but here are five that do a reasonable job: Tesla’s rival (TSLA), BYD (BYDDF), Vertex Pharmaceuticals (VRTX), fertilizers and lithium play SQM (SQM), Eli Lilly (LLY) and Enphase. Energy (ENPH).

They all have lines of force relative to or near maximums. The RS line, the blue line of the provided graphs, tracks the performance of a stock against the S&P 500 index.

BYD shares are close to a traditional point of purchase. SQM shares are finding support on its 50-day line after making big round-trip gains. ENPH stocks returned to that key level on Friday. The shares of Vertex and Eli Lilly are not well below their 50-day lines.

LLY shares are on the IBD leaderboard. The shares of Eli Lilly and SQM are on IBD 50. BYD was the existence of IBD on Friday.

The video embedded in this article talked about the weekly market action and analyzed the actions of BYD, SQM and Enphase.

Bitcoin is sinking

Bitcoin broke below the $ 20,000 psychological level on Saturday, a new 18-month low. The largest cryptocurrency fell to $ 18,739.50, just below the December 2017 high. Bitcoin is currently trading above $ 19,000, well below the November 2021 high of $ 68,990.90.

Other cryptocurrencies are falling as much, or more.

Investors have fled risky assets generally amid fears of inflation and recession. In recent weeks, several cryptocurrency lenders have stopped withdrawals.

Dow Jones futures today

Dow Jones futures open Sunday at 6 p.m. ET, along with the S&P 500 and Nasdaq 100 futures.

US markets will be closed on Monday in view of the June holiday, but other stock exchanges around the world will be open. Dow futures will normally trade on Monday.

Remember that overnight action on Dow futures and elsewhere does not necessarily translate into actual trading at the next normal stock market session.

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Stock Market

The stock market again had big weekly losses, with major indices falling to their worst levels in more than a year.

The Dow Jones Industrial Average plunged 4.8% on the stock market last week. The S&P 500 fell 5.8%. The Nasdaq compound fell 4.8%. The small Russell 2000 capitalization fell 7.5%.

The 10-year Treasury yield rose 8 basis points to 3.24%. On Tuesday, the 10-year yield soared to 3.48%, an 11-year high.

U.S. crude oil futures fell more than 9% to $ 109.56 a barrel last week, breaking a seven-week loss streak. Gasoline futures also fell sharply. Natural gas prices fell.

Stock market forecast for the next six months

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell just over 12% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) skidded 9.1%. The ETF of the iShares Extended Technology Software (IGV) sector stumbled 5.1%. The VanEck Vectors Semiconductor ETF (SMH) lost 8.1%.

SPDR S&P Metals & Mining ETF (XME) was up 10.4% last week. The Global X US Infrastructure Development ETF (PAVE) faltered by 8.6%. US Global Jets ETFs (JETS) were down 8.9%. SPDR S&P Homebuilders ETF (XHB) was down 11.4%. The Energy Select SPDR ETF (XLE) fell 17.2% and the Financial Select SPDR ETF (XLF) fell 4.8%. The SPDR Fund for the Selected Healthcare Sector (XLV) lost 4.5%, with the two holdings of Lilly and VRTX.

As a reflection of the more speculative stocks, the ARK Innovation ETF (ARKK) fell 3.3%, recovering the lows and still not lowering the lows at the end of May. ARK Genomics ETF (ARKG) fell just under 1% after setting a new two-year low. Tesla remains a major stake in Ark Invest ETFs. Ark holds a small position in the shares of BYD.

Top five Chinese stocks to watch now

WORLDWIDE

Shares of BYD rose 4% on Friday, but fell 4.1% to 37.45 during the week, breaking a five-week winning streak. The shares have been forged a handle on a weekly chart, giving it a buy point of 39.81. With such a deep base, 48%, the risks of a broken bankruptcy are higher. A long handle, especially one that is long enough to be its own tight base, would be constructive.

But with the stock of electric vehicles in China, and Chinese stocks listed in the U.S. in general rising, it is possible that BYD shares will not hold for long. Nio (NIO), Xpeng (XPEV) and Li Auto (LI) have been increasing, with Li Auto approaching the maximum.

BYD’s internal battery and chip operations, along with massive capital spending over the past 18 months, have driven strong sales growth and allowed the company to avoid supply chain blockage and supply chain problems. China Covid. Sales of plug-in electric and hybrid vehicles will surpass Tesla-only electric vehicle sales in the second quarter and may maintain that lead.

Shares of Tesla fell 6.7% last week to 650.28, almost lowering the lows at the end of May.

Tesla Vs. BYD: Which EV giant is best to buy?

Emphasis stock

Shares of Emphasis fell 5.8% to 184.90 last week. Friday’s 8.9% gain pushed ENPH shares above its 50- and 200-day line. A rupture of a double-bottomed base in early June quickly faded with the 193-point buy point no longer valid. But now a handle has been formed, with a buying point of 217.33 just above the June 8 high. Keep in mind that Emphasis stocks have big daily moves. Although solar stocks outperformed oil and gas names on Friday, this may not last long.

Still, shares of ENPH and SolarEdge Technologies (SEDG) were among the best performers on the S&P 500 on Friday. The SEDG stock regained its 50-day line, working on a cup base with handle.

Vertex stock

Vertex shares rose 3.2% to 253.09 last week, almost regaining its 50-day line with Friday’s 4.8% pop. A cup purchase point with a handle of 276.10 is no longer valid, so the official entry is 292.85. But investors could use 279.23 as early entry.

Eli Lilly Stock

Eli Lilly’s shares fell 2.15 to 390.90 last week, hitting resistance at the 50-day line on Friday. A strong move above the 50-day line could provide early entry for LLY shares. A previous flat base buy point of 314.10 is no longer worth it, but Lilly’s shares are in the process of forging another consolidation on the side.

Stock of square meters

SQM shares fell 6% last week to 90.29, but rose on Friday after finding support for its 50-day line. Shares wiped out a 27% gain from a 90.97 buyout point in recent weeks. But a sharp rebound from the 50-day line could provide input for SQM shares.

SQM and BYD are key components in the Global X Lithium & Battery Tech ETF (LIT), along with Tesla.

Market analysis

The severe market correction, a bearish market for the S&P 500 and the Nasdaq, continued to worsen last week.

Friday’s mixed action wasn’t very inspiring. Yes, the Nasdaq and the S&P 500 were up on Friday, so technically it’s the first day of a stock market recovery attempt from those two indices. But they only reduced the pronounced weekly losses.

The S&P 500, Dow Jones and S&P 500 reached their worst levels since late 2020.

Even if the market goes up and organizes a follow-up day in the near future, there would still be plenty of reasons to be skeptical and few stocks to buy.

The oil and gas sector, the only lasting area of strength in the market, collapsed last week, with many big winners showing signs of selling. The sector may not be over, but it was a change of character, with damaged letters.

While some stocks like BYD and SQM are close to buying points, and other names like Vertex, Lilly, or Enphase might be interesting with a few solid sessions, many potential leaders may need weeks of repairs. And this is in a scenario in which a new market rally is firmly established.

Right now, the stock market is much more likely to continue to decline. An economy moving toward a recession while the Federal Reserve is at the beginning of a cycle of aggressive hardening is not a good environment for action.

The major indices are all close to their pre-Covid peaks. This could provide a potential level of support, but should not be maintained. Russell 2000 is already lowering that key level.

Time to market with IBD’s ETF market strategy

What to do now

Investors have no reason to invest, even energy stocks flicker sell signals. The only possible exception would be a modest exposure to long-term winners.

However, it is important to stay committed, watching market action and preparing for the next uptrend.

It’s time to get your pencils, not your pens, to update your watchlists. Look for stocks with strong relative strength, especially if they maintain key support levels. But many stocks with strong RS lines will have ugly graphics right now.

Read The Big Picture every day to keep up with market leadership and leading stocks and sectors.

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