Dow futures: Market rally nears lows amid Ukraine invasion, Fed rate hike imminent; what should be done

Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market’s bullish bid continues to hold, but the major indices lost significant ground for the second consecutive session as Russia’s invasion of Ukraine continued to rattle markets. The Federal Reserve is set to raise interest rates this coming week as inflation hits a 40-year high.

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It’s time to increase your market exposure in force direction. But at the moment, the market is in a blackout. The major indicators were below their 21-day and 50-week moving averages. The 21-day exponential moving average It was well below the 50-day streak for a long time, with both of them dropping sharply. It all reflects recent and extended market weakness, despite some short developments.

Giant Dow Jones United Health (United nations), Regeneron Pharmaceuticals (Region) And the Harmony in the biological sciences (HRMY) show a relatively positive action. They are all close buy points or early entries with Lines of relative force At or near altitudes.

It’s also no coincidence that all three are medical stocks, relatively isolated from the Ukraine-Russia war and spiraling inflation.

Apple, Tesla stock

Two stocks that do not show positive action? Apple stock and Tesla (TSLA).

an Apple (AAPL), which held up reasonably recently, fell 5.2% to 154.73 last week, its worst weekly loss in just over a year. Shares settled on Friday at their worst close since late November, closing at the 200-day streak.

Tesla stock fell 5.1% last week to 795.35, with all of that coming on Friday. After hitting resistance at the 21-day line, Tesla slipped back below the 200-day line late in the week. While it is still comfortably above its late February lows and has held up better than many of its peers, TSLA stock is not doing well.

Tesla is working IBD Leaderboard. UnitedHealth, Regeneron and HRMY stocks are available in defect 50. UN stock is the topic of the latest New America.

Russia’s invasion of Ukraine

As earnings season approaches, investors will remain focused on Russia’s invasion of Ukraine. Stock markets, oil prices, and more tend to have big moves in the Russian-Ukrainian headlines that often reverse quickly. Dow futures popped Friday morning as Russian President Vladimir Putin signaled a “positive turn” in Ukraine talks, but that optimism quickly faded and turned negative in the regular session.

President Joe Biden has said the United States, the European Union and the Group of Seven will cancel normal trade relations with Russia, paving the way for new tariffs on the invasion of Ukraine.

On Saturday, a senior Russian diplomat said Moscow might target Western ships carrying military aid to Ukraine, saying “it is an act that makes those convoys legitimate targets.” Any such attack would be a massive escalation that could lead to direct NATO attacks on the already struggling Russian army. In practice, those convoys would likely be highly protected and would be difficult to target.

Meanwhile, Ukrainian President Volodymyr Zelensky said on Saturday that Ukrainian and Russian negotiators had begun discussing concrete issues in exchange for ultimatums.

There were unconfirmed reports on Saturday that Ukraine had retaken a key town north of Mariupol, which is besieged in the south. If true, Ukraine could evacuate civilians and/or reinforce troops. It would also be a bad sign for Russian forces.

Germany will stop importing Russian coal by the fall and will cut off most Russian oil imports by the end of the year, the German economy minister said. But cutting Russian gas is more difficult. The United States banned imports of Russian oil last week.

Separately, several missiles landed around a US military base in April in northern Iraq. It is possible that the missiles came from inside Iran.

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Fed rate hike in the future

Federal Reserve policy makers meet on March 15-16. After months of advance warning, Fed Chair Jerome Powell and his colleagues will raise interest rates by a quarter point on Wednesday afternoon, pointing to several Fed rate hikes.

The European Central Bank said last week that it would end asset purchases faster, raising expectations of the European Central Bank to raise interest rates.

Dow jones futures contracts today

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

The Russian stock market will remain closed until the end of next week. It was last traded on February 25, with shares already plummeting due to Russia’s invasion of Ukraine, even before tougher sanctions were imposed. The ruble has depreciated against the dollar and other major currencies since the invasion began.

Remember to work overnight in Dow Jones futures contracts and elsewhere that does not necessarily translate into actual circulation in the next regular session Stock market session.

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stock market rise

The stock market rally had another tough week, as Wednesday’s strong gains had no lasting effect.

The Dow Jones Industrial Average fell 2% last week stock market trading. The S&P 500 fell 2.9%. The Nasdaq Composite tumbled 3.5%. Small-scale Russell 2000 gave up 1%.

The 10-year Treasury yield rose 28 basis points to 2%.

US crude oil futures jumped to an 11-year high, but then sold off, eventually losing 5.5% last week to $109.33 a barrel.

ETFs

between the Best ETFsThe Innovator IBD 50 ETF (fifty) fell 2.9% last week, while the Innovator IBD Breakout Opportunities ETF (fit) decreased 2.2%. iShares Expanded Technology and Software Fund (ETF)IGV) decreased by 5.2%. VanEck Vectors Semiconductor Corporation (SMH) give up 3.7%.

Shares reflect more speculative stories, the ARK Innovation ETF (see you) fell 7.6% last week, hitting a 22-month low. ARKK’s RS streak is now the lowest since late 2017. ARK Genomics ETF (ARKG) down by 4.65%. Tesla stock continues to be the number one stock among Ark Invest ETFs.

SPDR S&P Metals & Mining ETF (XME) down 1.35% last week. Global Infrastructure Development Fund X US (cradle) lost 1%. US Global Gates Foundation (ETF)Planes) down 4.35%. SPDR S&P Homebuilders ETF (XHB) sank 3.3%. SPDR Specific Energy Fund (SPDR ETF)XLE(Up 2.2% and the Financial Select SPDR ETF)XLF) decreased by 2.15%. SPDR Healthcare Sector Selection Fund (XLV) down by 2.7%.

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UnitedHealth stock fell 3.2% last week to 482.87, but found support at the 50-day line. UN stock has double bottom base With a handle, it gives her 500.10 purchase points.

Regeneron stock rose 3.6% to 642.58 last week, after a series of tight weekly closes through 2022. On Friday, REGN stock moved intraday above early entries at 636.46 and 645.10, although it closed below the latter as the market was sold-out to close. . Regeneron has an official purchase point of 673.96 from flat base Within greater consolidation, according to MarketSmith Analysis.

Regeneron’s earnings soared in 2021, buoyed by antiviral Covid treatments. Earnings are expected to decline in 2022, but remain well above pre-2021 levels. REGN’s P/E ratio is just 8.

Harmony Biosciences stock jumped 9% to 43.86 last week, despite falling 3.9% on Friday. HRMY stock briefly liquidated 45.99 cup base Buy pips after sprinting from early entry. But the arrows can form high handles, offering a new entry. After booming earnings growth last year, analysts see earnings per share from Harmony lower in 2022 but expect a strong rebound next year.

Market Rise Analysis

The Russian invasion of Ukraine and the impending hike in the Federal Reserve are not a great backdrop for the market’s progress. But whatever the reason, the technical picture is not looking good, although the stock market’s bullish attempt continues.

Heavy selling on Monday and Tuesday pushed major indexes to approach their February 24th lows. Wednesday brought a strong recovery, although trading volumes are significantly lower than in the previous two sessions. The major indicators have never touched their 10-day moving averages, let alone the 21-day line or any other important resistance levels. Stocks fell on Thursday and especially on Friday, capping another big weekly loss.

Wednesday’s gains now look like a fleeting picture. The best percentage of gains in history tend to come amid corrections and bear markets.

That’s why investors should wait for real signals that the market has changed character via a Follow-up day To confirm the new uptrend. A follow-up day can still happen any day.

However, not all follow-up days are successful, and FTD at current levels will have a large number of warnings.

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Sector winners, losers

Power stocks continue to perform well, although many are extended. Some of the steel and mining plays are all about buying points, but they are subject to significant fluctuations.

There are a number of medical stocks that have been created, including UN Stocks, Harmony Biosciences and Regeneron. Some of the transportation, building materials, and industrial plays also look interesting – fiddling with points of purchase, set-up, or at least set-up. Relative strength lines are at or near consolidation or all-time highs.

Most of these potential formations offer relatively low or modest P/E ratios, which are certainly favorable in 2022. (That’s not a guarantee, as Apple shares have fallen this week despite a modest earnings ratio of 26.)

However, these names will generally struggle to make steady progress – with the exception of Friday’s advance in Regeneron – unless the broader market advances, or at least the trends sideways.

With interest rates rising again, growth stocks and especially high value growth stocks are struggling aggressively. When the market is having a great day, strong growth stocks tend to lead the way. But it also leads to the downside on bad market days. There are more bad days than good days lately.

Tesla’s stock is a relative leader between EV or strong growth overall. But this area of ​​the market is simply not preferred.

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What are you doing now

There is not much to do now. The commodity plays are still doing well, although many are extended. Investors can take some partial profits or let them ride.

If you were ahead of the market and bought stocks, especially growths, on a sudden one-day Wednesday, you might want to exit these positions.

But it’s important to stay engaged and be prepared. Build your own watch lists. There are a lot of potentially interesting stocks.

When the market rally has a day to follow, you’ll want to be prepared. But even then, gradually increase your exposure as the market continues to build strength and overcome major obstacles.

Read The Big Picture Every day to stay in sync with the trend of the market, stocks and leading sectors.

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