June 29, 2022

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Dow futures drop: what to do after the stock market rally today;  Fed set to raise rates

Dow futures drop after market rallies; Here Comes Fed Chair Powell

Dow futures fell sharply early Wednesday, along with S&P 500 and Nasdaq futures, with recession fears growing as Federal Reserve Chairman Jerome Powell is scheduled to testify before Congress on Wednesday morning.




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The stock market’s bullish attempt had a strong session on Tuesday. But it is still a bullish attempt inside a bear market.

Cheniere Energy (liquefied natural gas), ExxonMobil (XOM), Eli Lilly (LLY), general dollar (DJ), Tesla (TSLA) Competition Lee Otto (LI), United Health (United nations) And the Northrop Grumman (No objection certificateShow strong positive action, with Lines of relative force At or near altitudes.

But few high-quality stocks are in place now. This is just one of many reasons to stay on the sidelines. While trying to rally, the uptrend has not been confirmed yet.

Northrop and Eli Lilly stock in the running IBD Leaderboard. Shares of Li Auto and Eli Lilly are located in defect 50. LLY stock is also on file IBD Big Cap 20.

Dow jones futures contracts today

Dow futures are down 1.15% against fair value. S&P 500 futures fell 1.4% and Nasdaq 100 futures fell 1.6%.

The 10-year Treasury yield fell 8 basis points to 3.23%.

US crude oil prices fell 5%. President Joe Biden called on Congress on Wednesday to suspend the federal gasoline tax of 18.4 cents per gallon for three months to provide some temporary relief at the pump.

Copper prices fell more than 3%.

Remember to work overnight in Dow Jones futures contracts and anywhere else that does not necessarily translate into actual circulation in the next regular session Stock market session.

Fed Chairman Powell testifies

Federal Reserve Chairman Powell is to testify on monetary policy before the Senate Banking Committee on Wednesday morning. Powell will appear before the House Financial Services Committee on Thursday.

It’s unclear if Powell will make new headway last week. On June 15, the Fed raised rates by 75 basis points, with the Fed chair saying either 50 basis points or 75 basis points on the policy meeting table in late July. Markets almost fully priced it for a three-quarter point rate hike.

Fed Chair Powell will testify at 9:30 a.m. ET, right at the opening bell, although the Fed may release its prepared remarks.

More and more Wall Street firms over the past couple of days are now predicting that the US or the world will fall into a recession, or put the odds at around 50-50.


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Tuesday’s stock market rally

The stock market rally has seen a strong business session. The Dow Jones Industrial Average rose 2.15% on Tuesday stock market trading. The S&P 500 rose 2.45%. Tesla, Exxon and UN stocks were among the top performers in the S&P 500, and the last two names were also Dow giants. The Nasdaq Composite Index is up 2.5%. Small cap Russell 2000 rose 1.8%.

Expired July crude oil futures rose 1% to $110.65 a barrel, from intraday highs. The price of August crude rose 1.4 percent to $109.52.

The 10-year Treasury yield rose 7 basis points to 3.31%.


Stock market forecast for the next 6 months


ETFs

between the Best ETFsThe Innovator IBD 50 ETF (fifty) gained 3.3%, while the Innovator IBD Breakout Opportunities ETF)fit) gained 2%. iShares Expanded Technology and Software Fund (ETF)IGV) made 1.9%. VanEck Vectors Semiconductor Corporation (SMH) rose by 2.8%.

SPDR S&P Metals & Mining ETF (XME) increased by 1.6% and the Global Infrastructure Development Fund (ETF) in the USA (cradle) rose 1.1%. US Global Gates Foundation (ETF)Planes) rose 0.8%. SPDR S&P Homebuilders ETF (XHB) rose 0.4%. SPDR Specific Energy Fund (SPDR ETF)XLE) rebounded 4%, with a huge component in XOM stock, the Financial Select SPDR ETF (XLF) rose 1.5%. SPDR Healthcare Sector Selection Fund (XLV) rose 2.3%, UN stock was topping the table, and Eli Lilly was also a notable component.

Shares reflect more speculative stories, the ARK Innovation ETF (see you) rose 4.4% and the ARK Genomics ETF (ARKG) 3%. Tesla stock remains major ownership across Ark Invest ETFs.


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LNG stockpiles

Cheniere Energy stock rose 5.5% to 132.95, approaching the 50-day moving average. On Friday, the LNG stock trimmed several months of trading, but then rose by significant volumes. LNG is consolidating with 150.10 buy points, although there may be early input. Several other LNG plays also bounced towards the 50-day streak.

Stock XOM

Exxon stock jumped 6.3% to 91.51, reclaiming its 50-day moving average and 89.90 cup handles arguably still in effect. buy point. XOM stock surged to 105.57 on June 8, but quickly gave up recent gains, dropping by 14% last week.

Ideally, ExxonMobil would move sideways and start forming a new consolidation before making significant progress.

ExxonMobil on Tuesday joined a $29 billion Qatari natural gas project. Other partners included ConocoPhillips (policeman), where are you (e) And the total energy (TTE). Meanwhile, Credit Suisse upgraded its rating on Exxon stock to Outperform with a $125 price target.

Stock LLY

Eli Lilly stock rose 2.2% to 297.35, closing hair below the 50-day line. Previous 314.10 purchase point from A flat base/ The base-on-base struct is no longer valid. LLY stock is working on a new consolidation. A break above a short, downward sloping trendline would provide an entry at around 306.

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Bristol-Myers Squibb (BMY), Vertex Pharmaceuticals (VRTX) And the Harmony in the biological sciences (HRMY) They show positive actions.

Li . auto inventory

LI stock rose 7.85 to 35.75 Wednesday, the highest close since January 2021. Li Auto stock nearly crossed a 37.55 buy point from a 55% deep merger. Ideally, the LI stock will handle, the more the better, digest its recent huge gains.

China’s Li Auto on Tuesday unveiled the L9, a new hybrid SUV. It is more expensive than Li One, which is already in the premium segment.

New (NIO) rose by 9.2% and Exping (XPEV) 6.8%, as both continue to bounce above the 50-day line but below the 200-day averages. Giant EV and battery BYD (BYDDF) rose 3.2% to 38.60, working at 39.81 handle cup buy points on the weekly chart.

Tesla stock jumped 9.35% to 711.11, just reclaiming its 21-day moving average in heavy volume. But the 50-day and 200-day lines present major obstacles. TSLA stock came close to paring its lows in late May last week, but it didn’t.


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Northrop Stock

National Oil Corporation stock rose 4.5% to 463.77, reclaiming its 21- and 50-day streak. Northrop’s stock has fallen strongly in the past two weeks, failing to break through a cup with a handle. The formation of a new consolidation can begin. A decisive move above the 50-day line could provide an early entry.

UnitedHealth shares

UN stock jumped 6.25% to 480.32, bouncing back above the 200-day moving average. The arrows closed right around a downward sloping trendline. Any force from this point could offer an early entry into UnitedHealth stocks. However, investors can look at 507.35 as a file double bottom Point of Purchase, which will also push UN stock above the 50-day line.

dollar common stock

DG stock rose 3.5% to 238.97, returned above the 50-day line and approached 240.07 cup with handle Point purchase, according to MarketSmith Analysis. Arguably, the general dollar stocks were already doable after they got rid of the downward sloping trend line on Tuesday. The 240 price level is in line with the tops of DG stocks in August and January.

Market Rise Analysis

Major indices saw a strong recovery on Tuesday, although volume was much lower than it was on Friday.

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After dropping last week to their lowest levels since late 2020, the Dow Jones, S&P 500 and Nasdaq Composite Indices were arguably about to rebound. All major indicators are still below their 10-day moving averages. The 50-day streak is a much higher hurdle, with the 200-day average and all-time highs in the distance.

Indexes’ best gains in history have been in bear markets or retracements, so Tuesday’s action in and of itself was not meaningful.

The S&P 500 and Nasdaq Composite were on the second day of trying to rally the stock market, while the Dow Jones was only on the first day.

If the rally continues, investors can look for Follow-up day Later this week to confirm the new uptrend. But this bear market has seen many confirmed rallies in the market that fade immediately or in a few weeks.

Not many stocks are in a position with the market selling so hard in 2022.

Energy stocks rebounded again after heavy losses last week. Some names like Exxon Mobil and LNG stocks sound interesting.

China EV names have been leading the way in recent weeks, but Li Auto may be using a long hiatus.

Ultimately, the stock market may struggle with the Federal Reserve aggressively raising interest rates and with the risk of a recession rising. That likely won’t change until inflation shows meaningful dips, which will likely take several months at best.


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What are you doing now

An attempt to bullish the market is trying to move forward, but it has not provided evidence that it has staying power. Even if there is a follow-up day soon, investors should be wary about re-entering the market, gradually adding exposure and speeding back up.

If this bullish attempt turns into an ongoing uptrend that lasts for weeks, months or years, there are plenty of opportunities to invest heavily.

For now, build your own watchlists of stocks with strong relative strength, especially those that hold or retrace key moving averages.

Read The Big Picture Every day to stay in sync with the trend of the market, stocks and leading sectors.

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