Dow Jones futures were stable early Wednesday morning, along with S&P 500 futures and Nasdaq futures. Tesla CEO Elon Musk tweeted Tuesday evening, perhaps jokingly, that he was going to buy Manchester United football club.
The stock market rally had a mixed Tuesday with major indices retreating to midday highs as the S&P 500 came within one point of its 200-day moving average.
walmart (WMT) and DIY store (HD) gains lifted the Dow and many retailers, with Costco Wholesale (COST), AutoNation (AN) and Penske Automotive (PAG) to settle purchase points.
Antero Resources (AN) and EQT Corp. (EQT) outperformed buying points as natural gas prices rose.
Tesla (TSLA) briefly released an aggressive entry on Tuesday morning, but TSLA stock returned slightly lower with the Nasdaq.
BBBY Stock Leads Meme Mania
In the meantime, Bed Bath & More (BBBY) continues to skyrocket amid renewed interest in this meme stock. BBY shares rose 29% to 20.65 in record volume, but that’s after jumping to 28.60 intraday. Bed Bath & Beyond, which is a real-world money-losing homewares retailer with rapidly declining sales, is up 355% from a July 27 low of 4.54.
The BBBY stock rose 9% overnight.
Ryan Cohen, Chairman of Original Meme Stocks GameStop (GME), announced Tuesday that he still owns Bed Bath & Beyond stock and hefty call options on BBY stock betting on prices of 60-80.
GME shares rose 6.3% on Tuesday.
Wednesday’s most important win
early wednesday, Target (TGT), lowe’s (LOW) and TJX Cos. (TJX) continues the profit stream in the retail sector. chip maker Analog Devices (ADI) and sea container shipper Zim Integrated Shipping (ZIM) also report.
Shares of Target, Lowe’s and TJX advanced Tuesday with other retailers, but their charts need work. ADI stocks move up to the right of a base. ZIM stocks find support at key moving averages.
The Commerce Department is releasing data on July retail sales at 8:30 a.m. ET. At 1 p.m. ET, the Federal Reserve will release the minutes of its late July Fed meeting.
Costco shares have been added to IBD Leaderboard and SwingTrader.
The video in this article discussed the market action and analyzed AR stocks, Costco and insulation (POD).
Dow Jones Futures Today
Dow Jones futures were up 0.1% from fair value. S&P 500 futures rose higher. Nasdaq 100 futures were flat.
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 in the stock market rally on IBD Live
Stock Market Rally Tuesday
The stock rally was mixed for much of the morning, turning broadly higher in the afternoon before fading again.
Dow Jones giants Walmart and Home Depot beat early the second quarter on Tuesday. As a huge relief to the markets, Walmart did not lower its outlook for the rest of the year.
The Dow Jones Industrial Average rose 0.7% in Tuesday’s trading, with WMT stocks up 5.1% and Home Depot up 4.1%. The S&P 500 index climbed 0.2%. The Nasdaq composite fell 0.2%. The small-cap Russell 2000 closed just below breakeven.
The price of crude oil in the US fell lower, falling 3.2% to $86.53 a barrel, the lowest closing price since late January. US natural gas futures rose 6.9% to the highest closing price in 14 years. Energy prices in Europe continued to peak, driving demand for LNG exports up.
Ten-year government bond yields rose by 3 basis points to 2.82%.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.4%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 0.6%. The VanEck Vectors Semiconductor ETF (SMH) fell 1.1%.
SPDR S&P Metals & Mining ETF (XME) climbed 0.9% and the Global X US Infrastructure Development ETF (PAVE) rose 0.6%. The US Global Jets ETF (JETS) rose 0.9. SPDR S&P Homebuilders ETF (XHB) climbed 1%. The Energy Select SPDR ETF (XLE) fell 0.2% and the Financial Select SPDR ETF (XLF) rose 0.7%. The Health Care Select Sector SPDR Fund (XLV) fell 0.3%.
As a result of more speculative story stocks, ARK Innovation ETF (ARKK) fell 2.8% and ARK Genomics ETF (ARKG) fell 3.9%. Tesla stocks are still a major holding in Ark Invest’s ETFs.
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TSLA shares fell 0.9% to 919.69 Tuesday. Intraday, shares hit 944, just above an aggressive entry of 940.92 from a far too low handle. Tesla shares quickly fell with the Nasdaq and highly appreciated growth, but held support near the 200-day line.
Musk scores his own LOL?
On Tuesday evening, Tesla CEO Elon Musk tweeted: “I’m buying Manchester United, you’re welcome.” The world famous Manchester United (MANU) football team is publicly traded on the NYSE. Musk was probably joking, but you never know with the world’s richest troll.
If it’s a joke, it could upset the SEC.
The tweet came just after extended trading ended, so MANU shares were unaffected.
The Manchester U tweet comes as Musk tries to get out of a deal to buy Twitter (TWTR) for $44 billion, or $54.20 per share.
Tesla’s Biggest Rival Is Now His Partner
Shares in Buying Zones
Costco shares rose 1.3% to 553.02, just a buy point of 552.81 head-on-handle. COST stocks rebounded on strong Walmart earnings and confirmed the second half outlook. But earnings from Target on Wednesday and smaller rival BJ’s Wholesale (BJ) On Thursday, COST shares could fluctuate.
AutoNation shares jumped 7.3% to 132.49, surpassing the resistance seen in recent months in above-average volume. Intraday, the shares surpassed the official buy point of 133.58 after a nine-month consolidation. The relative strength line hit a new high, reflecting AutoNation’s outperformance against the S&P 500 index. A stock seems to be on the verge of expanding into the more useful 125-126 area and especially moving averages.
Shares Penske Automotive rose 5.6% to 124.16, above a head-and-hand buy point of 121.55. Volume was above average for PAG stocks.
EQT shares rose 4.3% to close at 47.19, providing a 46.81 head-and-handle buy point, according to MarketSmith’s analysis. Shares rose after closing time.
Shares of Antero Resources rose 4.2% to 40.55, but closed in the lower half of the range on Tuesday. AR shares hit 42.16 intraday, short above a 41.05 buy point from a handle that is slightly too low to be valid.
Market rally analysis
The stock market rally shrugged off some mixed early weakness to close higher. The Dow Jones, which just crossed the 200-day mark on Monday, led the way with a fifth consecutive gain. The Russell 2000, which ticked past that long-term average on Friday, tested and held onto Tuesday.
The S&P 500 nearly reached the 200-day mark before falling back. But it was certainly not an emphatic rejection.
The Nasdaq has a small distance to hit the 200 days.
Growth stocks are probably in need of a breather.
There may also be some rotation in sectors of the “real economy” such as energy and commodities, retail and even some modes of transport.
But growth reluctantly gave up ground. The Nasdaq, which fell more than 1% in the morning, recovered to modest positives before sinking to finish slightly in the red. ARKK and speculative growth names retreated somewhat.
Meanwhile, the BBBY stock shows speculative meme mania is bubbling up again.
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What to do now
The stock rally is hovering around a key area of resistance, with some rotation, at least in the short term, towards wet gas, retail and other real economy names.
Investors should remain cautious about adding exposure. For example, if you add EQT stocks or Costco, that’s fine, but don’t fill your portfolio with wet gas and retailers.
Perhaps this week’s winners will remain in the lead for some time to come. Or the Nasdaq could quickly regain the lead. Or the market rally could see a noticeable pullback to the 21-day line.
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