Dow Jones' futures plummeted early Wednesday, as well as the future of the S&P 500 and the future of Nasdaq, as Treasury production continued to rise sharply. The stock market meeting was postponed and Treasury yields jumped on Tuesday as the top Fed policymaker called for a “immediate” reduction of the Federal Reserve's large balance sheet.
Solar power company SolarEdge Technologies (SEDGSEDG) and uranium ETFs North Shore Global Uranium (URNM) and Global X Uranium (URA) brightened up buy signals on Tuesday morning, but gains added or slowed down as broader markets shrunk.
UnitedHealth (UNH) and Eli Lilly (LLY) are rising among the shopping malls.
As for megacaps, Apple stock, Tesla (TSLA), Microsoft (MSFT) and Google parent Alphabet (GOOGL) were all withdrawn on Tuesday, though the charts look good. Tesla stock has fallen into the trendline trend, but could use a decent break after a quick run. Apple (AAPL) is immersed under the shopping spree, but now it has the right handle, which gives it a new shopping experience. Microsoft and Google stock also now have new deals and purchases on their daily charts.
Musk Joins Twitter Board, Steals Trump Thunder
Meanwhile, Twitter (TWTR) gaped over its 200-day line Tuesday morning to 54.57 with news that Tesla CEO Elon Musk would join the social media board. The average profit of TWTR was 2% to 50.98. Twitter stocks rose 27% on Monday as Musk unveiled a 9.2% stake, which was initially described as "doing nothing."
Musk's move on Twitter seems to be stealing Donald Trump's popularity as his Social Truth platform faces challenges. Digital World Acceptance Corp. (DWAC), SPAC's merger with partner and Truth Social parent Trump Media and Entertainment, dropped 16% to 48 on Tuesday, dropping to the lowest level since early December. DWAC stock fell 10% on Monday.
Trump's social media platform The Truth Social is plagued by technical problems, as senior technology executives leave Monday. App downloads dropped. Also, Former President Trump has never posted on his site, removing the value-added Truth Social against Twitter and Facebook (FB).
In total, DWAC stock has lost more than half of its value since reaching 101.87 on March 2.
TWTR and DWAC stocks declined slightly earlier in Wednesday.
Fed's Brainard Wants 'Rapid' Balance Sheet Cut
Gov. Lael Brainard said on Tuesday he wants the big bank to start lowering its large balance soon and "faster." Brainard, who has been appointed Fed Vice Chairman, added, "I expect the balance sheet to decline much faster than during the previous recovery."
Fed official Jerome Powell has long signed off that policymakers will begin to reduce their sheet, but Brainard's comments have signed off soon.
San Francisco Fed President Mary Daly has also signed in support of the Fed's aggressive action. Both are like pigeons, but by 2022 there are no Fed pigeons. Despite the reduction in the balance sheet, markets have been making inflation expectations for the increase in the point of each point in each of the next three meetings.
On Tuesday, Finance Minister Esther George said a 50-point increase was an option for an early May meeting.
Treasury yields have risen to the latest Fed hawkish signal, with a 10-year yield going back more than a two-year yield.
On Wednesday, the Federal Reserve will release minutes at its March policy meeting.
Dow Jones Futures Today
The future of the Dow Jones is down 0.7% compared to fair value. The future of the S&P 500 fell by 0.9% and the future of the Nasdaq 100 dropped by 1.5%.
The Dow Jones is likely to lower its 21-day moving average and test its 50-day line. The S&P 500 could test its 21-day and 200-day lines, with Nasdaq back to its 21-day line.
Treasury's 10-year yield exceeded 6 points to 2.62%, reaching a maximum of three years.
Prices for U.S. crude oil increased by just over 1%.
Keep in mind that the night action in Dow futures and elsewhere does not translate into real trading in the next stock market.
Stock Market Rally
The stock market rally retreated Tuesday, closing near session lows. The Dow Jones Industrial Average sank 0.8% in Tuesday's stock market trading. The S&P 500 index retreated 1.3%. The Nasdaq composite tumbled 2.3%. The small-cap Russell 2000 also lost 2.3%.
U.S. crude oil prices opened higher but reversed lower for a 1.3% decline to $101.96 a barrel. Natural gas futures jumped nearly 6%. The European Union is moving toward banning Russian coal imports, but isn't going after Russian crude or natural gas.
The 10-year Treasury yield rose 14 basis points to 2.56% on Brainard's hawkish balance sheet comments. The two-year yield popped 7 basis points to 2.5%, but that means the yield curve is no longer inverted.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) skidded 3.75%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 1.7%. The iShares Expanded Tech-Software Sector ETF (IGV) gave up 2.5%, with Microsoft stock a major IGV holding. The VanEck Vectors Semiconductor ETF (SMH) sold off 4.3%.
SPDR S&P Metals & Mining ETF (XME) reversed lower for a 2.4% decline. The Global X U.S. Infrastructure Development ETF (PAVE) gave up 1.8%. U.S. Global Jets ETF (JETS) descended 1.1%. SPDR S&P Homebuilders ETF (XHB) lost 2.1%. The Energy Select SPDR ETF (XLE) turned lower for a 1.6% decline. The Financial Select SPDR ETF (XLF) edged down 0.6%. The Health Care Select Sector SPDR Fund (XLV) inched up 0.2%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) tumbled 5.6%, back below its 50-day line. ARK Genomics ETF (ARKG) sold off 5.3%, just holding the 50-day. Tesla stock remains the No. 1 holding across Ark Invest's ETFs.
Apple Stock
Apple stock fell 1.9% to 175.06, dropping back below a 176.75 double-bottom buy point. But AAPL stock now has formed a handle on a daily chart, giving it a 179.71 buy point. Strictly speaking, the iPhone giant had a handle on a weekly chart after last week, but it was wafer thin. With the daily handle carved, investors should probably focus on that entry.
The relative strength line for Apple stock is right at a new high.
Shares sank more than 1% before the opening bell.
Microsoft Stock
MSFT stock sank 1.3% to 310.88. The software and cloud-computing giant now has a handle with a 316.05 buy point. The midpoint of the handle is just above the midpoint of the base, so there is some overhead resistance.
Microsoft stock fell 2% in premarket action.
Google Stock
Google stocks fell 1.7% to 2,811.82. That gives GOOGL stock a handle on its cup base on a daily chart with a purchase point of 2,875.95. The internet giant had a handle on its weekly chart with the same text, as Apple, although Google was more powerful. The Google stock RS line is not far from the top, but has been moving away since the end of July.
GOOGL stock decreased by 2% before opening.
Stock costs SEDG
SolarEdge stocks rose to 344.61, but fell to 2% to 328.69. The Intraday stock SEDG cleared a 335.67 cup holder stock market again, according to MarketSmith. There is no doubt that the solar energy company has a great deal of intraday fluctuations. Investors can consider starting a position in SEDG stocks if they once again receive support with a 21-day moving average.
Shares fell 2% on Wednesday morning.
Tesla Stock
TSLA stock fell 4.7% to 1,091.26 on Tuesday after a 5.6% jump on Monday following Q1 record delivery figures. The Tesla stock has a 1,208.10 cup shopping mall. Intraday, shares reached 1,152.87, a three-month high and just crossed the shallow trend line. After a sharp rise since March 14, Tesla's stock could use a real break, with a large handle that moves some of the weakest participants.
Tesla Shanghai has been closed since March 28, as the city continues to be tightly closed as Covid charges rise there. That may affect production and especially more delivery in Q2 than in Q1. While Berlin and Austin are building Model Y crossovers now, the output is much lower.
TSLA stock fell more than 2% on Wednesday morning.
Market Rally Analysis
The stock market rally pulled back Tuesday, with hefty losses among tech and small-cap names.
The major indexes appear to be forming handles after a big run-up. The Dow, S&P 500 and Nasdaq seem to be acting normally, so far, but that could quickly change. If the S&P 500 and Nasdaq decisively under their 21-day moving averages, that would be more concerning. The Dow Jones is slightly above its 21-day line, with the 50-day just below that.
But there is notable weakness beneath the surface.
Tech stocks are looking weak. Yes, Apple stock is setting up near record highs. Microsoft and GOOGL stock are close to buy points, though both haven't made any progress over the last several months.
Meanwhile, chip stocks have been plunging amid reports of weaker demand for PCs and consumer electronics. Software and other highly valued growth names are getting hammered due to rising Treasury yields. Tesla is one of the only triple-digit P-E stocks that has been thriving, a distinction that's both impressive and worrisome.
Shipping stocks also are weak. Truck, train and other "land" shippers continue to sell off, while oceangoing container and dry bulk shippers also are now also losing ground.
Strong Sectors
On the upside, energy and commodities continue to do well, whether it's oil and gas plays, coal miners, solar stocks or uranium ETFs. But they are prone to big intraday swings and reversals from highs, as URNM and SEDG stock showed Tuesday.
Defense stocks such as Lockheed Martin (LMT) are consolidating after spiking early on in Russia's Ukraine invasion.
Medical stocks are quietly doing very well, offering defensive growth, often with low-to-modest P-E ratios. Those include health insurers such as UNH stock as well as drugmakers like LLY stock. Edwards Lifesciences (EW) and Shockwave Medical (SWAV) are working on the right side of bases. AbbVie (ABBV) has steadily advanced for months, though it's well extended.
Insurance stocks such as AIG (AIG) are hanging around buy points. Insurers can do well in a rising rate environment and aren't particularly concerned about the yield curve.
Property storage REITs are doing well, despite the rising rates. Warehouse operator Prologis (PLD) is in a buy zone. Extra Space Storage (EXR) is among those carving possible handles on new bases.
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