Dow Jones Futures: Market Rally Faces Big Test; Apple Leads 4 Dow Stocks In Focus

Dow Jones futures fell slightly on Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally held support levels last week. Could the S&P 500 break above its 200-day moving average in the coming days and weeks? apple (AAPL) may be the original.


Apple stock was at key levels and rose modestly despite the overall market generally retreating. Like the S&P 500, the iPhone tech titan is heading back toward its 200-day line. A decisive move above that level could provide a buying opportunity. But another decline could offer another opportunity for AAPL stock.

Meanwhile, fellow Dow Jones constituents Boeing (B.A), JP Morgan Chase (JPM) and GS stocks have quietly been on significant runs over the past few weeks, contributing to the Dow’s outperforming in the current market rally. BA stock is technically near a traditional buy point. Goldman Sachs ( GS ) is building a deep base while the JPM stock still has work to do.

Dow Jones futures today

Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures fell 0.1%. Nasdaq 100 futures were flat.

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

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Stock market rally analysis

Last week, the Dow Jones Industrial Average rose less than 0.1% in the last week’s stock market trading. The S&P 500 index fell 0.7% and the Nasdaq Composite lost 1.5%. The small-cap Russell 2000 gave up 1.75%.

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On Tuesday, November 15, the S&P 500 briefly rose above 4,000, close to the 200-day moving average. This level is particularly important because the benchmark index fell just 1 point back from the 200-day line on August 16, triggering another leg into the bear market.

A decisive move above the 200-day line, which would roughly coincide with a falling-tops trendline from the Jan. 4 all-time high, would be a strong signal that the uptrend is more than a bear market rally.

The S&P 500 clearing the 200-day line would also be a positive scenario for leading stocks, which are struggling near buy points in a bearish market.

Meanwhile, the Russell 2000 dipped below its 200-day line last week but will likely recover that level before the S&P 500 does. The Dow Jones is comfortably above the 200-day, buoyed by Boeing, Goldman and JPM stocks. But clearing last week’s highs would send the Dow back to 34,000 and below its August high.

The Nasdaq, weighed down by aggressive growth, is 8.3% below its 200-day line. A move above last week’s highs would be a good first step. Also a positive: The 21-day moving average climbed above the 50-day line on Friday.

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Thanksgiving week isn’t necessarily a great time to make a big market move. Markets will be closed on Thanksgiving with a half-day session on Friday. Volume will likely lighten throughout the week. The following week ended with a bang. On December 1, investors will get October’s PCE inflation data along with the ISM’s November manufacturing index. The November jobs report is due on December 2. The news could have a big impact on Fed rate hike expectations, bond yields and stock prices.

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So it wouldn’t be surprising to see the major indices trading up over the next week or so. There’s nothing wrong with a little consolidation for major indexes and leading stocks.

Apple stock

Apple stock rose 1.1% last week to 151.29, after rising 8.2% the previous week. Shares held their 50-day moving average, with the 21-day line set to break above the 50-day. AAPL stock is just below its 200-day line. The Dow giant flirted with its 200-day following Oct. 28 earnings. But it turned out to be a great opportunity to short, with shares falling to their worst close since mid-June.

A decisive move above the 200-day line, possibly clearing the Oct. 28 high of 157.50, would offer early entry into a bottoming base starting on Aug. 17. But if Apple stock falls short of that area, it could provide a new shorting opportunity.

Apple’s success or failure at the 200-day line could be key to the S&P 500’s own efforts, and vice versa.

Boeing stock

BA stock fell 2% to 173.89, after a 47% run over five weeks. Although the Dow Jones aerospace giant reversed on lower earnings on Oct. 26, shares have bounced back, notably on a bullish cash-flow guidance a few days later.

Technically, Boeing stock is just below the 173.95 cup-basis buy point. But shares are 9.5% above their 200-day line and 19.5% above their 50-day. A break around current levels can create a safe buying opportunity.

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Boeing is expected to turn a profit in 2023, ending four years of losses.

Goldman Stock

GS stock fell 1.55% last week to 379.20. On a daily chart, shares extend into a much larger consolidation from a 358.72 cup-base buy point. On the weekly chart, Goldman stock has a 389.68 buy point from a year-long cup-with-handle base, according to MarketSmith’s analysis. But after a four-week winning streak of 28%, that’s an awfully small handle. A long, deep handle would be helpful and let the 50-day line close the gap.

The relative strength line is at a four-year high, reflecting the S&P 500 versus Goldman Stock’s outperformance. The RS line is the blue line in the given chart.

JPM Stock

JPMorgan stock fell 1.1% last week to 133.84. This followed a 29.5% advance in six weeks. Shares are above their 50-day and 200-day lines, but have work to do JPM stock could form a long, deep consolidation to the right or it could form a bottom base.

Read The Big Picture daily to stay in tune with market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.

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