Dow Jones Futures Fall: Market Rally Faces Major Test; Disney tips as Bob Iger returns as CEO

Dow Jones Futures Fall: Market Rally Faces Major Test;  Disney tips as Bob Iger returns as CEO
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Dow Jones futures fell slightly Monday morning, along with S&P 500 futures and Nasdaq futures, with China’s Covid cases and lockdowns impacting. leg Disney (DIS) rose when Bob Iger returned as CEO.


The stock market rally held support levels last week. Now, can the S&P 500 move above its 200-day moving average in the coming days and weeks? Apple (AAPL) might be the key.

Apple stock held key levels, rising slightly despite the general market decline. Like the S&P 500, the iPhone tech titan is once again approaching its 200-day moving average. A decisive move above this level could present a buying opportunity. But another rejection could present another chance to short AAPL stock.

Meanwhile, other Dow Jones components Boeing (B.A), JPMorgan Chase (JPM) and GS stock have been quietly putting on a respectable run over the past few weeks, which has helped the Dow outperform in the current market rally. BA stock is technically right around a traditional buy point. Goldman Sachs (GS) is forging a deep base while JPM stock still has some way to go.

Disney brings back Bob Iger as CEO

In other Dow stock news, Bob Iger is back as CEO of Walt Disney (DIS), effective immediately. Iger resigned after a long tenure in February 2020 in favor of Bob Chapek just before the Covid crisis. Chapek has been criticized for a number of decisions. Disney’s revenue fell well short of expectations last quarter, and Chapek is set to announce layoffs and other cost cuts shortly.

Iger agreed to come back for two years, Disney said Sunday, “to set the strategic direction for continued growth” and to work with the board to find a new successor.

Disney stock is up 10% in premarket trading. Signaling the move to the 50-day moving average. But DIS stock is near bear market lows.

Dow Jones futures today

Dow Jones futures fell about 0.1% from a year earlier. Fair value, with the DIS share helping to limit losses. S&P 500 futures were down 0.3%. Nasdaq 100 futures lost 0.5%.

The 10-year government bond yield fell 1 basis point to 3.81%.

Crude oil futures fell. Copper fell 1%.

Hong Kong’s Hang Seng index fell 1.9% as Beijing effectively went into lockdown as the city reported Covid deaths for the first time in months. China’s Covid cases are rising rapidly, nearing official all-time highs. Conflicting signals from Chinese officials have added to the confusion over its strict “zero Covid” policy.

Think about the night action in Dow futures and elsewhere not necessarily translated into actual trading in the next regular time stock market Meeting.

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Analysis of the stock market rally

Last week, the Dow Jones Industrial Average was up less than 0.1% the previous week stock exchange trading. The S&P 500 Index fell 0.7% and the Nasdaq Composite fell 1.5%. Small-cap Russell 2000 is down 1.75%.

On Tuesday, February 11th, the S&P 500 briefly surpassed 4,000 on February 15th, approaching the 200-day moving average. This level is particularly important as the benchmark index turned back just 1 point from the 200-day moving average on August 1st. 16, triggering another leg in the bear market.

A decisive move above the 200-day moving average, which also approximates a trendline with falling spikes from the 1.4 all-time high, would be a strong signal that the uptrend is more than a bear market rally.

The S&P 500 breaching the 200-day moving average would also be a positive backdrop for leading stocks struggling near buy points in a choppy market.

Meanwhile, the Russell 2000 fell back below its 200-day moving average last week, but would likely regain that level ahead of the S&P 500. Buoyed by Boeing, Goldman and JPM stocks, the Dow Jones is comfortably above the 200-day moving average. But breaking last week’s high would take the Dow back to 34,000 and just below its August high.

The Nasdaq, weighed down by aggressive growth, is 8.3% below the 200-day moving average. A break above last week’s highs would be a good first step. Also positive: The 21-day moving average just surpassed the 50-day moving average on Friday.

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Thanksgiving week is not necessarily a good time for a big market move. Markets are closed on Thanksgiving with a half-day session on Friday. Volume will likely be low throughout the week. The following week ends with a bang. On Dec 1, investors will receive PCE inflation data for October along with ISM’s manufacturing index for November. On Dec. November 2nd job report due for November. This news could have a major impact on Fed rate hike expectations, bond yields and stock prices.

So it wouldn’t be a surprise if the major indexes traded in a range for the next week or so. There is nothing wrong with a small consolidation of the major indices and leading stocks.

Apple stock

Apple shares rose 1.1% to 151.29 last week after the previous week’s 8.2% surge. Stocks held their 50-day moving average, with the 21-day moving average set to overtake the 50-day moving average. AAPL stock is only slightly below its 200-day moving average. The Dow giant flirted with its 200-day trading day on October 1st. 28 following receipts. But that turned out to be a great short selling opportunity as shares fell to their worst close since mid-June within days.

A decisive move above the 200-day moving average, perhaps clearing the 10-28 high of 157.50 would offer early entry into a base set on the 8-17. But if Apple stock breaks out of this area reversing off to the downside, this could present a new short selling opportunity.

Apple’s success or failure at the 200-day moving average could be key to the S&P 500’s own attempt and vice versa.

Boeing stock

BA shares fell 2% to 173.89 after rising 47% over five weeks. While aerospace giant Dow Jones on Oct. 26 on earnings, shares rebounded, particularly on the back of a bullish cash flow forecast a few days later.

Technically, Boeing stock is just under 173.95 cup basis purchase point. But stocks are 9.5% above their 200-day moving average and 19.5% above their 50-day moving average. A break around the current level could create a safer buying opportunity.

Boeing is expected to turn a profit in 2023 and end four years with losses.

Goldman stock

GS shares slipped 1.55% last week to 379.20. On a daily chart, shares are extended from 358.72 cup bottom Buy point within a much larger consolidation. On a weekly chart, Goldman stock has held a buy point of 389.68 for a year Cup with handle base, accordingly MarketSmith Analysis. But after a 28% gain on a four-week winning streak, it’s an awfully small hold. A longer, lower grip would be helpful and allow the 50-day moving average to close the gap.

That relative strength line is at a four-year high, reflecting Goldman stock’s outperformance year-over-year. the S&P 500. The RS line is the blue line on the provided charts.

JPM share

JPMorgan shares fell 1.1% last week to 133.84. That’s after an advance of 29.5% over six weeks. Stocks are above their 50-day and 200-day moving averages, but still have work to do. JPM stock could form the right side of a long deep consolidation or bottom.

Read The big picture every day to stay in sync with market direction and leading stocks and sectors.

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


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