Dow Jones futures fell slightly early Monday, along with S&P 500 futures and Nasdaq futures.
The stock market rally had decent gains in the holiday-shortened week. The major indexes have had a huge November so far, approaching their 2023 highs. Many leading stocks are extended, but there are some buying opportunities and setups to watch.
However, the market fear gauge is at its lowest levels since before the Covid crash. That's a reason to be worried, or at least be wary.
Black Friday Boosts
There were various indicators suggesting solid Black Friday and Thanksgiving weekend holiday sales, especially online, with Cyber Monday underway today. Shopify reported a 22% Black Friday sales increase for its affiliated merchants. Other data signaling a big jump in buy now, pay later revenue and orders is likely good news for BNPL leader Affirm Holdings.
SHOP stock rose solidly, signaling a move out of a buy zone. AFRM stock climbed modestly, moving within a buy zone. Amazon.com advanced 1%, within a buy area, with other e-commerce plays faring well.
Stocks To Watch
Nvidia fell from record highs this past week, but remains in a buy zone following earnings and some China concerns. Amazon.com is also holding in a buy zone as the holiday season officially gets underway.
Novo Nordisk broke out on Friday, while Affirm Holdings reclaimed a buy point.
Taiwan Semiconductor, which makes chips for Nvidia, Apple and many others, is just below a buy point. Warren Buffett-backed Nu Holdings is moving back toward a buy point.
Booking Holdings and Carpenter Technology also are setting up.
Nvidia, Novo Nordisk and AMZN stock are in the IBD Leaderboard lineup, with BKNG stock on the Leaderboard watchlist. Nvidia stock, Novo Nordisk and Carpenter Technology are on the IBD 50.
The video embedded in the article highlighted the market's weekly action and analyzed NVO stock, Taiwan Semiconductor and First Citizens Bancshares.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures retreated 0.1% and Nasdaq 100 futures edged lower.
The 10-year Treasury yield edged down to 4.45%.
Crude oil futures fell slightly.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally had a solid performance in a holiday-shortened trading week.
The Dow Jones Industrial Average rose 1.3% in last week's stock market trading. The S&P 500 index advanced 1%. The Nasdaq composite advanced 0.9%.
So far this month, the Dow is up 7.1%, the S&P 500 8.7% and the Nasdaq 10.9%. All the major indexes have cleared several key levels with little resistance. The summer 2023 highs offer the next big hurdle.
The Nasdaq 100, up 0.9% last week, set a 2023 high on Wednesday.
Meanwhile, the small-cap Russell 2000 advanced 0.5% for the week, slightly below the 200-day moving average.
The 10-year Treasury yield rose 4 basis points to 4.48%, rebounding Friday from two-month lows.
U.S. crude oil futures dipped 0.7% to $75.54 a barrel last week, amid some big intraday swings. It was the fifth straight weekly decline.
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Market Fear Fades
Right now, the market rally is looking healthy, with a number of reasons to feel bullish. Perhaps the biggest concern is the lack of market fear. The CBOE Volatility Index, or VIX, fell sharply last week, the fifth straight weekly decline. The market fear gauge finished Friday at the lowest levels since January 2020.
The VIX rose modestly early Monday.
Meanwhile, CNN's Fear & Greed Index hit its highest level since Aug. 8.
Excessive bullishness or complacency could foreshadow some sort of pullback. So do other measures signaling the market is getting overbought.
But a pullback doesn't have to happen right away and it wouldn't have to be sharp or last long.
The VIX and other psychological gauges are secondary market indicators. The major indexes and leading stocks are the primary indicators.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF gained 1.8% to its best levels in nearly two years. The VanEck Vectors Semiconductor ETF fell 0.5% after hitting record highs earlier in the week. Nvidia and TSM stock are major SMH holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF gained 2.7% last week and ARK Genomics ETF rose 1.6%.
SPDR S&P Metals & Mining ETF climbed 1.85% last week to just below a seven-month best. The SPDR S&P Homebuilders ETF dipped 0.2% but is still up 14.8% this month. The Energy Select SPDR ETF edged up 0.3%. The Health Care Select Sector SPDR Fund gained 2.25%, reclaiming its 200-day line.
The Industrial Select Sector SPDR Fund advanced 0.7% and the Financial Select SPDR ETF added 0.9%, the fourth straight weekly gains for both.
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Stocks In Buy Zones
Nvidia stock hit a record 505.48 on Monday, but fell 3.1% to 477.49 for the week. That's just above a 476.09 buy point from a double-bottom base. The 21-day line is just below that level. Investors could buy NVDA stock here, or wait to see if it shows renewed strength.
Nvidia earnings crushed views with a 593% per share spike vs. a year earlier. Sales leapt 206%. The AI chip leader also guided revenue well above consensus for Q4, but the $20 billion target was below some whisper numbers. Nvidia did say U.S. export curbs on advanced chips will hurt sales this quarter. On Friday, Reuters reported that Nvidia is delaying an AI chip for China into early next year.
NVO stock rose 2.3% on Friday and 4.15% for the week to 105.60, clearing a 104 flat-base buy point. Novo Nordisk's weight-loss drug Wegovy will enter Japan in February, while also planning expansions to several other markets next year.
Amazon stock rose 1.1% to 146.74 for the week, reclaiming a 145.86 consolidation buy point, according to MarketSmith analysis. Black Friday kicked off the official holiday shopping season, but gift buying has been going for weeks.
Affirm stock popped 5.9% last week to 26.25, reclaiming a 25.63 cup-base buy point on Friday. AFRM stock has been moving above and below the buy point since its fiscal Q1 earnings on Nov. 8. Revenue growth is picking up with the buy now, pay later specialist set to turn profitable in fiscal 2024. BNPL orders are up sharply this holiday season.
Stocks Near Buy Points
Taiwan Semiconductor stock has a 100.70 cup-with-handle buy point. Shares fell 1.7% to 97.88 last week. Earlier this month, TSM stock jumped as the foundry giant reported October revenue rose vs. a year earlier, fueled by AI chips from the likes of Nvidia. That signals a long-awaited business turnaround is underway for Taiwan Semi.
BKNG stock is setting up in a consolidation, with a new handle offering a 3,207.32 buy point. Shares of the online travel site dipped 0.6% to 3,115.59 for the week.
CRS stock has a 71.30 buy point from a short cup-with-handle base. Carpenter Technology edged up 0.3% to 68.56 for the week.
NU stock rose 1.5% to 8.19 this past week, nearly reclaiming an 8.29 buy point. Shares tumbled from a 52-week high following Q3 results that showed huge EPS growth but didn't wow vs. expectations. But Nu Holdings rebounded from near the 50-day line. Warren Buffett's Berkshire Hathaway has owned a stake for about two years, and started buying it around Nu's December 2021 IPO.
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What To Do Now
The market rally continues to act well, entering a power trend on Nov. 20. Investors can still add exposure.
Buying opportunities aren't as plentiful, with many leaders already extended. Some stocks are setting up, but are they leftovers at this point? Do you target stocks that are just breaking out, perhaps with weaker relative strength, or wait to see if the rally's leaders offer new chances to buy?
Various indicators suggest the odds of a market pullback are rising. But a modest pullback would probably be constructive, letting stocks forge handles and other entries.
Keep working on watchlists. Cast that wide net to capture emerging leadership while also focusing in on a select number that you're seriously considering buying.
Earnings season isn't over. Zscaler, CrowdStrike, UiPath, Samsara, Elastic, Workday, PDD Holdings and Salesforce.com are just some of the notable names on tap this coming week.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
