Dow Jones Futures Loom: Market Correction Smashing Leaders; Is Tesla next to crack?


Dow Jones futures will open Sunday evening along with S&P 500 futures and Nasdaq futures.




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The stock market declined last week as Treasury yields rose on the Fed rate-hike outlook. Major indices broke several key support levels while major stocks suffered heavy losses.

Stocks rose Friday morning, but closed lower despite slightly lower yields.

Tesla (TSLA) made a new handle buy point last week, but fell solidly on Friday and sharply throughout the week. TSLA stock is in danger of breaking out, joined by several other leaders over the last week or two.

meta platform (Meta), FedEx, (FDX), general Electric (GE), costco wholesale (Cost), Lee Auto (LI), Arista Networks (a net), Vertex Pharmaceuticals (vrtx), Synopsis (SNPS) and CrowdStrike (CRWD) is among the stocks that are holding relatively well at the moment.

But some of these names will look actionable in a rapidly growing market. In the current environment, it is time to go window shopping versus making new purchases.

Meta Stock is on the IBD Leaderboard. SNPS stock is on the IBD Long-Term Leaders. CRWD stock is at IBD 50. CRWD stock is on the IBD Big Cap 20. Meta Platform was IBD’s Stock of the Day on Friday.

Videos embedded in the article discuss weekly market action as well as in-depth analysis of Tesla, Meta, and Vertex stocks.

Dow Jones Futures Today

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

Remember that overnight action in Dow futures and elsewhere does not translate into actual trading in the next regular stock market session.


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stock market correction

The stock market suffered huge losses throughout the week.

The Dow Jones Industrial Average fell 1.9% in last week’s stock market trading. The S&P 500 index fell 2.9%. The Nasdaq Composite fell 3.6%.

The 10-year Treasury yield rose 12 basis points to 4.44%. The yield reached 4.49% on Thursday, the highest since October 2007. The US dollar continued a long weekly winning streak, with gains continuing on Friday.

US crude oil futures rose 1 cent to $90.03 a barrel, falling from their 2023 high, before rebounding slightly on Friday.

The market recovered after Wednesday, with the S&P 500 and Nasdaq closing below their August 29 follow-up lows, a highly bearish signal. The S&P 500 and Dow have fallen off their August lows, while the Nasdaq is not far off.

The small-cap Russell 2000 lost 3.8% last week and the Invesco S&P 500 Equal Weight ETF (RSP) lost 3.3%. Both fell well below their 200-day limits to their worst levels since early June. They reflect the weak expansion that has been troubling the market for a long time.

Sure, the market was sure to rise, but Friday morning’s gains faded. Even at session highs, Friday’s gains weren’t that meaningful, but it’s discouraging to see the bulls struggling to hold their ground.

Right now there are buying signals in very few stocks.

Big stocks have suffered huge losses. NVIDIA (NVDA) is now decisively below its 50-day line. Celsius Holdings (CELH) fell slightly below its 50-day. Several stocks that looked promising, such as Uber Technologies (Recover), draftkings (DKNG) and service now (Now), the selloff occurred amid a market recovery.


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etf

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) declined 5% last week. The iShares Extended Tech-Software Sector ETF (IGV), which also includes CRWD stock, declined 3.2%. The VanEck Vector Semiconductor ETF (SMH) fell 3.3%, its third consecutive heavy loss. SNPS stock is part of IGV and SMH.

Reflecting stocks with a more speculative story, the ARK Innovation ETF (ARKK) declined 9.85% last week and the ARK Genomics ETF (ARKG) sold off 8.5%. Tesla stock is the No. 1 holding in Ark Invest’s ETF, although Cathie Woods’ Ark sold 170,000 Tesla shares from Tuesday-Thursday.

The SPDR S&P Metals & Mining ETF (XME) retreated 3.3% last week. The Global The US Global JETS ETF (JETS) fell 4.6% and continued its sharp decline. The SPDR S&P Homebuilders ETF (XHB) rose 3.45%. The Energy Select SPDR ETF (XLE) declined 2.9% and the Health Care Select Sector SPDR Fund (XLV), led by VRTX stock, lost 1.5%. The Industrial Select Sector SPDR Fund (XLI), with both GE and FDX stock holdings, dropped 3.1%, slipping below its 40-week.

The Financial Select SPDR ETF (XLF) declined 3.4% and the SPDR S&P Regional Banking ETF (KRE) declined 5.8%.


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tesla stock

Tesla stock fell nearly 11% to 244.88 last week, giving up nearly three times all of last week’s gains on bullish calls from analysts on the EV maker’s Dojo supercomputer and self-driving prospects. TSLA stock now has a handle, giving it a 278.98 buy point. But shares are now 4% below the 50-day line, a sharp decline in recent volume. Analysts have been quick to lower third-quarter delivery estimates, with Tesla likely to release actual figures around October 2.

Is Tesla the next major stock to crack?

stocks to watch

Meta stock fell 0.4% to end the week at 299.08, just below the 50-day line. According to MarketSmith, the internet giant now has a handle, giving it a low buy point of 312.87. The Facebook parent is expected to discuss its metaverse and artificial intelligence efforts at its annual Connect conference on September 27-28.

GE stock fell 3.7% to 111.25, cutting its 50-day low in a tight flat base in an outside week. LULU stock and Vertex bounced back from near their 50-day lines intraday. Arch Capital and Costco withdrew from the close of the purchase. LPG stock moved towards a cup-with-handle buy point.

FDX stock was slightly above its 50-day line on FedEx earnings last week, offering early entry at Thursday’s high.

COST stock is stalling near a flat-base buy point, having bounced from near the 50-day line on Friday to end the week partially higher. Costco’s earnings are due on Tuesday.

ANET stock fell 2.4% to 180.34, failing to reclaim the 50-day line on Friday. Technically, Arista is in pre-buy territory, but investors should wait for more strength.

Synopsis stock declined slightly for the third straight week, falling 1.1% to 446.85. The chip design software maker tried and failed to reclaim its 50-day on Friday. SNPS stock has a buy point at 468.03 or 471.15, but a break of a minor downtrend could provide an early entry.

VRTX stock had a solid mid-week rise, but it closed just 0.2% above the 50-day line at 349.63, within a flat base. September 20 High offers early entry.

CRWD stock is technically in old buy territory, but investors may want to see more strength. The cybersecurity leader tried to jump Thursday after giving strong long-term guidance, but lagged behind amid market troubles. A move above Thursday’s high could be an aggressive entry.

LI stock fell below its 50-day line, and headed back toward that level on Friday. China EV startups base double-bottom, but a decisive move above the 50-day line would offer early entry.


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What do we do now

There is a phase of improvement going on in the stock market. This is not the time to take new positions and most major stocks have suffered serious losses in any case. If the broader market continues to fall, the few stocks that are holding on could easily collapse.

Improvement may end soon, or may last for several weeks or months.

Don’t try to guess when the market will make a new uptrend. Your job is just to be ready when this happens. Keep your watch list updated.

You will have some stocks that are close to being actionable, but you should have many stocks showing strong relative strength that are not quite in good shape.

Read The Big Picture every day to keep up with market direction and leading stocks and sectors.

Please follow Ed Carson on X/Twitter @ibd_ecarson And threads on @edcarson1971 for stock market updates and more.

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