Long-time technical strategist Tom DeMark says two new closing highs for the Dow industrials and the S&P 500 would likely trigger sell signals, in his long-running 13 model.
“The past two weeks’ rally has been on stilts and a sudden suspension of buying—even without selling pressure— could undercut the rally and transform into a sellers’ market. Granted good news could unlikely extend into inauguration but, at any time, once buying interest is interrupted, subsequent rallies should be short lived,” says DeMark.
Stock futures were lower but Domino’s Pizza and Pool Corp. got a bump after the 13-F filing from Warren Buffett’s Berkshire Hathaway. Domino’s stock rose 8% and Pool’s rose 6%.
Otherwise it was mostly red, with Applied Materials down 7% on a soft revenue outlook.
Most of the big tech stocks were lower, though not by a lot, with losses for Nvidia, Intel and Apple.
U.S. stock futures pointed to another day of losses Friday as investors absorbed the message of Fed Chair Jerome Powell that the central bank may not pursue rate cuts aggressively.
Dow Jones Industrial Average futures fell 204 points, or 0.5%, to 43697.
S&P 500 futures dropped 38 points, or 0.6%, to 5940.
Nasdaq-100 futures decreased 188 points, or 0.9%, to 20824.
On Thursday, the Dow Jones Industrial Average fell 207 points, or 0.47%, to 43751, the S&P 500 declined 36 points, or 0.6%, to 5949, and the Nasdaq Composite dropped 123 points, or 0.64%, to 19108.
Powell on Thursday said the Fed would approach rate decisions “carefully” due to the economy’s strength. “Whether he made this statement purely based on the latest incoming macro data or whether he is making a case for not cutting rates as a precautionary statement before January 20th will remain his secret,” said analysts at DWS Investment.
Retail sales data is the highlight of Friday’s economics calendar, as investors look ahead to Nvidia results next week.
The release of 13-F filings of major investors also was moving markets, notably Domino’s Pizza which jumped 8% after Warren Buffett’s Berkshire Hathaway disclosed it bought stock in the pizza chain.
