The Dow Jones Industrial Average continued to show mild seesaw action in the stock market today, moving between narrow gains and losses. At around 11:30 a.m. the 30-stock blue chip average padded its mild early-morning gain and rebounded 0.6%. At the session high of 25,907, the Dow showed a tiny gain of 0.4% in the current quarter.
The Dow's bank and financial components, such as JPMorgan Chase (JPM), Goldman Sachs (GS) and Travelers (TRV), rebounded some but remain market laggards. All three of these stocks show poor relative strength.
The S&P 500 continued to trade near break-even. Small caps outperformed, as the Russell 2000 advanced 1%. But small caps are still lagging in 2020. The iShares Russell 2000 (IWM) ETF holds a miserly 53 Relative Strength Rating. This means it's outperformed just 53% of all stocks and exchange traded funds in the IBD database over the past 12 months.
A rally by oil and gas firms, boosted by crude oil's attempt to retake $40 a barrel, helped buffer the slide. The Nasdaq composite, turning slightly positive in late-morning trade, saw its year-to-date gain of 17.6% through Thursday's action shaved by a minor loss of around 0.4%.
The Nasdaq 100-tracking Invesco QQQ Trust (QQQ) ETF surrendered less than 0.6% before recouping virtually all of those losses.
Beyond Dow Jones: This ETF Is Back In Positive Ground
Innovator IBD 50 (FFTY) gave back less than 0.3%.
At Friday's session high of 36.54, the growth stock-focused exchange traded fund has returned into positive territory, rising 5.2%. It rallied 25.7% in 2019.
The S&P 500 still shows a 2.8% loss since Jan. 1. The Dow industrials, at 25,668, is still down 10% for the year after sinking more than 38% from its February peak of 29,568.
FAANG stocks and other megacap techs showed mixed action. Microsoft (MSFT), one of the hottest stocks within the Dow industrials and a half size position in IBD Leaderboard, eased 0.8% but remains sharply extended after running past a 187.61 buy point in a well-formed cup with handle.
The 5% buy zone went up to 196.99.
Microsoft's breakout began on June 5, nearly two months since the IBD Weekend Stock Market Update detailed action in an April 6 follow-through day by the Nasdaq composite.
A follow-through day gives the earliest market-based signal that stocks, following a long or serious downtrend, are possibly ready to turn higher.
In The Chip Space
Amid reported rumors that Dow Jones laggard Intel (INTC) is going to delay the debut of a new chipset for data server computers, Advanced Micro Devices (AMD) has been regaining lost ground.
The former Leaderboard member, which rallied more than 7% in vigorous turnover on Thursday, edged less than 1% lower. The stock has been seeing persistent upside resistance at the 58-59 price level.
AMD has yet to form a new base. However, watch for the stock to potentially retake a prior buy point of 57.08, which comes from a double bottom that began forming after the stock made a near-term peak on April 20.
From that point, it made two lows of 49.09. In an excellent double-bottom base, the second low should undercut the first low. That would signify a supreme shakeout of weak holders.
To spot the pivot point in a double bottom, add 10 cents to the middle price peak in between the two lows. Or in this case, AMD made an interim rally up to 56.98 on May 20 before selling off again.
The company has forged ahead with faster, more efficient semiconductors built on ever-smaller silicon wafers. As a result, Advanced Micro Devices has taken market share from arch rival Intel.
The Street sees Q2 earnings ramping up 100% to 16 cents a share vs. a year ago, and rising another 72%, 16% and 56% in the following three quarters.
A year ago, Q2 profit slumped 43% to 8 cents a share.
AMD departed Leaderboard on June 3. The hand-picked list of companies with outstanding fundamentals, stock price strength and institutional sponsorship shows more than half a dozen companies in the market-leading chip and software sectors.