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U.S. Markets Can’t Stop The Bleeding

The lead story in finance continues to be the coronavirus-led meltdown in the global equities markets. On the U.S. side of the ledger, selling has defined another session and extended weekly lows. A little over halfway through the Wall Street trading day, the DJIA DOW (-485), S&P 500 SPX (-40), and NASDAQ (-45) are once again deep into the red. Following the record daily losses of Thursday, it has been a “no-quarter Friday” for American stocks.

Aside from coronavirus headlines, there were a few economic numbers out during today’s pre-market. Here is a quick look at the highlights:

Event                                                                    Actual      Projected     Previous

Core Personal Consumption (MoM, Jan.)         0.1%            0.2%             0.2%

Personal Consumption (MoM, Jan.)                   1.7%             1.7%             1.5%

Personal Income (MoM, Jan.)                              0.6%             0.3%            0.1%

Michigan Consumer Sentiment Index (Feb.)    101.0             100.9           100.9

All in all, today’s numbers for the U.S. economy were fairly strong. Consumption remained steady, with a slight uptick in personal income and consumer sentiment. This is another solid set of figures that is taking a back seat to coronavirus hysteria. At least for the time being, the markets are choosing to price in the worst-case NOVID-19 scenario in favor of decent fundamentals. 

Also, it looks like the heightened chance of FED rate cuts are being ignored. Currently, market fundamentals and quantitative easing are playing second-fiddle to momentum algorithms.

U.S. Markets Continue To Fall, Equities Enter Correction

A stock market correction is defined as being a 10%-20% pullback from a periodic high. The negative price action of the past week has sent the U.S. indices officially into correction.

March E-mini S&P 500 Futures (ES), Daily Chart
March E-mini S&P 500 Futures (ES), Daily Chart

Overview: In a Live Market Update from Thursday, I issued a long scalping recommendation from just above 3000.00 in March E-mini S&P 500 futures. The trade was a miserable failure, losing a quick 24 ticks. The 3000 psychological barrier was instantly swept off the board, paving the way for an epic late-day selloff.

At press time, the indices are well off the intrasession lows. However, this was the case yesterday ― values rallied before they plunged. Sentiment continues to be extremely negative and it will be a surprise to see anyone going home long stocks over the weekend. Until we see some hard evidence of bearish trend exhaustion, any buys in the S&P 500 are extremely high risk.

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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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