The S&P 500 lost more than 5% yesterday in its biggest one-day loss ever. Price action traded to a low of 2595.75. A 10% correction from the highs comes in at 2590. The bloodbath continued through last night and the S&P 500 hit our major four-star support directly on at 2524.75-2531.50 with a session low of 2529. Equity markets across the board are feeling the shockwaves from this rout; the DAX is down 2% this morning while the Nikkei is -4.73% and Hang Seng is -5.12%.
The S&P 500 settled at 2607.75 and has lost 7.6% since Thursday’s close. Today’s session stalled at a high of 2763, and failed to hold the key level at 2757, a trend line and Friday’s close. Price action began cascading below the overnight low of 2733 and all bets were off once our rare major four-star support at 2690-2700 was taken out.
Market mayhem, or maybe just a correction, is shattering nerves and causing crazy volatility. We saw the biggest jump in the VIX Volatility Index or fear index in history. Of course, when you're driven by fear and algos, it’s hard to find stability. Oil is being driven down by fear and not reality as demand so far is exceptional. Unless fear and mayhem take the focus of current reality, crude oil will come back big as long as we see stability in stocks.
The S&P 500 just failed the 20-period moving average on a daily chart, a monthly pivot, and a monthly camarilla pivot with a wide spread between fast and slow fisher lines, setting up a bounce and overhead retest. Also, there was a transient “dip buy” signal on an intraday chart that was merely a test with no “market internals” support-yet. Similarly, Bitcoin is in a technical position with bullish divergences and a hammer-engulf 4-hour chart candle rejecting a monthly camarilla pivot, or reflecting a good place for short sellers to exit with a buyback order on volume spikes. No guarantees of any reversals are made herein, though.
Not only is the dollar on the verge of a potential comeback, but there is the possibility that the Bank of England on Thursday might sound a lot less upbeat about the economy than the market currently expects.