This was the third worst day in the S&P 500 since 1926. Equity markets experienced a crash lower, with circuit breakers tripping to pause selling both overnight and after the market opened.
This was the third worst day in the S&P 500 since 1926. Equity markets experienced a crash lower, with circuit breakers tripping to pause selling both overnight and after the market opened.
- 1: October 19th, 1987 – S&P 500 closed at 224.84 with a sell-off of 20.47%.
- 2: October 28th, 1929 – S&P 500 closed at 22.74, selling off 12.94%.
- 3: Today (March 16th, 2020) – S&P 500 closed at 2,386.13, bringing it down 11.98%.
The crash today came after the Federal Reserve announced a 100bps cut and $700B of new quantitative easing, as well as an emergency additional $500B in repo operations to liquefy Treasury (and credit) markets.
Nevertheless, the fear-driven selling brought the markets much lower, below a critical level of technical support at 2,400 on the S&P 500. Further down there is support at 2,000-2,100.
Below there the all time lows of the previous two bull markets that peaked in 2000 and 2007 would bring a support level of about 1,600. At this point the stock market is pricing in a severe recession and projecting COVID19 lasts for many more months, compressing revenues across the US, where 66% of economic activity is driven by consumption, and where many consumption habits have been put on pause indefinitely.
Source: Alexander Chamandy
From The TradersCommunity News Desk