Futures contracts: what to do after today’s market drop?

Futures contracts: what to do after today’s market drop?

Futures contracts: what to do after today's market drop?

Dow Jones futures were higher after today’s stock market tumble as major stock indices sold off with heavy losses to new corrective lows. Next, President Joe Biden’s speech on inflation is scheduled for Tuesday.


CarGurus (CARG) and Microchip (MCHP) were the main drivers of earnings after the close. CarGurus shares plunged 13% late. And Microchip stock rebounded nearly 3% in the extended trade.

Elsewhere, the Chinese leader in electric vehicles Li-Auto (LI), Platoon (PTON), Planet Aptitude (PLNT) and Transdigm (TDG) are among the companies reporting on Tuesday morning.

Dow Jones Futures Today: Treasury Yields, Biden Speeches

After Monday’s close, Dow Jones futures were up 0.35% relative to fair value, and S&P 500 futures were also up 0.35%. Nasdaq futures gained 0.4% relative to fair value. Remember that overnight action on futures contracts on Dow and elsewhere does not necessarily translate into actual trading in the next regular trading session.

The 10-year Treasury yield traded as high as 3.13% on Monday, before closing around 3.08%. The 10-year Treasury yield is at its highest level since November 2018. Meanwhile, US oil prices fell nearly 7%, with Texas Intermediate crude trading just above $102 a barrel.

President Biden will deliver a speech on Tuesday, highlighting his attempts to tackle soaring inflation. On Wednesday, the consumer price index for April will be released. According to Econoday, consumer prices should increase by 0.2% in April, against 1.2% in March, the strongest monthly increase in 42 years.

According to Bloomberg, the president plans to detail his legislative efforts ahead of November’s midterm elections. Meanwhile, President Biden’s approval rating is back near February lows.

stock market today

On Monday, the Dow Jones Industrial Average fell 2%, while the S&P 500 fell 3.2%. The tech-heavy Nasdaq composite plunged 4.3%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 3.9% and the SPDR S&P 500 ETF (SPY) fell 3.2% on Monday.

You’re here (TSLA) stock slipped 9.1% on Monday. Dow Jones executives, Apple (AAPL) fell 3.3% and Microsoft (MSFT) was trading down 3.7% in today’s stock market.

Amid a deepening stock market correction, Dow Jones leaders Chevron (CLC) and Merck (MRK) — with Energy Cheniere (LNG) and Exxon Mobil (XOM) – are among the top IBD stocks to watch on Tuesday.

Microsoft and Tesla are IBD stocks. Chevron was featured in this week’s Stocks Near A Buy Zone column.

What to do after today’s stock market crash

On Monday, the Dow Jones, Nasdaq and S&P 500 industrials hit new corrective lows as the stock market plunged. With the market at new corrective lows, all rally attempts are over, which means investors should be on the lookout for a bullish day to signify the start of another rally attempt.

Amid the deepening stock market correction, investors are likely to be mostly, if not entirely, on the sidelines. New purchases are prohibited. Additionally, keeping a watchlist of stocks that hold up well in a bear market is a good way to prepare for the next uptrend in the stock market.

Keep in mind that the top stocks of the past may not be the leaders of the future. To help identify emerging market leaders in a new uptrend in the market, use the relative strength line to see which stocks are outperforming the general market.

During a stock market correction, investors need to identify companies whose stock prices are struggling against the downtrend of the stock market. A strong RS line will point significantly higher, either during the base period or shortly after a breakout.

Monday’s The Big Picture column commented, “The Nasdaq’s 4.3% loss on Monday cemented a three-day losing streak of more than 10%. It’s the biggest three-day drop since March 2020 ( during the pandemic bear market). Its three-day, 1,341-point loss is the largest on record, according to Dow Jones Market Data.”

If you are new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one of the keys to investing guidelines. IBD offers a wide range of growth stock listings, such as Leaderboard and SwingTrader.

Investors can also create watchlists, find companies close to a buy point, or develop custom screens at IBD MarketSmith.

Five Dow Jones stocks to watch now

Dow Jones stocks to watch: Chevron, Merck

Dow Jones leader and energy giant Chevron continues to build a flat base that has a buy point of 174.86, according to IBD MarketSmith’s chart analysis. CVX shares traded down 6.7% on Monday, putting them below their 50-day line.

CVX stock boasts a perfect composite rating of 99 IBD, per IBD stock check. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.

Drug leader Merck is below a cup with the handle’s buy point of 89.58 after a brief breakout attempt last week. Shares fell 0.85% on Monday, ending around 2% below the last entry.

On the positive side, the stock’s relative strength line is reaching new highs, indicating strong stock market outperformance during the current stock market correction.

Three growth stocks to watch in the currentrent Stock market correction

Stocks to watch: Cheniere, Exxon

IBD Leaderboard Cheniere Energy stock is one of the top stocks to watch despite losing 8.6% on Monday. Stocks are carving a flat base that shows a buy point of 149.52, according to chart analysis from IBD MarketSmith.

Energy giant Exxon Mobil topped a cup with the 89.90 buy point of the handle last week. But stocks gave up entry and are around 6% below the buy point after Monday’s 7.9% drop. The shaky breakout illustrates the danger of owning stocks in the current market environment.

Join IBD experts as they analyze the top stocks of the current market correction on IBD Live

Tesla Stock

Tesla stock slipped more than 9% on Monday, extending a three-session losing streak and closing at its lowest level since March 14. Stocks are significantly below their 50- and 200-day moving averages.

The stock traded as high as 1,243.49 on Nov. 4 and is about 37% off that all-time high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares sold 3.3% on Monday. The stock falls below its 200-day long-term line again.

Software leader Microsoft fell 3.7% on Monday, hitting its lowest level since June 2021. Shares are significantly below their 50- and 200-day lines. The stock closed about 24% off its 52-week high.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


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