Stock Indexes Up, But IBD Funds Send Mixed Message

Stock indexes advanced confidently late Wednesday morning, even as two IBD-tied funds flashed varying degrees of optimism.


The Innovator IBD 50 Fund (FFTY), an exchange-traded fund managed by Innovator Capital that reflects the IBD 50, galloped 2.4%. But the Innovator IBD Breakout Opportunities ETF (BOUT) gained only 0.9%.

This divergence confirms what bulls have been seeing lately. As the latest IBD Big Picture column notes, even on strong up days for the indexes, breakouts are scarce.

That was the case Wednesday morning as few stocks broke out in strong volume.

Stock Indexes Up Sharply

In the meantime, the Nasdaq knifed 2.2% higher, while the S&P 500 and the Dow Jones industrial average rose 1.7% and 1.6%, respectively. The small cap Russell 2000 added 1.9%.

Volume was running higher vs. the same time Tuesday.

Former Leaders Stir

The FANG stocks and Apple (AAPL) each rose as they tried to put an end to their slumps. Facebook (FB) ascended 3% in average volume; (AMZN), 3% in 18% faster trade; Netflix (NFLX), 5% in 22% heavier turnover; Alphabet (GOOGL), 2% in slow volume; and Apple, 1.3% in average volume.

The former market leaders have had a tough time in this pressured market.

4 Items For News-Driven Market

The stock market continues to be largely a news-driven market, a characteristic that leaves it vulnerable to changing gusts of news. On Wednesday morning, news stayed in the spotlight.

— Reports based on anonymous sources said that China plans to cut the tax rate on imported U.S.-made cars from 40% to 15%. Neither China nor the U.S. have confirmed the reports, which first surfaced Tuesday. Bulls are hoping that such a development would fire up the stock market.

— British Prime Minister Theresa May faced a no-confidence vote Wednesday that could bring new leadership. May has not been able to find support for a Brexit deal she negotiated with the European Union.

— A potential U.S. government shutdown looms if President Trump and Congress cannot reach an agreement by Dec. 21. Trump has vowed to shut down the government if Congress does not provide funding for a border wall. “I am proud to shut down the government for border security,” Trump said Tuesday in a televised meeting with key Democrats.

— The American Petroleum Institute late Tuesday reported a huge decrease in oil inventories. The trade association said there was a draw of 10.18 million barrels in the week ended Friday vs. estimates for a draw of 2.99 million barrels. But the institute’s data doesn’t always agree with the U.S. Energy Information Administration, and that was the case Wednesday. In a news release this morning. EIA pegged the draw at only 1.2 million barrels.

The price of light sweet crude advanced 2.4% on the API news and then trimmed the gain to 0.1% on the EIA data.


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Originally posted 2019-09-19 23:27:50.


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