Dow Jones Futures Fall: Nasdaq Extends Losing Streak, Enphase Shines; Apple

Dow Jones futures fell modestly overnight, along with S&P 500 futures and Nasdaq futures, with an Apple iPhone event in focus Wednesday. The ailing stock market rally lost more ground as Treasury yields spiked.

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The major indexes fell further from their 50-day moving averages. The Nasdaq, extending its losing streak to seven days, undercut its late June lows intraday.

It’s not a good time to be adding exposure, but investors should look for stocks with strong relative strength. Enphase Energy (ENPH), Ulta Beauty (ULTA), Cigna (CI), Waste Connections (WCN) and Waste Management (WM) all have relative strength lines at 52-week highs. The RS line tracks a stock’s performance vs. the S&P 500 index and is an easy way to spot leaders and laggards in any kind of market. An RS line hitting a new line as, or before, a stock breaks out is especially bullish.

ENPH stock, Waste Connections and Ulta Beauty are flashing buy signals, though the market environment makes any buys risky right now.

Enphase and WCN stock are in the IBD 50. ENPH stock is in the IBD Big Cap 20.

The video embedded in this article discussed Tuesday’s market action and analyzed Enphase, Sunrun (RUN) and WCN stock.

Earnings

Chinese EV startup Nio (NIO) and sporting goods retailer Academy Sports & Outdoors (ASO) will report before Wednesday’s open. Nio stock is struggling along with most China EV makers. ASO stock is trying to hold support at its 50-day line. A strong bounce from that level could offer an early entry.

Apple iPhone Event

Apple (AAPL) will unveil the iPhone 14 and a new Apple Watch at a Wednesday event at 1 p.m. ET. The latest Apple iPhone is expected to boast incremental improvements — faster processor, better camera, and improved battery life — vs. revolutionary changes. Still, the new products are key for the holiday shopping season.

Apple stock dipped 0.8% to 154.53 after hitting resistance at the 50-day line. Shares tumbled below the 200-day and then the 50-day last week. The RS line for AAPL stock isn’t far from highs, but the market has been weakening.

Dow Jones Futures Today

Dow Jones futures fell 0.4% vs. fair value. S&P 500 futures sank 0.5% and Nasdaq 100 futures retreated 0.5%.

Crude oil futures and natural gas futures declined more than 1%.

China has more than 60 million people in lockdowns or partial lockdowns amid rising Covid cases around the country. A full lockdown continues in Chengdu, the provincial capital of industrial southwestern province Sichuan, is likely to be extended. Tech hub Shenzhen is under significant restrictions. These restrictions, and the prospect of serious curbs indefinitely around the country as cases flare up, are taking a toll on economic activity.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally opened with modest gains but the indexes soon retreated. Despite an intraday bounce, stocks faded again.

The Dow Jones Industrial Average fell 0.55% in Tuesday’s stock market trading. The S&P 500 index declined 0.4%. The Nasdaq composite lost 0.7%. The small-cap Russell 2000 gave up 0.9%.

U.S. crude oil prices rose 1 cent from Friday’s close to $86.88 a barrel. But that’s after being up 4% Monday morning as OPEC+ unexpectedly cut production quotas slightly. Natural gas futures tumbled 7.3%, adding to Friday’s solid losses and continuing to retreat from 14-year highs. That’s despite Russia saying it won’t restore natural gas flows to Europe unless sanctions are lifted.

The 10-year Treasury yield surged 15 basis points to 3.34%, closing in on June’s 11-year high of 3.48%. The 10-year yield hit a recent low of 2.52% on Aug. 2.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.2%. The iShares Expanded Tech-Software Sector ETF (IGV) lost 0.8%. The VanEck Vectors Semiconductor ETF (SMH) slid 1.1%.

SPDR S&P Metals & Mining ETF (XME) rose 0.7% and the Global X U.S. Infrastructure Development ETF (PAVE) edged up 0.2%. The Energy Select SPDR ETF (XLE) sank 0.9% and the Financial Select SPDR ETF (XLF) dipped 0.2%. The Health Care Select Sector SPDR Fund (XLV) inched up 0.1%

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 1.2% and ARK Genomics ETF (ARKG) 1.8%.

Five Best Chinese Stocks To Watch Now

High RS Stocks

Enphase stock jumped 4.9% in above-average volume, rebounding from the 21-day moving average and breaking the downtrend in a short consolidation. Investors could buy ENPH stock here. It’s a top stock in the No. 1-rated Energy-Solar group, with Array Technologies (ARRY), Sunrun (RUN) and the Invesco Solar ETF (TAN) among those setting up. But any market rebound could quickly get turned back.

ENPH stock could have a flat base on a weekly chart after this week.

ULTA stock rose 1.1% to 427.82, holding above…