Jump to content

Another market selloff sees the S&P 500 post its worst day since June 2020


Recommended Posts

Target has joined the long list of retailers showing decreasing profit margins on the back of increasing input costs, which factored in to already weakening sentiment in equity markets.

 

 

Daniela Sabin Hathorn | Presenter and Analyst, London | Publication date: Thursday 19 May 2022 

The S&P 500 posted its worst session since June 2020 with the tech sector taking the brunt of the losses, while the Nasdaq shed another 4% on Wednesday.

Wall Street close

Let's take a look now at the Wall Street close in yesterday's session - really negative sentiment they're pricing in for the markets as you can see.

The Dow Jones Industrial Average down about 3.57%, shedding over 1160 points throughout the session. The S&P 500 had its worst day since June 2020, down just above 4% there. And the Nasdaq once again taking the heavy brunt of the losses, down about 4.73% throughout the session.

Technical analysis

Let's take a look now at some charts of this early US trade, because the negativity started yesterday before the opening bell.

We did have earnings from US retailer Target coming out throughout the morning. And like Walmart, the day before, Target announced that sales were up, but profits were down thanks to increasing costs and those tightening margins that we have seen in the markets.

Now, it was quite a negative sentiment, but it is a bit of a correction of what we've seen throughout the pandemic. We've seen a lot of evaluation in a lot of these shares, especially tech shares, throughout the pandemic and it's kind of a situation where we've seen that decline and getting to more sustainable levels.

As you can see here, the S&P 500 now really undoing those gains that we've seen steadily over the last week heading towards that low that we saw on Thursday last week when we saw that momentum turning. And it seems to me that every time we see a steady increase there, we see those daily gains building to the upside, we then see a day of big reversal, those sellers piling into the market as soon as we see some negative sentiment.

It looks like those sellers are really watching out for any attempt to jump into the market, looking to sell the top, and that seems to be what happened in yesterday's session once again.

So it does seem that we are stuck in this sellers market, this bear market, where any attempted recovery is met with some fierce resistance from sellers. And it only takes one day of heavy selling to undo those steady gains that we've seen throughout the week. So more negative sentiment likely to come here.

Nasdaq 100

Let's quickly look at the Nasdaq to see how that is performing.

Similar scenario here, those daily gains were mounting there, not quite managing to see those higher highs on the upside. So it was showing a little bit of reluctance from those sellers to give in some further space.

Once again, we saw that intense selling, pretty much undoing the gains for the week, heading around the low of Thursday last week.

 

 

ig group.PNG

Link to comment

S&P 500, Nasdaq 100 Latest – Bear Market Slump Continues.

S&P 500 isn't in a bear market yet but it could be soon

May 19, 2022 |  DailyFX
Nick Cawley, Strategist

S&P 500, NASDAQ 100 PRICES, CHARTS, AND ANALYSIS

  • Bear market rallies continue to fail.
  • Fresh multi-month lows look increasingly likely.
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,003
    • Total Posts
      85,717
    • Total Members
      68,205
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Dhairya
    Joined 29/06/22 11:32
  • Posts

    • AUSTRALIAN DOLLAR TALKING POINTS AUD/USD consolidates within the June range as it manages to hold above the yearly low (0.6829), but the exchange rate may face headwinds ahead of the Reserve Bank of Australia (RBA) interest rate decision on July 5 as the central bank tames speculation for another 50bp rate hike.   AUD/USD OUTLOOK MIRED BY WANING BETS FOR RBA RATE HIKE IN JULY AUD/USD fails to extend the series of higher highs and lows from last week’s low (0.6869) on the back of US Dollar strength, and the Greenback may continue to outperform its Australian counterpart as Governor Philip Lowe acknowledges that “like other countries, we’re having to raise interest rates and there are uncertainties around how that’s going to affect the economy.” As a result, Governor Lowe went onto say that the central bank is “on a narrow path back to low inflation” while speaking at an event held by UBS, with the central bank head emphasizing that the benefits of meeting every four-weeks is that the RBA is able to “take stock of information at a very high frequency basis and are able to respond to the changing circumstances.” The comments suggest the RBA will move to the sidelines after delivering a 50bp rate hike for the first time since 2000 as the minutes from the June meeting reveal that “over the preceding couple of decades, increases in the cash rate had typically occurred in 25 basis point increments,” and waning speculation for a further shift in monetary policy may drag on the Australian Dollar as the ASX RBA Rate Indicator now shows a“64% expectation of an interest rate increase to 1.50% at the next RBA Board meeting.” Keep in mind, the indicator showed an 80% chance for a July RBA rate hike during the previous week, and the different approaches between the RBA and Federal Reserve may keep AUD/USD under pressure in the second half of 2022 as Chairman Jerome Powell and Co. show a greater willingness to implement a restrictive policy. In turn, the consolidation in AUD/USD may end up being temporary with the Federal Open Market Committee (FOMC) on track to implement higher interest rates over the coming months, but a further decline in the exchange rate may fuel the tilt in retail sentiment like the behavior seen earlier this year.   Jun 29, 2022 | DailyFX David Song, Strategist
    • Jun 29, 2022 | DailyFX Nick Cawley, Strategist EUR/GBP CHART AND ANALYSIS Multi-week trend remains in place. Central Bank speak on tap. EUR/GBP Daily Price Chart June 29, 2022 Retail trade data show 55.93% of traders are net-long with the ratio of traders long to short at 1.27 to 1. The number of traders net-long is 13.13% lower than yesterday and 4.31% lower from last week, while the number of traders net-short is 7.48% lower than yesterday and 13.79% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/GBP prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/GBP price trend may soon reverse higher despite the fact traders remain net-long. What is your view on EUR/GBP – bullish or bearish?
    • Dollar strength pressures EUR/USD and GBP/USD but lifts USD/JPY Risk-off sentiment has returned, and this has resulted in gains for the dollar at the expense of the euro, sterling and yen.    Chris Beauchamp | Chief Market Analyst, London | Publication date: Wednesday 29 June 2022  EUR/USD EUR/USD returned to the 50-day simple moving average (SMA) this week ($1.0588), having rallied modestly from the lows of June, along with most risk assets. However, it looks like the hiatus from risk-off sentiment has come to an end once again, and a fresh move lower is in store. Further declines from here will bring $1.0384 and then $1.035 into view, as the pair heads back to retest recent lows seen over the past two months. A revival back above the 50-day SMA and then above $1.06 would be needed to suggest a resumption of the bounce, which then targets $1.0637 and higher. Source: ProRealTime GBP/USD struggles in early trading For GBP/USD as well it looks like a new drop is at hand, as the dollar strengthens again and the concerns about inflation and growth begin to build. The downtrend here looks to be in the process of reasserting itself, which suggests a resumption of the move back to $1.20 and lower. Below this there is not much evidence of support until the March 2020 lows of $1.15. Buyers will need to step in soon and push the price back above $1.2366 if they are to avoid this scenario, although a bounce back above $1.263 would be needed if it is to push on to create a higher high. Source: ProRealTime USD/JPY holds near highs USD/JPY has returned to the highs of last week, with the uptrend here just as firmly in place as the downtrends are for EUR/USD and GBP/USD. Now that the 2002 highs have been breached, the next step would be ¥146.75, the highs from 1998. Horizontal and trendline support come into view around ¥135.00, which may help support the price in the end of any drop in coming days. Below this the price would head towards the 50-day SMA at ¥131.00. Source: ProRealTime
×
×
  • Create New...