Dow Jones futures rose Sunday night, along with S&P 500 futures and Nasdaq futures. Black Friday online sales were strong, signaling brisk demand for Amazon.com (AMZN) and other sites as holiday promotions woo shoppers. Investors might be tempted to snap up Wall Street discounts, with Amazon stock 20% off highs, Apple (AAPL) 26% off, Boeing (BA) down 20%, Facebook (FB) 39% and Nvidia (NVDA) 50% off its Oct. 2 peak. But trying to guess where Apple stock, Facebook stock, Nvidia stock or the stock market will bottom is like trying to catch a falling knife.
Risks are high that a stock will keeping falling, leaving you with big losses. Even if you guess correctly when, say, the Dow Jones or Nvidia stock bottoms, your reward could be a laggard in the next stock market rally.
Dow Jones Futures Today
Dow Jones futures rose 0.4% vs. fair value. S&P 500 futures were up 0.4% vs. fair value. Nasdaq 100 futures climbed 0.6%. Remember that Dow futures and other overnight action don’t necessarily translate in actual trading in the next regular stock market session.
Stock Market Correction
Wall Street starts Monday on Day 3 of a rally attempt within a stock market correction. But it’s not an encouraging rally so far. The S&P 500 index and Nasdaq rose modestly Wednesday, but faltered Friday. The Dow Jones hasn’t even started a rally. It’s less than 1% off its October lows.
But stay engaged. The stock market could have a follow-through day this week to confirm a new uptrend. Keep updating your watch list as new stocks flex strength and others drop off. Several medical stocks and groups are looking strong now. Dow Jones stocks Apple and Boeing stock are examples of names that had looked relatively strong until the last few weeks.
Apple Stock
Apple stock looked like the best big-cap tech stock on its Nov. 1 earnings, closing back above its 50-day line not far from recent highs. Its relative strength line, which tracks a stock’s performance vs. the S&P 500 index, was almost at record highs.
But shares plunged on a weak holiday sales forecast, falling 9.3% over the next two sessions. Then Apple stock bounced back for two days, including a 3% pop on Nov. 7. That was when that the stock market confirmed a new uptrend, so you might think Apple had bottomed. But shares then tumbled for five straight sessions, through their 200-day line and undermining the market uptrend. Then Apple stock rallied for two days again, nearly retaking its 200-day. Was that the bottom? Nope. Shares sold off all last week, plunging 11% to a six-month low.
Boeing Stock
Like fellow Dow Jones stock Apple, Boeing held up relatively well in October. On Nov. 7, the follow-through day, Boeing stock was above its 50-day line, near record highs. But shares have now fallen for 11 straight sessions, tumbling to their worst levels since early January. Along with stock market correction lows, Boeing is dealing with fallout from the deadly Lion Air crash and its safety disclosures over the new 737 Max variants.
Facebook Stock
After a February-March sell-off that included a stock market correction, Facebook stock rebounded for four months, but in low volume. After Facebook warned of weaker growth and higher costs after its Q2 earnings report on July 25, shares crashed 19% the next day. Soon Facebook stock rallied to back above its 200-day, but anybody thinking it was a bargain got a rude awakening. Since early August, shares have been in a sharp downtrend. Facebook stock has had a few multi-day gains — including a two-day, 4.8% two-day bounce after Q3 earnings — but nothing sustained. With growth concerns continuing and Facebook under more fire for its practices, shares hit 21-month lows last week.
Amazon Stock
Amazon stock peaked on Sept. 4, but didn’t fall much until October, when the stock market correction began. Shares tumbled after Amazon gave a weak holiday sales outlook, but then rebounded from late October. With the stock market rally also picking up momentum, Amazon might have looked like an Amazon Prime flash sale. But as the stock market retreated, Amazon stock was a big loser, undercutting its October lows.
Nvidia Stock
With the stock market correction about to get underway, Nvidia stock hit a new high Oct. 2 after rebounding from its 50-day. The graphics chip maker then fell much further than the broader stock market. At the end of October, shares rebounded, but lost steam before the new market rally. Then on Nov. 15, Nvidia gave a stunningly weak sales forecast. Nvidia stock crashed 19% on Nov. 16 and 12% on the following session. Shares are trading at 18-month lows.
Nvidia stock, along with Apple, Amazon, Facebook and Boeing stock, may rebound next week or next year. But wait until they set up in proper bases and break out past buy points, in confirmed stock market uptrend. You won’t get the cheapest price, but buying top stocks on breakouts provides the best odds that they will rise, and rise quickly.
