U.S. Stocks Tank On Wall Street Open - Forex News by FX Leaders
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U.S. Stocks Tank On Wall Street Open

Posted Thursday, May 9, 2019 by
Shain Vernier • 1 min read

Things do not look good for the U.S. indices as stocks have tanked on the Wall Street open. For the first 30-minutes of trade, the DJIA is off 300 points, the S&P 500 is down 35, and the NASDAQ is in the red by 120. The U.S./China trade war is becoming a hot one, with “no deal” being the popular phrase of the early session.

Today features several meetings between high-level U.S. and Chinese commerce officials. It is being widely reported that digital security and the protection of intellectual property are a main point of contention and threaten to upend negotiations. In fact, President Trump stated that China “broke the deal” in a Florida rally Wednesday evening and that 25% tariffs on an additional $325 billion in Chinese goods would be in play “shortly.”

Last week, it appeared the U.S./China trade standoff was in its final stages. It still may be, but the market volatility stemming from fresh tariffs and the ongoing negotiations is massive.

62% Fibonacci Retracement In Play For The NASDAQ

In a Live Market Update from earlier this week, I outlined the importance of the 62% Fibonacci retracement level for the NASDAQ. This morning’s plunge has taken values to this area and sellers are testing it with vigor.

June E-Mini NASDAQ Futures (NQ), Daily Chart
June E-Mini NASDAQ Futures (NQ), Daily Chart

Overview: Today’s crash has been news-driven and severe. The equities futures products are showing steep intraday downtrends with no relief in sight. At this point, U.S. stocks entering long-term corrective territory is a very real possibility.

For the time being, it is best to wait for these markets to calm before attempting to buy the dip. However, if price action in the June E-mini NASDAQ stalls near the 62% Fibonacci retracement (7506.50), then a Friday buying opportunity may set up. Stay tuned.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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