Dow Jones Futures Rise, Bitcoin Rebounds; Beware The Bear Market


Dow Jones futures rose solidly Monday afternoon, along with S&P 500 futures and Nasdaq futures. The Bitcoin price rebounded to back above $20,000 after tumbling far below that key level on Saturday.

The bear market intensified last week, amid growing concerns that the Federal Reserve will be forced to drive the economy into a recession in order to rein in inflation.

With the major indexes plunging toward their pre-Covid peaks, investors should be on the sidelines. Don’t get excited by one-day rebounds, such as Friday’s tech-led advance. Instead, prepare to take advantage of the next sustained uptrend.

Stocks Holding Up

Not many stocks are holding up, but here are five that are doing a reasonable job: Tesla (TSLA) rival BYD (BYDDF), Vertex Pharmaceuticals (VRTX), fertilizer and lithium play SQM (SQM), Eli Lilly (LLY) and Enphase Energy (ENPH).

All have relative strength lines at or near highs. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.

BYD stock is near a traditional buy point. SQM stock is finding support at its 50-day line after round-tripping big gains. ENPH stock regained that key level on Friday. Vertex stock and Eli Lilly aren’t far below their 50-day lines.

LLY stock is on IBD Leaderboard. Eli Lilly and SQM stock are on the IBD 50. BYD was Friday’s IBD Stock Of The Day.

The video embedded in this article discussed the weekly market action and analyzed BYD, SQM and Enphase stock.

Dow Jones Futures Today

Dow Jones futures rose 0.9% vs. fair value. S&P 500 futures climbed 1.05% and Nasdaq 100 futures advanced 1.1%.

Crude oil prices rose slightly.

U.S. markets are closed Monday in observance of the Juneteenth holiday, but other exchanges around the world are open.

Dow futures will be open until 1 p.m. ET, then reopen at 6 p.m. ET.

Federal Reserve Gov. Christopher Waller said Saturday that he favors another 75-basis-point rate hike at the late July Fed meeting. Markets see a high likelihood of that currently, but it’s not fully priced in.

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

Bitcoin Rebounds

Bitcoin broke well below the psychologically key $20,000 level on Saturday. It hit $17,601.58, a fresh 18-month low and below its December 2017 peak of $18,942.

The price of Bitcoin on Monday was back above $20,000. That’s still far below the November 2021 peak of $68,990.90 and down roughly a third from June 11.

Other cryptocurrencies, which have crashed as much or more than Bitcoin in the “crypto winter,” also bounced back strongly on Sunday.

That includes Dogecoin, which skyrocketed to 74 cents in early 2021 and undercut 5 cents on Saturday. Tesla CEO Elon Musk tweeted Sunday that he is still buying it.

Investors have fled risky assets generally amid inflation and recession fears, but crypto seems to be diverging bearishly vs. speculative growth stocks. After Bitcoin and the Nasdaq peaked in November, the cryptocurrency tracked ARK Innovation ETF (ARKK) closely for several months. But ARKK hasn’t undercut its late May lows, while Bitcoin has accelerated its losses. In recent weeks, several crypto lenders have halted withdrawals while so-called stablecoins have become untethered.

Stock Market

The stock market had big weekly losses once again, with the major indexes tumbling to their worst levels in more than a year.

The Dow Jones Industrial Average sank 4.8% in last week’s stock market trading. The S&P 500 index tumbled 5.8%. The Nasdaq composite retreated 4.8%. The small-cap Russell 2000 plunged 7.5%.

The 10-year Treasury yield rose 8 basis points to 3.24%. On Tuesday, the 10-year yield shot up to 3.48%, an 11-year high.

U.S. crude oil futures plunged more than 9% to $109.56 a barrel last week, snapping a seven-week losing streak. Gasoline futures also fell sharply. Natural gas prices tumbled.


Among the best ETFs, the Innovator IBD 50 ETF (FFTY) dived just over 12% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) skidded 9.1%. The iShares Expanded Tech-Software Sector ETF (IGV) stumbled 5.1%. The VanEck Vectors Semiconductor ETF (SMH) lost 8.1%.

SPDR S&P Metals & Mining ETF (XME) sold off 10.4% last week. The Global X U.S. Infrastructure Development ETF (PAVE) faltered 8.6%. U.S. Global Jets ETF (JETS) descended 8.9%. SPDR S&P Homebuilders ETF (XHB) stepped down 11.4%. The Energy Select SPDR ETF (XLE) crashed 17.2% and the Financial Select SPDR ETF (XLF) gave up 4.8%. The Health Care Select Sector SPDR Fund (XLV) lost 4.5%, with Lilly and VRTX stock both holdings.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 3.3%, rebounding well off lows and still not undercutting its late May lows. ARK Genomics ETF (ARKG) dipped just under 1% after setting a fresh two-year low. Tesla remains a major holding across Ark Invest ETFs. Ark has a small position in BYD stock.

Author: Ed Carson

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