Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally rebounded Tuesday, with the S&P 500 retaking the 4,000 level.
Deere (DE) reports earnings early Wednesday, with DE stock in a buy zone. Deere earnings and guidance could be important for a variety of agriculture stocks, including CF Industries (CF) and Archer-Daniels-Midland (ADM), as well as machinery makers such as Caterpillar (CAT).
Energy stocks continue to do well. Solar leader Enphase Energy (ENPH), coal producer Peabody Energy (BTU), refiner CVR Energy (CVI), natural gas producer EQT Corp. (EQT) and LNG stock Excelerate Energy (EE) are all near buy points.
EE stock broke out on Wednesday, with Enphase moving back into a buy zone. BTU stock, CVR Energy and EQT are actionable.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures were flat. Nasdaq 100 futures fell 0.1%.
Crude oil prices edged higher. Natural gas futures climbed 2%.
New Zealand’s central bank hiked rates by a record 75 basis points, as expected.
Fed minutes from the November meeting will be released Wednesday.
Stock Market Rally
The stock market rally opened mixed Tuesday but gained stream for broad-based gains, closing near session highs.
The Dow Jones Industrial Average rose 1.2% in Tuesday’s stock market trading. The S&P 500 index and Nasdaq composite both jumped nearly 1.4%. The small-cap Russell 2000 popped 1.1%.
The 10-year Treasury yield fell 7 basis points to 3.76%. But the two-year Treasury yield, more closely tied to Fed policy, was roughly flat at 4.53%.
The dollar, after rallying for the prior three sessions, fell back on Wednesday. The greenback has fallen significantly since late September, especially from early November.
U.S. crude oil prices rose 1.1% to $80.95 a barrel, continuing a rebound from Monday’s short-lived dive. Gasoline futures jumped 4.3%, good news for refiners. Natural gas futures edged higher after falling more than 2% intraday.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) jumped 3.4%, helped by a number of energy and metals stocks. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.8%. The VanEck Vectors Semiconductor ETF (SMH) popped 2.9%.
SPDR S&P Metals & Mining ETF (XME) gained 3.2%, and the Global X U.S. Infrastructure Development ETF (PAVE) tacked on 1.3%. SPDR S&P Homebuilders ETF (XHB) rebounded 1.9%. The Energy Select SPDR ETF (XLE) climbed 3.1%. The Health Care Select Sector SPDR Fund (XLV) edged up 0.9% to a seven-month high.
Energy Stocks Near Buy Points
Enphase stock rose 4% to 320.44, closing above a 316.97 cup-with-handle buy point for the first time. However, the last three times ENPH stock got up to these areas, it reversed lower. Enphase stock tends to have big daily swings. So investors might look to see if ENPH stock pulls back to its fast-rising 21-day moving average.
BTU stock jumped 6.7% to 29.62, just below a 30.15 handle buy point in a seven-month consolidation. Tuesday’s move broke the trendline of the handle, offering an early entry. However, BTU stock is 9.3% above its 21-day line and 17% above its 50-day. The handle formed after strong Peabody Energy earnings.
CVR Energy stock rose 4.85% to 40.85, back above an old 39.81 buy point that could still be viewed as valid. Also, CVI stock has a three-weeks-tight pattern with a 42.31 entry. Getting above 41.31 might offer an early entry into that tight pattern.
EQT stock jumped nearly 6% to 43.79, breaking back above the 50-day line after rebounding from the 200-day on Monday. Shares are breaking a downward-sloping trendline. The official buy point is 52.07.
EE stock surged 9.6% to 30, clearing a 28.49 cup-with-handle buy point in above-average volume, according to MarketSmith analysis. That move to a record close cleared a lot of trading that took place going back to Excelerate Energy’s April IPO. EE stock had flashed early entries on Friday and Monday, though trade was below normal on those days. Excelerate is now slightly extended from the buy zone and well-extended from the 21-day line.
Market Rally Analysis
The stock market rally continues to show constructive action, trading in a narrow range after a modest pullback and support last week. On Tuesday, the major indexes bounced back from Monday’s losses.
The S&P 500 rebounded from its 10-day line, right at the 4,000 level, as it moves toward its 200-day line. While not above the Nov. 15 intraday high, it was the index’s best close in more than two months.
The 50-day line is just starting to turn higher on the S&P 500.
The Russell 2000 is getting very close to its 200-day. The S&P MidCap 400, which held its 200-day line last week, made further gains.
The leading Dow Jones topped the 34,000 level for the first time in three months, just below the Aug. 16 peak. The laggard Nasdaq found support at its 21-day line, just above its 50-day, but didn’t recoup all of Monday’s losses.
All of these indexes are working on handles, with the Dow sneaking above. Most stocks follow the major indexes’ action, so a lot of handles are forming on stocks near buy points. A slightly longer pause, perhaps until key economic reports late next week, would let moving averages start to catch up.
What To Do Now
Until the S&P 500 moves decisively above its 200-day line, investors may not want to add much exposure right now. With the Thanksgiving holiday muting trading and Fed-critical economic data next week, the market rally could be rangebound in the short run.
That could help stocks from a variety of sectors set up handles and have moving averages gain ground. Investors should be building up their watchlists. It’s definitely a time to be looking beyond traditional tech growth stocks, which are mostly lagging right now.
Given that many leaders are extended from moving averages, such as Excelerate Energy or BTU stock, it’s all the more important to be looking for early entries and acting quickly.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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