Dow Jones Futures: Target Trigger Bearish Sale-Off; Market assembly has 90% probability

Dow Jones futures, including S&P 500 futures and Nasdaq futures, declined modestly overnight amid weak revenue and guidance from Cisco Systems. The stock market rally sold off hard on Wednesday, as a big one Target (TGT) Lack of income has raised major concerns about retailers, the sector and the wider economy amid hot inflation and weak demand.




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Wednesday’s sharp sell-off comes on the heels of key indicators that are setting a follow-through day to ensure new stock market rally, flashing bearish signals.

After closing, Cisco system (CSCO) and Chemical and Mining Society of Chile (SQM), or SQM, reported income. Cisco’s earnings were limited to 3 views in the last fiscal year, but revenue was missed and the networking giant also indicated lower for the current Q4. CSCO stock is down more than 10%. Arista Networks (ANET) and other related stocks also fell sharply.

SQM earnings for playing fertilizer and lithium still have hours after hours left. SQM stock rose 0.4 %% to 90.21 in Wednesday’s regular session after hitting an intra-93.14 intraday, briefly topping a 90.97 by-point.

The video embedded in this article discusses Wednesday market sales and analyzes TGT stocks, Northrop Grumman (NOC) and Broadcom (AVGO).

Bad news for target income retailers

Target revenue fell 41%, much higher than expected. Retailers have blamed shipping costs as well as consumers for moving away from TVs and other consideration items. Target sees margin pressures throughout the current financial year. Came a day later Walmart (WMT) EPS is missed and under-indicated, citing high costs for goods, shipping and labor. At the time, investors may have thought or expected that Walmart’s problems were company-specific, but Target’s results indicate a wider problem.

The target stock fell 25% to 161.61. Walmart sank 6.8% after falling 11.4% on Tuesday. Both are the lowest since 2020.

If Walmart and Target fight in the current economic climate, it may not be good for other discounters and retailers and the general public.

Dollar tree (DLTR) sank 14.4% after slipping 3.2% on Tuesday. DLTR held the stock well, but fell below its 50-day low on Tuesday and crashed into the 200-day line. Costco Wholesale (COST) has lost more than 12%, already after a breakout round-trip and has fallen below the original moving average in recent weeks. Dollar Tree and COST stock report next week.

Good shopping (BBY), which reported early Thursday, fell 10.5% to a two-year low.

Trucking firm, Tesla, Apple stock hits

JB Hunt Transport Services (JBHT) sold 9% from near its 10-week line. As consumer demand weakens, trucking companies may see weaker demand and fight to skyrocket diesel fuel prices.

Apple stock fell 5.6% to 140.82, its lowest in six months, as consumer prudent spending targets added to fears for the Dow Jones Tech Titan. In the last few weeks, the manufacturer Foxconn has signed an agreement with the iPhone Taiwan Semiconductor (TSM), which makes chips Apples (AAPL) and many more, have warned about the need for weaker smartphones. AAPL stock is on track for an eighth consecutive weekly loss.

Tesla’s stock fell 6.8% to 709.81, the lowest level since August. Although theoretically weak consumer prudence could hurt Tesla’s demand for high-priced electric vehicles, overall auto production is so low that supply is still an overriding factor. Tesla Pressure is mounting on the Shanghai plant output problem and CEO Elon Musk’s other ongoing high-value growth names (TSLA) Twitter (TWTR) Takeover Story. Twitter stock fell 3.8% to 36.85, a two-month low and further below the ্ক 54.20 takeover price of the mask.

Also, the S&P 500 ESG index booted Tesla, triggering more angry tweets from Mask, primarily about corporate culture.


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Dow Jones Future Today

Dow Jones futures down 0.2% vs. fair price. S&P 500 futures down 0.2%. Nasdaq 100 futures fell 0.35%. Cisco stock is a Dow Jones, S&P 500 and Nasdaq component. Several other networking and hardware stocks also lost ground.

Keep in mind that overnight action in Dow Futures and elsewhere does not necessarily translate into actual trading at the next regular stock market session.


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Stock market rally

Stock market realities have plummeted and continued to fall on Wednesday.

The Dow Jones Industrial Average fell 3.6% in Wednesday’s stock market trading. The S&P 500 index is down 4%. The Nasdaq composite fell 4.7%. Small-cap Russell 2000 dropped 3.5%.

US crude oil prices fell 2.5% to 9 109.59 a barrel. Gasoline futures fell more than 5%.

The 10-year Treasury yield fell 8 basis points to 2.89%.

Among the best ETFs, inventor IBD 50 ETF (FFTY) skidded 3.8%, while inventor IBD Breakout Opportunities ETF (BOUT) lost 3.9%. iShares Extended Tech-Software Sector ETF (IGV) dropped 4%. Vanek vector semiconductor ETF (SMH) decreased by 4.8%.

SPDR S&P Metals & Mining ETF (XME) is down 4.15% and Global X US Infrastructure Development ETF (PAVE) is down 3.6%. US Global Jets ETF (JTS) is down 3.4%. SPDR S&P Homebuilders ETF (XHB) decreased by 5.5%. Energy Select SPDR ETF (XLE) and Financial Select SPDR ETF (XLF) lost 2.75%. Healthcare Select Sector SPDR Fund (XLV) decreased by 2.6%

The SPDR S&P retail ETF, which includes target stocks and Walmart key components, is down 8.3%, the lowest since December 2020.

Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) fell 4.4% and ARK Genomics ETF (ARKG) 4.7%. TSLA Stock Arc Invest remains the No. 1 holding throughout the ETF.


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Market assembly analysis

When you get a brand new car, you shouldn’t expect too much trouble driving too much. But if you do, you may have a lemon. On Tuesday, major indicators staged a follow-through day, confirming the rally of new stock markets.

But on Wednesday, the main indicators broke, leaving all the strong gains of Tuesday and much more.

Rising costs for a vulnerable consumer and business is a terrible combination for retailers and discreet product makers. Consumers spend more than two-thirds of the U.S. economy, increasing the risk of economic hard landings as the Fed seeks to reduce inflation. Aggressive Fed rate hikes will cause severe pain. But the alternative, letting inflation stay high, is clearly affecting demand as well.

Putting aside the reasons for the sale, the technical step is clear. Not every follow-through day works, and Wednesday’s action was a bearish signal.

Major indicators closed below their FTD lows. Eric Krul, co-author of “The Lifecycle Trade”, says his research shows that when key indicators do this, there is a 90% chance that the market rally will eventually fail.

In this case the chances are even worse. The Dow Jones and S&P 500 mimicked the new 52-week closing low on Wednesday, with Nasdaq not too far away.

However, the market rally is still in force until the major indicators lower their rally start, in this case the May 12 intraday low. Dow Jones in particular is downward. Another leg down for the S&P 500 will almost certainly push the benchmark index into a bear market, joining Nasdaq.

See a weekly chart of key indicators, and the assembly is hard to see. The Dow, S&P 500 and Nasdaq are on the verge of extending the long losing streak.


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What to do now

It is a good idea to set foot in the newly confirmed stock market rally due to the closure of sales on Wednesday. This was especially true in the case of current market assemblies, with key indicators below the original moving average and a few stock positions.

Investors who bought stocks or ETFs on Wednesday’s FTD should be scaled out.

Keep working on your watchlist. Focus on stocks with strong relative strength. But a strong RS line is not a green light to buy a stock, especially in a weak market.

DLTR stocks stopped selling on Wednesday – and Apple has been up for weeks – showing how stocks can hold well until they are gone. So wait until a stock signals a strong market buy, and get ready to exit.

Read The Big Picture every day to stay in tune with market trends and leading stocks and sectors.

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

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