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From Investor's Business Daily:
7:24 PM ET
Dow Jones futures rose late Tuesday, along with S&P 500 futures and Nasdaq futures. The Dow Jones, S&P 500 index and Nasdaq composite tumbled in Tuesday's stock market. Investors can find parallels to the choppy stock market rally from this past spring and summer. But there are key differences that aren't encouraging. Long-term support lines are acting as resistance. Stock market rallies are short-lived, while the stock market struggles to make higher highs. Apple (AAPL) and FANG stocks Facebook (FB), Amazon.com (AMZN), Netflix (NFLX) and Google parent Alphabet (GOOGL) are all in worse shape than earlier this year. Finally, economic and earnings growth look weaker going forward....MUCH MORE
Dow Jones Futures Today
Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures advanced 0.45%. Nasdaq 100 futures climbed 0.5%. Remember that Dow Jones futures, Apple stock and other overnight action don't always translate into actual trading in the next regular stock market session.
The NYSE and Nasdaq stock markets will be closed Wednesday for President George H.W. Bush's funeral. So will other U.S. financial markets.
Stock Market Sell-Off
The Dow Jones industrial average fell 3.1% in Tuesday's stock market trading. The S&P 500 index tumbled 3.2% and the Nasdaq composite 3.8%. Confusion and concerns about the China trade war truce, along with a partially inverted Treasury yield curve were the key catalysts for the sell-off.
Those are similar headwinds to earlier this year, when Trump tariff threats and a flattening Treasury yield curve — though with rates generally rising — were the main culprits.
Eventually, the stock market recovered over several months, but in choppy action that made investing challenging.
So, are we headed for a similar stock market slog to new highs? Keep in mind, to borrow every investment vehicle's legalese, that past performance is not a guarantee of future results. But in addition to similar headwinds and volatile market action, there are four notable differences between then and now.
Key Support Levels Act As Resistance
In the early 2018 stock market correction and aftermath, the 200-day moving average acted as support. The major averages hit stock market correction lows on Feb. 9, when the S&P 500 index just undercut that long-term support intraday. The S&P 500 index did test its 200-day over sessions in April, closing just below that line on one occasion. The Dow Jones tested that level several times but didn't close below that rising line until July 30. The Nasdaq composite never touched its 200-day. So the line generally acted as a support area.
Since the stock market correction kicked into gear in October, the 200-day line has acted as resistance, especially for the Nasdaq and S&P 500 index. On Tuesday, the Dow Jones and S&P 500 plunged through their 50-day and 200-day lines. The Nasdaq lost further ground....
