Along with S&P 500 futures and Nasdaq futures, Dow Jones futures edged lower after hours, heading into the final trading day of 2022. Major indices rose strongly on Thursday based on jobs data. Apple (AAPL) iPhone news and Tesla (D.S.L.A) bounces continuously.
But the market is in a correction after breaking key levels on Wednesday. Thursday marked a day in a new stock market rally attempt. Investors should be very careful in taking new positions.
Medbase (MEDP) flashed a buy signal on Thursday KLA Corporation (Clutch), Starbucks (Sex), United Rentals (URI), Mobile (MBLY), Super Micro Computer (SMCI) and flour (FLR) set up. But these stocks rise or fall with the market.
Meanwhile, new Treasury Department guidance says many Model Y vehicles won’t qualify for U.S. tax credits without drastic price cuts starting Jan. 1. But there is a loophole that allows all Tesla vehicles — and any EVs — to qualify for higher tax breaks at any price.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures fell 0.2%. Nasdaq 100 futures fell 0.1%.
Market rally attempt
The stock market had a strong rebound, running in the morning and holding onto those gains in the afternoon.
The Dow Jones Industrial Average rose just 1% on Thursday Stock market trading. The S&P 500 index rose 1.75%. The Nasdaq Composite and the small-cap Russell 2000 rose 2.6%.
In the week ended December 24, initial jobless claims rose slightly more than expected, but remained below 225,000. Concurrent claims rose by 41,000 to 1.71 million in the latest week, the highest since early February.
AAPL shares rose 2.8% to 129.61 following another report of the latest iPhone launch woes, according to The Wall Street Journal, and Apple’s iPhone production is ramping up again.
U.S. crude oil prices were down 0.7% at $78.40 a barrel.
The 10-year Treasury yield fell 5 basis points to 3.83%.
in the middle Best ETFsInnovator IBD 50 ETF (FFTY) rose 1.1%, while the Innovator IBD Breakout Opportunities ETF (Botrose 0.9%. The iShares Broadened Technology-Software Sector ETF (IGV) rose 3%. VanEck Vectors Semiconductor ETF (SMH) rose by 3.3%. Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) rose 5.2% and the ARK Genomics ETF (ARKG) 4.1% Tesla shares are the dominant holding across Arc Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) advanced 1.9%. US Global Jets ETF (JETS) up 2.65%. SPDR S&P Homebuilders ETF (XHB2.4% up. Energy Select SPDR ETF (XLE) was over 1% and the Financial Select SPDR ETF (451.4% up. Health Care Select Sector SPDR Fund (XLVrose 1.1%.
Tesla shares rose 8.1% to 121.82, following Wednesday’s 3.3% bounce. Shares of DSLA are still down slightly on the week and down 37% in December. After such a big selloff, Tesla stock is due for a bounce, but remains below key levels.
Tesla Model Y tax credits
Tesla’s bull case for 2023 relies heavily on new U.S. tax credits of up to $7,500 under the Inflation Reduction Act to boost high-margin domestic sales, offset weak demand and prices in China and Europe.
On Thursday, the Treasury Department listed the vehicles that qualify for US EV credits. Most versions of the Model Y have a price threshold of $55,000 to receive EV credits, versus an $80,000 cap for SUVs, pickup trucks and vans.
But seven-seat Model Y vehicles that aren’t big sellers qualify for up to $80,000.
With the current base Model Y starting at $65,990 in the U.S., Tesla will need to lower the price, perhaps by reintroducing the lower-range Model Y SR+ to get tax breaks — unless it’s a seven-seat variant.
But, another twist! Treasury also said EVs leased by consumers may qualify for commercial EV tax credits. This makes EVs assembled outside of North America eligible, including the Hyundai Ioniq 5 and Kia EV6. Foreign automakers and US allies in Europe and Asia strongly opposed the North American Federation requirement. But the lease rules allow any electric vehicle at any price to qualify, with no income limits.
It will be interesting to see what Tesla and other automakers do with variations and pricing to maximize the benefits of the new tax credits.
But investors were pleased with the overall picture.
TSLA shares soared.
Stocks near buy points
Medbase stock rose 3.4% to 215.62, breaking a downtrend line while rebounding from its 21-day and 50-day line. MEDP stock has consolidated well, forming a 16%-deep rally on top of a long, deep base. Officer Point to buy 235, but Jupiter provided the initial entry.
KLAC stock rose 3.3% from its 10-week line to 379.86. A move above the 21-day line may present an opportunity to buy KLAC shares as a long-term leader.
SBUX stock rose 1.2% to 99.77, rebounding from its 10-week high and breaking above its 21-day high. It can be an initial entry on a short-base basis. That’s considered a handle on a 17-month deep consolidation for Starbucks stock.
URI stock advanced 1.2% to 356.21, rebounding from a 21-day streak. United Rentals is nearing a 368.04 handle buy point at its 13-month consolidation, briefly topped earlier this month. URI stock has traded very tightly on its handle. The Relative strength line United Rentals shares outperformed and the S&P 500 index hit new highs.
MBLY stock rose 2.8% to 34.51, recovering from an intraday undercut of its 21-day moving average. The Mobileye IPO went public at the end of October at 21 per share. MBLY stock has shown strength in a weak market but like many new IPOs has had big whipsaw moves. Stocks are starting to calm down. An aggressive investor may look for a trendline break for an entry, but the mobile stock will make a new base.
FLR stock was up 0.8% at 34.95, continuing to trade tight and likely performing. Flat baseit is a Base-on-base method. Fluor’s earnings rise 80% in 2023 as infrastructure stocks show strength in public and private projects.
SMCI stock rose 1.6% to 81.91, rebounding from the 50-day line but meeting 21-day resistance. A strong move above the 21-day, clearing Wednesday’s high of 84.35, could provide an early entry. One of the strongest growth stocks of 2022, Super Microcomputer stock has been consolidating for several weeks after breaking the earnings gap on Nov. 2, advancing to 95.22 on Nov. 25. Next weekend.
There was a solid recovery in the stock market after Wednesday’s sell-off. Dec. After falling from 13 intraday highs, the major indices are definitely “charging” for a bounce.
The question is whether they will follow through in the coming days and weeks.
The market moved into a correction on Wednesday as the Dow Jones broke below its 50-day moving average and the Nasdaq set a two-year closing low.
So Thursday is a day to try a new market rally. It takes a lot more than that to feel more confident.
The Dow Jones is back above its 50-day line, but still below its 21-day line.
The S&P 500 is still below its 50-day, its 200-day line and further resistance at the December highs.
Shares of Tesla, Apple and several other beat-down chip and software names led Thursday’s bounce, with some leading stocks flashing buy signals or moving into position, such as MEDP stock.
What to do now
It is tempting to go back into the market when indices rise sharply and there is a sea of green in leading and significant stocks.
But Oct. From the bear market bottom on the 13th, breakouts and buy signals were largely inactive.
Certain sectors, including industrials, metals and medicals, have performed well in recent weeks, so it’s easy to justify nipping at these sectors with specific stock or sector ETFs. But keep any exposure small to make quick profits and minimize losses.
Bottom line: This is a market correction. Don’t operate under bull market rules, especially 2020-esque Mad Bull rules.
Invest like you’re driving on an icy, windy road, not the open highway. Proceed carefully or wait on the side of the road.
Now is the time to plan your trip. Work on watch lists. Stocks from various sectors are showing strength.
According to Big picture Each day should be in sync with the direction of the market and the leading stocks and sectors.
Follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.
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