Before the Bell – Friday, August 21

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Good morning. Thursday's sell-off pushed the Nasdaq below a level IBD watches closely, so today is about whether the market stabilizes or the damage spreads.

The S&P 500 closed at 7,641.16, down 0.87%. The Nasdaq composite closed at 26,067.17, down 1.00%. The Dow Jones Industrial Average closed at 52,759.21, down 1.32%, its lowest level since Aug. 3. The Russell 2000, which tracks smaller companies, fell 1.34%.

President Trump's threat of what he called an “Economic D-Day” campaign against Iran spooked investors, oil prices jumped, and Treasury yields rose back toward their recent highs. Dow component Walmart sank nearly 9% despite beating earnings estimates, after same-store sales growth came in below target. Energy and gold-mining stocks bucked the slide, but most of the market sold off broadly, with small caps leading the decline.

Beginner note: IBD flagged something specific here: the Nasdaq closed below the low it set on Aug. 4, the day it confirmed a new uptrend in what IBD calls a follow-through day. Closing back below that level is one of IBD's more reliable warning signs that a rally is in trouble, since it means the buying that started the uptrend has now been fully given back. It doesn't guarantee a bear market, but it's exactly the kind of signal that makes IBD tell investors to raise cash and get more selective rather than add new positions.

$LB ( ▲ 4.26% ) owns land across the Permian Basin in Texas and New Mexico and collects royalty and surface-use payments from the oil and gas companies that operate on it, without drilling a single well itself. While most of the market sold off Thursday, LandBridge jumped 5.88% to close at 87.03, touching an all-time high of 90.75 intraday, on volume roughly 180% above its 50-day average, according to Investor's Business Daily. The move builds on a breakout above a 79.74 buy point the stock had failed to clear several times between May and August.

Why it's worth watching: a stock rallying on heavy volume during a broad market sell-off is one of the clearer signs of real institutional buying, exactly the kind of relative strength CAN SLIM investors look for when the rest of the market is struggling. It's also a reminder that a base doesn't have to work on the first attempt. LandBridge failed to clear this same buy point multiple times over three months before finally breaking through.

Educational content only. Not financial advice. Past performance does not predict future results. Read the full financial disclosure.

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