Dow Jones futures and S&P 500 futures fell late Tuesday. Nasdaq futures fell modestly on Netflix shares, which were the titles of those who changed revenues after the program. Another tough session for the stock market rally followed.
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Growth names and small capitals were sold on Tuesday with Futu Holdings (FUTU) collapses after a strong eruption on Monday. But travel parts have also collapsed, steelmakers, miners, energy companies, industry and finance are retiring.
Technological titans have withstood quite well, with Microsoft (MSFT), Google parent Alphabet (GOOGL) and Facebook (FB) approximately flat. Apple (AAPL) withdrew slightly after the “Spring Loaded” product event, but outperformed in recent weeks. But the strong action in the stock of Google, Microsoft, etc. masked recent weakness.
Netflix earnings
Netflix (NFLX) reported earnings after closing, along with Intuitive surgery (ISRG), Edwards Lifesciences (THAT), CSX (CSX) and Tenet Healthcare (THC).
Netflix earnings exceeded viewings, but subscriber growth of 3.98 million fell sharply. Netflix faces post-pandemic environment amid growing competition Disney (DIS) and its Disney + streaming service.
NFLX fell 9% overnight, signaling a move below the 50- and 200-day lines. Shares reversed on Tuesday to fall 0.9% to 549.57. Netflix shares have a 559.85 buy point from a tiny handle on a weekly chart, as well as a downward trend line just below this level. But that may not be relevant if the NFLX stock falls on Wednesday.
The DIS stock lost a fraction overnight. Disney fell 2.5 percent on Tuesday, falling below the 50-day line and close to the bottom of its flat base.
Year (ROKU) fell sharply overnight amid concerns that global flow growth will slow. ROKU shares plunged 1.7% on Tuesday, continuing to retreat after hitting resistance on its 50-day line.
Other key gains
Intuitive surgical gains exceeded predictions for the leader of robotic-surgical systems. ISRG shares rose 4% to about 842 in extended transactions, after shares closed 8 cents to 811.11. The intuitive surgical stock has a purchase point of 812.89 from a double-bottomed base.
Edwards Lifesciences earnings exceeded the number of views, with the medical device manufacturer guiding for the second quarter and for the entire year. EW shares increased 4% in overnight transactions. Shares rose 1.2% on Tuesday to 89.63, moving into a buy zone from a double-low buy point of 88.30, according to MarketSmith analysis.
CSX earnings missed while revenues exceeded. CSX shares fell 1.5% in late transactions. Shares fell 0.3% on Tuesday, after hitting a record high during the day. CSX shares are extended from a point of purchase.
Tenet Healthcare’s earnings exceeded the hospital operator’s views. THC shares increased by almost 3% overnight. The stock of principles fell 1% on Tuesday to 52.04, just below its 50-day line, but in a brief consolidation, which is almost an adequate basis. The buying point for THC shares is 57.98. But investors could use 54.98, even above Friday’s high, as an early entry, along with a 10-week linear return.
ASML Earnings (ASML) is due on Wednesday morning with his giant colleague Lam Research (LRCX) to touch after closing Wednesday. Both the ASML stock and the LRCX fell on Tuesday, but remain in the buying areas.
Apple product event
Apple debuted some announced new iPads and Macs with its internal chips at the “Spring Loaded” product event, as well as the launch of Air Tag tracking devices. Also plan a podcast subscription service. Apple shares fell 1.3% to 133.11. AAPL shares may form an indicator on a daily or weekly chart this week. It could also form a tight three-week pattern. Both would provide lower points of purchase. But for now, the official entry at the base of the cup is 145.19.
The shares of LRCX and Microsoft are in the IBD ranking. MSFT shares are the long-term IBD leader. Lam Research and ASML stock are on IBD 50.
Dow Jones Futures Today
Dow Jones futures was just below fair value. The S&P 500 futures fell 0.1%. Nasdaq 100 futures retreated 0.4%. The actions of NFLX and Roku were an obstacle in the future of the Nasdaq.
Remember that overnight action in the Dow future and elsewhere does not necessarily translate into effective trading in the next regular trading session.
Join IBD experts as they analyze the actions that can be done in the stock market rally on IBD Live.
Coronavirus news
Coronavirus cases worldwide have reached 143.50 million. Covid-19 deaths exceeded 3.05 million.
Coronavirus cases in the United States have reached 32.53 million, with more than 582,000 deaths.
Johnson & Johnson (JNJ) resumed deliveries of its one-time coronavirus vaccine after European regulators considered it safe with several new guidelines after looking at a handful of cases with a very rare but serious blood clotting problem. . J&J vaccines have been shut down in the United States for several days because of concerns that health care professionals would not recognize this type of clotting, which requires a different treatment from more common blood cells. An FDA group is expected to recommend the resumption of the J&J vaccine on Friday, perhaps with some restrictions or guidelines.
JNJ shares rose 2.3% to 166.48 on better-than-expected vaccine news and earnings, breaking a trend line and briefly offsetting an early entry of 167.13 for the Dow Jones giant. The relative power line for J&J shares is weak and has been declining overall since 2009.
The stock market rally on Tuesday
The stock market rally registered several serious blows on Tuesday, with a widespread weakness among the main stocks.
The Dow Jones industrial average retreated 0.75% in Tuesday’s trading on the stock exchange. The S&P 500 index lost 0.7%. The Nasdaq composite sank 0.9%. Russell 2000 skidded just over 2%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 2.7%, while the Innovator IBD Breakout Opportunities (BOUT) ETF lost 1.9%. The iShares Expanded Tech-Software Sector (IGV) ETF fell 1.1%. Microsoft shares are the largest IGV stake, while many software shares have had higher losses. The VanEck Vectors Semiconductor (SMH) ETF decreased by 1.4%. ASML stock and LRCX are notable SMH components.
The SPDR S&P Metals & Mining ETF (XME) fell just over 3%, while the Global X US Infrastructure Development ETF (PAVE) lost 1.1%. The US Global Jets ETF (JETS) fell 4.1%. United airlines (UAL), the results and guidance hit airline stocks and also other travel-related games.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) fell 0.9% and the ARK Genomics ETF (ARKG) 1.2%, both retreating further from their 21-day and 50-day lines. Roku shares are held in the top five for ARK Investment.
Read the overview every day to stay in sync with the market direction and the top stocks and sectors.
Market rally analysis
Once again, the stock market rally suffered more damage than would be indicated by major indices. The Dow Jones and S&P 500 retreated for a second straight session after looking almost extended at the end of last week. The Nasdaq composite lost more ground, but found support on its 21-day line and above its March lows.
Russell 2000 with low capitalization fell to its lowest level so far this month. That’s after the 1.4% withdrawal on Monday to return below the 50-day line.
The top stocks suffered large losses, with many undercutting of points of purchase or the interruption of the key support. Futu shares fell 23%, collapsing below one point of purchase and its 50-day line after announcing a stock offer late Monday. On Monday, shares rose 16%.
But it was not just a rotation of growth stocks. Commodity-related cycles were also withdrawn, along with retailers, tokens, software, banks, travel and more. Some leaders seem relatively healthy, but a portfolio of “healthy” and “unhealthy” losers is not a winning strategy.
What to do now
To quote Mark Minervini, this was already a “tough” market, even when major indices were rising above. Right now I’m falling.
Investors should naturally reduce their exposure as they run out of stocks. You may want to reduce your losses and consider making a profit for a few winners, especially for those with discolored earnings who are heading for winnings.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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