Dow Jones Futures: Market Rally Attempt Begins, 7 Stocks Showing

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The major indexes and leading stocks suffered heavy losses last week, prompting a shift in the market direction to “correction.”

X

Tesla (TSLA) reported booming third-quarter deliveries on Saturday morning. The EV maker delivered over 241,000 vehicles, far above Q2’s record and also beating views comfortably.

The S&P 500 and Nasdaq plunged below their 50-day lines and undercut their Sept. 20 lows. Growth stocks had their worst week since the coronavirus crash. While stocks rebounded Friday, the marks day one of a market rally attempt. For now, the market remains in a downtrend.

In such an environment, investors should have limited market exposure or be entirely in cash. Look for stocks with strong relative strength lines.

Netflix (NFLX), Datadog (DDOG), Mosaic (MOS), American Express (AXP), Bill.com (BILL), Quanta Services (PWR) and Paychex (PAYX) all have RS lines at or near highs, reflecting their outperformance vs. the S&P 500 index.

Netflix stock is in a buy zone now. In a healthy stock market rally, investors could buy NFLX, or see early entries on Datadog, Mosaic, Paychex and AXP stock.

Also keep an eye on Microsoft (MSFT) and Google (GOOGL). These tech megacaps’ RS lines aren’t far from highs. If MSFT stock and Google can reclaim their 50-day lines, it’s a good sign for the Nasdaq.

As for TSLA stock, it was holding in a buy zone before reporting Q3 deliveries. The RS line for Tesla isn’t at a new high, but is at its best levels in nearly six months.

Tesla stock, Microsoft and Google are on IBD Leaderboard. Microsoft stock and Google also are on IBD Long-Term Leaders. American Express and PWR stock are on SwingTrader. Google stock is on the IBD 50.

The video embedded in this article analyzed the overall stock market action and reviewed Netflix, Mosaic and DDOG stock.

Why This IBD Tool Simplifies The Search For Top Stocks

Infrastructure Bill Still In Flux

Meanwhile, the fate of the $1.2 trillion infrastructure bill remains unclear. House progressives are demanding significant progress, at minimum, on a multi-trillion dollar reconciliation tax-and-spend package before voting for the bipartisan infrastructure bill. But Democratic leaders now appear to be trying to get centrist Democrats to agree to a $2 trillion reconciliation package vs. the long-touted $3.5 billion package. President Biden met with Democratic lawmakers Friday, telling them the infrastructure bill won’t pass until there’s “agreement” on the reconciliation bill.

Pelosi on Saturday now said the infrastructure bill needs to pass “well before” Oct. 31, when existing transportation funding expires.

Also, while Congress last week extended government funding into early December, lawmakers still must approve a debt limit hike. Treasury Janet Yellen has pegged Oct. 18 as the likely government default date. Raising the debt limit without Republican votes could complicate the…