In the early hours before Tuesday's stock market open, Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, showed a slightly downward trend. This movement set the stage for the day's trading activities.
Unraveling the Intricacies of Stock Market Futures
Nasdaq Futures and Their Impact
Nasdaq took a significant step by reaching 20,000, but it did so on poor breadth. This indicates a potential imbalance in the market. Amphenol, Dutch Bros, and CrowdStrike came into focus as key players in this context. Nvidia (NVDA), a major player in the tech sector, sold off by 1.7%, hitting its lowest level since Oct. 15. This triggered the 7% loss rule below a 140.76 buy point, sending a sell signal and raising concerns about the stock's behavior after its mid-October breakout. Shares also closed further below their 50-day line, a crucial level to monitor. Nvidia stock then moved 0.6% lower in extended trading on Monday.Meanwhile, Nvidia chipmaker Taiwan Semiconductor Manufacturing (TSM) closed within striking distance of a 205.63 cup-with-handle buy point. Shares inched higher late Monday, showing some signs of recovery.Stock Market Today's Performance
On Monday, the Dow Jones Industrial Average declined by 0.3%, while the S&P 500 climbed 0.4% and the Nasdaq advanced 1.2% to hit another record high. The suspense over whether the Fed would cut its key interest rate was quickly resolved with last week's consumer price index and producer price index reports for November. A quarter-point rate cut is now almost certain. However, the suspense remains about what the Fed might signal for 2025. The Fed's new set of quarterly projections, to be released with the policy statement on Wednesday, might only suggest a half-point in cuts, bringing the range to 3.75% to 4%.Before this important meeting, November's retail sales are expected to be released on Tuesday, with an estimated rise of 0.4% overall and 0.5% excluding autos, according to FactSet. Personal income and outlays, due on Friday, will include November's update of the core personal consumption expenditures price index, the Fed's key inflation rate.Elsewhere, notable earnings reports this week include Darden Restaurants (DRI), Nike (NKE), FedEx (FDX), Micron Technology (MU), and Carnival (CCL).Cracks in Nvidia's AI Armor and Investor Strategies
The recent sell-off in Nvidia raises questions about its position in the market. With top funds placing their bets elsewhere, investors need to carefully consider their strategies. It's important to monitor positions that deviate from the norm and sell stocks that trigger sell rules.An essential resource for daily breakouts is IBD MarketSurge's "Breaking Out Today" list, which shows MarketSurge Growth 250 stocks breaking out past buy points. The MarketSurge "Near Pivot" list also highlights stocks nearing buy points in bases.To find more stock ideas, check IBD Stock Lists like IBD 50, Big Cap 20, and Stocks Near A Buy Zone. These features help identify bullish patterns and buy points, providing valuable insights for investors.Be sure to follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
