Dow Jones Shows Strength Amid Tech Sell-Off; Bitcoin Dives, But Shopify Stock Bounces Off Key Support Level

Technology stocks took another beating early Tuesday, but the Nasdaq composite was sharply off lows in afternoon trading, paring a 3.9% intraday loss to about 1.5%. The Dow Jones Industrial Average held up well for the second straight session, helped by another strong showing from Walt Disney (DIS). Disney stock hit a new high in the Dow Jones today, after jumping 4% Monday.

Four other stocks in the Dow Jones were up at least 1% each, including Visa (V), Verizon (VZ), Chevron (CVX) and Procter & Gamble (PG).


Bitcoin was down more than 10% to around $47,500. Riot Blockchain (RIOT) slumped 25% and MicroStrategy (MSTR) gave back 20%. Near the end of last year, MicroStrategy held nearly 70,500 bitcoins. Last week, the company completed a $1.05 billion debt offering in a move that will allow it to buy another $1 billion in bitcoin.

The Nasdaq 100 gapped below its 50-day moving average and was down 1.3%, hurt by weak performances from Baidu (BIDU), Moderna (MRNA), PayPal (PYPL), Zoom Video (ZM) and Tesla (TSLA). Despite Tuesday’s loss, Baidu is still holding bullishly above its 21-day exponential moving average.

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 31444.68 -77.01 -0.24
S&P 500 (0S&P5) 3858.67 -17.83 -0.46
Nasdaq (0NDQC ) 13327.38 -205.67 -1.52
Russell 2000 (IWM) 220.06 -3.67 -1.64
IBD 50 (FFTY) 45.83 -1.65 -3.48

PayPal stock and Tesla stock are Leaderboard stocks. PayPal first joined Leaderboard in May, when it broke out powerfully from a cup base. Tesla, meanwhile, flashed a sell signal Monday for those who bought at the 466 buy point in November. The sell signal was a decisive break of the 50-day line.

Dow Jones Today

The Nasdaq composite gapped down and is testing support at its 50-day line. Selling was less intense in the S&P 500 and Dow Jones. The S&P 500 was down 0.5% and the Dow Jones industrials eased 0.2%. Volume on the NYSE and Nasdaq was sharply higher compared to the same time Monday.

The Nasdaq slumped 2.5% Monday. The session had the feel of distribution, or institutional selling, but the index avoided a distribution day because volume was lower than Friday. In terms of average daily dollar volume, though, volume was higher. A distribution day was added to the S&P 500 count because volume on the NYSE was higher than Monday, according to The Big Picture column.

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Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slumped 3.5%, but it’s holding support at the 50-day line. Same with the Innovator IBD Breakout Opportunities ETF (BOUT), which was down 3.5%.

Trex (TREX) was one of the worst performers in the IBD 50 index of leading growth stocks, down 9%. It flashed a sell signal today with a break of the 50-day line.

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The iShares Expanded Tech-Software Sector ETF (IGV) was down 2%, clinging to support at the 50-day line. The VanEck Vectors Semiconductor ETF (SMH) lost 1.5%.

Stock Action

In other stock market news, several top-performing growth stocks made bullish stands at their 50-day lines, including Square (SQ), Palo Alto Networks (PANW), Shopify (SHOP) and Teladoc (TDOC).

Palo Alto Networks paid a visit to its 50-day line but rallied off lows after the company reported its second straight quarter of accelerating sales growth.

Square reports earnings after the close today. Teladoc reports late Wednesday.

Inside the MarketSmith Growth 250, Five9 (FIVN) Snap (SNAP) and Twitter (TWTR) made impressive upside reversals.

Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.


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