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Dow Jones Futures: 47 Reasons To Worry About The Stock Market Rally

Dow Jones futures rose modestly late Thursday, along with S&P 500 futures and Nasdaq futures. In Thursday’s stock market trading, the Dow Jones fell 0.75% and the S&P 500 index 0.8%. The Nasdaq composite skidded 1.8%, closing below its 50-day line for the first time since July 30. Apple (AAPL) and FANG stocks Facebook (FB), Amazon.com (AMZN), Netflix (NFLX) and Google-parent Alphabet (GOOGL) all suffered losses, with Amazon stock falling below its 50-day line. Meanwhile, 47 stocks in the IBD 50 list, including Apple stock, fell on Thursday, with many breaking below buy points or other key technical levels. Finally, Tesla CEO Elon Musk roiled Tesla stock late with his latest tweets.




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Why The IBD 50 Stock List Matters

To understand the market direction, investors should pay attention to the action of the Dow Jones and other major stock indexes. But it’s also important to keep an eye on leading stocks. If leading stocks are falling below buy points and breaking support, that’s not a good sign for a stock market uptrend.

Apple stock fell 1.8%, but in average volume and from Wednesday’s all-time high, so its chart looks fine. But Adobe Systems (ADBE) fell below its buy point, while Grubhub (GRUB) and Paycom (PAYC) undercut their 50-day lines. And they were not alone.

The Innovator IBD 50 ETF (FFTY), based on the IBD 50 list, tumbled 2.7% on Thursday, undercutting its 50-day line. (Innovator pays Investor’s Business Daily revenue based on assets under management for the FFTY ETF.)

Amazon, Other FANG Stocks Struggle

As for FANG stocks, Amazon stock slid 2.2% to below its 50-day line for the first time since late April. Netflix skidded 3.55%, but is still above its 50-day line in a cup base. Google stock lost 2.8% after hitting 50-day line resistance earlier in the week. Facebook stock fell 2.2% to its worst level since April 25.

Dow Jones Futures Today

Dow Jones futures rose 0.25% vs. fair value. S&P 500 futures climbed 0.25%. Nasdaq 100 futures advanced 0.2%. Remember that action in Dow futures and Tesla stock doesn’t necessarily translate in actual trading in the next regular session.

Elon Musk Tweet Hits Tesla Stock

Tesla CEO Elon Musk may be stepping down as chairman for at least three years, but he’s not going to stay quiet. After the market close, he took an apparent swipe at the Securities and Exchange Commission.

Musk, responding to someone questioning why he would try to anger the SEC, was unapologetic. “Why would they be upset about their mission? It’s what they do,” he tweeted.

Musk later tweeted that short selling “should be illegal.”

Investors apparently thought that mocking the stock market watchdog on Twitter regarding a tentative settlement over his go-private, effort, including his “funding secured” tweet. Many suspect Musk was lashing out against short sellers when he made the week. Earlier on Thursday, after a judge asked Tesla and the SEC to justify their settlement.

Tesla stock fell 2.3% in active extended trading.

Shares closed down 4.4% to 281.83 on Thursday. Shares have already given back most of Monday’s 17% spike on the SEC settlement. That followed a 14% dive last Friday on the SEC suit vs. Elon Musk.

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