Dow Jones Futures: Market Rally Pulls Back, Warren Buffett Stocks Rise; Elon Musk is making this FSD move

Dow Jones futures open Sunday night, along with S&P 500 futures and Nasdaq futures, with Fed chief Jerome Powell looming large late next week. The stock market rally pulled back from the main resistance last week, while government bond yields fell to 3%.


Highly-rated growth names, which had made huge strides in the past two months, were among the biggest losers.

Investors should wait to see how the market pullback plays out before adding another exposure.

Bitcoin and other cryptocurrencies sold hard on Friday but were relatively stable over the weekend.

Warren Buffett Stocks Apple (AAPL) and Occidental Petroleum (OXY) are worth watching. Occidental Petroleum broke up Friday when Warren Buffett’s Berkshire Hathaway won regulatory approval to increase its OXY stake to 50%. AAPL stocks are trading around a trendline entry. Tesla (TSLA), Celsius Holdings (CELH), AstraZeneca (AZN), Monolithic Energy Systems (MPWR) and insulation (PODD) are also located near several points of sale.

Tesla CEO Elon Musk announced another major price hike for the Full Self-Driving system.

CELH stocks and Monolithic Power are on the IBD Leaderboard watchlist. AZN shares are listed on SwingTrader. MPWR stocks are listed on IBD Long-Term Leaders. Celsius, Monolithic and Tesla stocks are on the IBD 50. Monolithic and OXY stocks are on the IBD Big Cap 20.

Insulet and AstraZeneca were IBD Stock Of The Day picks last week.

The video in this article thoroughly analyzed the weekly action of the market rally, while also discussing Occidental Petroleum, Monolithic Power and AZN stocks.

Fed chief Powell

Fed chief Powell will deliver a policy speech at the annual Jackson Hole meeting Friday. Powell has used this speech in previous years to highlight notable policy shifts. It’s unclear what he might say that would surprise the markets. The Federal Reserve is in the midst of a rate hike cycle to curb high inflation. Policymakers may soon move to smaller Fed rate hikes, but Powell may not be willing to tip his hand.

He could point to longer-term challenges, such as tight labor supply due to demographics, that could prompt the Fed to keep interest rates higher in the coming years.

Markets are divided on whether the Fed will raise interest rates by 75 basis points for the third consecutive time at its September 20-21 meeting, or whether they will opt for a half-point move.

Even after his speech, there will be several key economic reports ahead of the September Fed meeting, including the August jobs report and the consumer price index.

Bitcoin tumbles

Bitcoin slumped to around $21,000 on Friday, after already modestly pulling back earlier in the week. The digital currency traded above $21,000 on Sunday. After plunging below $18,000 in June, Bitcoin price had risen again to nearly $25,000 by August 14. Like speculative growth stocks, Bitcoin and cryptocurrencies are struggling with rising government bond yields. Higher yields are also supporting the dollar.

Bitcoin related stocks such as: Coinbase (COIN) has also fallen sharply in the past week.

Dow Jones Futures Today

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

Keep in mind that an overnight action in Dow futures and elsewhere does not necessarily lead to actual trading in the next regular trading session.

Join IBD experts as they analyze actionable stocks during the stock market rally on IBD Live

stock market rally

The stock market rally started the week towards or above the main resistance, but eventually retreated, mostly or completely on Friday.

The Dow Jones Industrial Average fell 0.2% in trading last week. The S&P 500 index fell 1.2%. The Nasdaq composite fell 2.6%. The small-cap Russell 2000 slipped 2.9%.

The 10-year Treasury yield rose 14 basis points to 2.99%, including 11 basis points on Friday.

US crude oil futures fell 1.4% to $90.77 a barrel last week, but rebounded well from weekly lows. Natural gas futures traded around 14-year highs.


One of the best ETFs was the Innovator IBD 50 ETF (FFTY) last week down 2.9%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.4%, wiping out strong weekly gains. The iShares Expanded Tech-Software Sector ETF (IGV) fell 3.9%. The VanEck Vectors Semiconductor ETF (SMH) fell 4.2%, with a share of MPWR.

SPDR S&P Metals & Mining ETF (XME) fell 4.2% last week. The Global X US Infrastructure Development ETF (PAVE) fell 1.4%. US Global Jets ETF (JETS) fell 4.2%. SPDR S&P Homebuilders ETF (XHB) fell lower, falling 3%, ending an eight-week winning streak. The Energy Select SPDR ETF (XLE) rose 1.3%, with OXY taking a remarkable position. The Financial Select SPDR ETF (XLF) lost 1.8%. The Health Care Select Sector SPDR Fund (XLV) fell 0.5% last week but rose on Friday.

As a result of more speculative story stocks, ARK Innovation ETF (ARKK) collapsed 14% last week, undercutting its 50-day line. ARK Genomics ETF (ARKG) plunged 13% to just above the 50-day mark.

Tesla stocks are a major holding in Ark Invest’s ETFs.

Five best Chinese stocks to watch right now

Warren Buffett Stocks

OXY shares rose 9.9% to 71.29 on Friday, past a 66.26 head-to-hand buy point in triple normal volume, according to MarketSmith’s analysis. Shares are now slightly out of the 5% buying zone, so investors may want to wait for a pullback.

Occidental Petroleum outperformed many other oil stocks, as Warren Buffett’s Berkshire has amassed an OXY stock stake of just over 20% in recent months.

On Friday, Berkshire announced that the Federal Energy Regulatory Commission has approved its request to buy up to 50% of Occidental Petroleum, triggering the outbreak. Berkshire applied for the right to do so on July 11, the company said Friday.

Berkshire’s No. 1 position is in Apple, which has outperformed other megacaps and the broader market over the past two months. Shares of Apple fell 1.7 percent on Friday to 171.55. The Dow Jones tech giant ended a six-week winning streak, but lost just 0.3%. AAPL stock is back below a bearish trendline, currently around 173, which could serve as an early entry. The official point of sale is 183.04. Ideally, Apple stock should soon be a handle.

Other stocks to watch

Tesla shares fell 1.1% to 890 and fell below the 200-day mark. On Tuesday, TSLA stock hit 944, a three-month high and an aggressive entry. Tesla generally held up much better than rival EV makers and Ark-type stocks last week, but is a long way from the official buy point of 1,208.10.

On August 25, TSLA’s stock will be split 3-for-1. It is unclear whether this will be a positive or negative catalyst. Tesla proposed the split months ago, while shareholders approved it on Aug. 4.

Tesla CEO Elon Musk said on Sunday that the price of Full Self-Driving will rise from $10,000 in North America to $15,000 on September 5, following the planned wide release of FSD Beta 10.69.2. Full Self-Driving, despite its name, is a level 2 driver assistance system. A declining percentage of new Tesla buyers are buying FSD, but it’s still a big money-maker.

Tesla vs BYD: Which EV Giant is the Best Buy?

CELH stock fell 6.5% to 98.28 last week, but is finding support around the 21-day moving average. A brief undercut of the 21-day line could be helpful. After rising from the end of May, Celsius stock has now formed a handle for a deep nine-month consolidation, with a buy point of 109.84.

AZN shares rose 0.8% last week to 67.17, nearly regaining an old buy of 67.50 after a recovery from the 50-day line the previous week. The relative strength line has weakened in recent weeks as AstraZeneca stocks consolidated as the broader market advanced. But AZN stocks and other defensive growth names may be poised to outperform again.

MPWR shares fell just over 3% over the past week to 511.65, which was an inside week from the week before. Monolithic Power shares are at 541.49 cup-with-handle to buy after the chipmaker surged from early July to early August. A drop to the 21-day moving average would coincide with the 500 level and just undercut the handle lows.

PODD stock fell 1.2% to 267.42 last week. The stock of the manufacturer of diabetes products has a buy of 276.48 in a deep double bottom. Insulet stocks could use a little more of a shakeout, perhaps up to the 21-day moving average.

Market rally analysis

The stock market rally reached resistance around the 200-day moving average last week. The S&P 500 came within one point of that key level, while the Dow Jones and Russell 2000 surged above it over the course of the week, but eventually finished below.

Initially, major indices, which resisted the pullback, paused even as ARKK and highly valued growth names saw sharp losses. But on Friday, the Nasdaq finally fell below its 10-day moving average, towards its 21-day line.

Major indices had been rallying for several weeks, with many former leaders shooting 50%, 100% or more from the bottom. So the 200-day line was a logical place for a retreat.

Rising government bond yields provided a news hook for last week’s pullback. Higher interest rates are a drag on equities, especially highly valued growth names. If energy prices rebound, if sustained, they could limit or even halt the decline in inflation, while leading to larger Fed rate hikes for a longer period of time.

Higher energy prices, however, are good news for oil and gas stocks like Occidental Petroleum, which were among the big winners last week.

Drug makers and defensive growth stocks held up relatively well, including AZN stocks and Hershey (HSY).

A pullback to the 21-day line would likely be good news for the market rally, giving stocks like Monolithic and Celsius deeper handles for a good shakeout. But you never know if a modest downturn will get a little more serious, or which sectors will struggle.

Time the Market with IBD .’s ETF Market Strategy

What to do now

Investors should be cautious about adding net exposure at this point as the stock market rally recedes. If you decide to buy a new stock, you can offset that by taking partial or full profits in other positions.

So far there is no need to reduce exposure, but don’t let decent gains drop to zero and be quick to reduce losing positions.

Now is a good time to work on watchlists. There is still a lot of leadership or potential leadership in the market. Many stocks can make handles, bases or pullbacks in the coming days, opening up a whole host of buying opportunities.

Read The Big Picture every day to stay up to date on market direction and leading stocks and sectors.

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

You may also like:

Best Growth Stocks to Buy and Watch

Join IBD Live and learn Top Charts and Trading Techniques from Professionals

IBD Digital: Unlock IBD’s Premium Stock Lists, Tools and Analytics Today

S&P 500 Stock In Buy Zone, Leading 5 Chip Names To Watch

Add a Comment

Your email address will not be published.