Dow Jones futures fell modestly Monday morning, with Boeing tumbling on the FAA grounding some 737 Max-9 jets. S&P 500 futures edged lower and Nasdaq futures tilted higher.
The stock market rally got off to a rough start in 2024, with the major indexes snapping nine-week losing streaks. But the S&P 500 and many leading stocks found support late in the week. Some stocks flashed buy signals.
Magnificent Seven stock Nvidia rebounded Friday, nearing a buy point. PulteGroup, Super Micro Computer, Eli Lilly and MercadoLibre, Snowflake also are showing constructive action.
Nvidia stock is on IBD Leaderboard. Eli Lilly stock and MercadoLibre is on SwingTrader. Nvidia, Snowflake, Super Micro and MELI are on the IBD 50.
The video embedded in the article discussed the rough market start to 2024 and analyzed Nvidia, Spotify and PHM stock.
FAA Grounds Boeing 737 Max-9 Jets
The FAA grounded some Boeing 737 Max-9 jets on Saturday. That came after a Boeing 737 Max-9 jet operated by Alaska Air lost some of its fuselage midair Friday. Alaska Air grounded its 65 Boeing 737 Max-9 jets Friday night.
Boeing stock plunged 7%.
Spirit AeroSystems, which makes the 737 Max fuselage and has been involved in many Boeing production woes over the past year, dived almost 20%.
Dow Jones Futures Today
Dow Jones futures fell 0.4% vs. fair value, with BA stock a key drag. S&P 500 futures lost a fraction and Nasdaq 100 futures edged higher.
The 10-year Treasury yield inched up to 4.06%.
Crude oil futures fell 3% as Saudi Arabia cut February selling prices, offsetting Red Sea shipping woes and Mideast fears.
Bitcoin moved just above $45,000 from Friday's 5 p.m. ET price of $43,997.39. The SEC is expected to approve spot bitcoin ETFs in the next few days.
U.S.-listed Chinese stocks and Hong Kong's Hang Seng slumped as Chinese shadow bank Zhongzhi Enterprise Group filed for bankruptcy liquidation.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Get ready for big AI and other tech news from Nvidia and others at the CES show. The JPMorgan Healthcare Conference also is this week.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally retreated, with the major indexes all suffering their first weekly losses since the end of October.
The Dow Jones Industrial Average dipped 0.6% in last week's stock market trading. The S&P 500 index fell 1.5%. The Nasdaq composite skidded 3.25%. The small-cap Russell 2000 tumbled 3.75%.
The S&P 500 found support at the 21-day. But the Russell 2000 hit resistance there and fell back, ending back within a long range. The Nasdaq is trading below its 21-day. The next obvious support area is the top of the Nasdaq's July-early December range.
With the major indexes and leading stocks around key levels, even modest moves could make the market look significantly more bullish or bearish, even if the action isn't truly decisive.
The 10-year Treasury yield surged 18 basis points to 4.04%. U.S. crude oil futures rebounded 3% to $73.81 a barrel last week.
Time The Market With IBD's ETF Market Strategy
Spot Bitcoin ETFs
The SEC is expected to approve the first spot bitcoin ETFs this coming week, potentially fueling much-wider institutional involvement. SEC staff have no more issues for spot bitcoin ETF applicants, Bloomberg reported Friday.
Bitcoin and notable crypto stocks such as CoinDesk and miner Marathon Digital have surged over the past few months in anticipation of a spot ETF. Bitcoin hit a 20-month high above $45,000 on Wednesday, but fell slightly for the week to just below $44,000. COIN stock also fell last week, while MARA stock whipsawed higher.
CoinDesk plans to acquire an unnamed company with a MiFID II license, letting it offer Bitcoin derivatives in the European Union, the crypto exchange told CNBC Friday night.
Nvidia
Nvidia stock dipped 0.9% to 490.97, rebounding late in the week from the 50-day/10-week line and closed back above the 21-day. Shares have a 505.48 flat-base buy point forged around the top of a double-bottom base. A move above 500 — a key resistance area for months — could offer an early entry into NVDA stock.
On Friday, Bank of America analyst Vivek Arya said that Nvidia could generate $100 billion in free cash flow over 2024-2025. That could go for shareholder returns — perhaps $30 billion to $35 billion — as well as acquisitions. Arya has a buy rating and $700 price target on NVDA stock.
Nvidia is expected to unveil its latest GeForce RTX gaming chips at a CES address on Monday at 11 a.m. ET.
Other Stocks Setting Up
Eli Lilly stock rose 6.1% to 618.55 last week, clearing early entries on Tuesday and Wednesday. On Thursday, LLY stock briefly topped a 629.97 flat-base buy point.
On Sunday, Eli Lilly forged a drug discovery deal with Isomorphic Labs, a unit of Google-parent Alphabet.
MELI stock fell 2.1% last week to 1,519.38, but bounced from its 50-day line late in the week, hitting resistance at the 21-day line. Clearing the 21-day decisively would offer an early entry. MercadoLibre stock now has a flat base with a 1,660 official buy point. That's part of a base-on-base pattern.
SNOW stock tumbled 5% to 189.12 during the week, but rebounded well off lows from its 10-week line. Like MELI, the data analytics software firm hit resistance at the 21-day line. Snowflake stock has a still-valid 192.66 cup-with-handle buy point, according to MarketSmith analysis.
PHM stock sank 1.7% to 101.48, but held up support despite rebounding Treasury yields. PulteGroup has a three-weeks-tight entry with a 105.13 buy point. That formed with the 20%-25% profit-taking zone from a cup-with-handle buy point cleared on Nov. 14.
SMCI rose 2.8% to 292.13 last week, rebounding from the 50-day and retaking the 21-day line. Iinvestors could use the 300 level as an early entry, slightly above Friday's high. Super Micro had a massive, multiyear run that ended with an ugly post-earnings gap down in early August. The subsequent consolidation has been volatile, but has started to tighten. Investors could view 327.55 as a handle entry.
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What To Do Now
The market rally got off to a rough start in 2024, but that wasn't really surprising after nine straight weekly gains. The S&P 500 and Nasdaq are near key levels.
So are many leading stocks. A few flashed buy signals, but whether those work will depend on the broader market.
The best that can be said is that bulls are trying to make a stand, but aren't making much forward progress.
Don't let your emotions go on a roller coaster with intraday swings, which can seem more significant when the market is around key levels.
Still, the market pullback is creating potential buying opportunities. So build up your watchlists, focusing on stocks finding support and showing relative strength. Stay engaged with the market, keeping an open mind so you're prepared to add exposure or step back.
The latest Boeing 737 Max woes underscore that bad news can slam a stock trying to hang on. That's something to consider as earnings season ramps up. JPMorgan Chase, Citigroup and UnitedHealth are among the big names reporting later this week.
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