Market Direction Mid Week: No Daylight

The trading strategy this website uses as its signature tool is our bullish and bearish alerts. This indicator has effectively been used with accuracy since 2011. The website helps our followers stay in tune with the stock market and profits have been amazing. This post provides a mid-week update on how the stock market has preform. At the bottom of this post are the all-time numbers since the current alert was made. The current bullish alert is moving in the right direction.

Market Direction: BEARISH alert issued 2/27/2020

 

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U.S. stocks finished sharply lower again Wednesday, but off session lows after Congress passed the first of two planned bills providing some relief from the economic damage the coronavirus pandemic is inflicting on businesses and consumers.

The Dow Jones Industrial Average shed another 6.3% and has now erased most of its gains since President Donald Trump’s inauguration on January 2017. The benchmark S&P 500 index fell to close at its lowest level since December 2018.

How did stocks perform?

The Dow Jones Industrial Average DJIA, -6.30% tumbled 1,338.40 points, or 6.3%, to settle at 19,898.92, its lowest close since Feb. 2, 2017. The S&P 500 SPX, -5.18% dropped 131.09 points, or 5.2%, to end at 2,398.10. The Nasdaq Composite COMP, -4.70% slipped 344.94 points, or 4.7%, to finish at 6,989.84.

Year-to-date the Dow is down 30%, the S&P 500 is down 26% and the Nasdaq is off 22%.

What drove the market?

Stocks skidded on worries that the coronavirus pandemic will mean a prolonged lockdown of several nations, potentially leading to defaults not just across major corporations but also small businesses that may struggle to survive a sharp drop in revenues over the next few months.

“What’s scaring the American people and corporate America now is the gradual rollout” of business closures, said Bill Ackman, chief executive officer at Pershing Square Capital Management.

Late in the session news that the U.S. Senate voted to approve a House-passed coronavirous bill that targets paid leave and free COVID-19 testing helped stocks recover some ground.

Earlier, U.S. Treasury Secretary Steven Mnuchin said the government is working on some $1.3 trillion of emergency funding, as well as other measures, to businesses and workers “right away,” in a CNBC interview.

But investors are still waiting for some evidence that the growth of global Covid-19 infection rates is peaking. Infection rates in China peaked in late February but the number of new cases is still rising in Europe and the U.S.

Read: Treasury Department proposal aims to deliver $500 billion to Americans starting in April

The S&P 500 has swung 4% or more in either direction for seven consecutive sessions through Tuesday’s close, topping the previous record of six days from November 1929, according to Dow Jones Market Data.

“When you decimate the restaurant industry, the travel industry, the hotel industry, the airline industry, and the cruise line industry, obviously you’re going to take a huge divot out of economic activity,” DoubleLine Capital CEO Jeffrey Gundlach said on a webcast Tuesday.

The Federal Reserve, after moving to cut its policy interest rate to nearly zero on Sunday and reviving some of its programs from the 2008 crisis, late Tuesday unveiled a commercial paper facility aimed at providing a liquidity backstop to businesses short of cash.

“Unexpected things will break and we will just have to be mindful of that,” Stephen Lee, founding principal at Logan Capital Management, told MarketWatch. “As investors, we need to get back to basics and know what we own.”

As stocks fell, U.S. Treasurys also sold off, pushing yields up, as investors sold liquid assets and worried about a flood of new government borrowing. Crude oil prices sank 24% to an 18 year low, the U.S. dollar rose for a seventh straight day, and the British pound hit its lowest level against the greenback since 1985.

Read: How the Fed’s latest crisis-era credit facility aims to finally calm rattled markets

How did other markets trade?

April futures for West Texas Intermediate crude CL.1, 8.198%, the U.S. gauge of oil prices, plunged more than 24% to settle at $20.37 a barrel on the New York Mercantile Exchange. April gold GCJ20, 0.528% lost $47.90, or 3.1%, to settle at $1,477.90 an ounce, following a climb of 2.6% on Tuesday, a move attributed to investors needing to dump assets to cover margin calls.

In currencies, the ICE U.S. dollar index DXY, 0.127%, which tracks the greenback’s performance against a basket of its major rivals, was up 1.4%. Investors say the rush for liquidity and dollar funding has helped the dollar erase its initial drop at the end of February.

Global equity markets finished lower on Wednesday. The STOXX Europe 600 index SXXP, -3.92% slumped 3.9%, while the U.K.’s FTSE 100 UKX, -4.04% was down 4.1%.

$tockMarketDirection proprietary model is currently BEARISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at  $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with friends.

The all-time lows since our initial recommendation to go SHORT this market. Here is how the markets have performed:

Stock Market Direction Recommendation (2/27/2020)
Dow	down 6,848.58 points a 26.58% gain	3/18/20
Nasdaq	down 1880.12 points a 21.95% gain	3/18/20
S&P 500	down 698.24 points a 23.44% gain	3/18/20

Related Link: http://www.stockmarket-direction.com/