We use cookies to offer a better browsing experience, analyze site traffic, personalize content, and serve targeted advertisements. By clicking accept, you consent to our privacy policy & use of cookies. (Privacy Policy)

S&P 500 Slides Over 7%; Triggers Trade Halt Mechanism Again This Week

S&P 500
S&P 500

The S&P 500 index opened to a steep drop below 7%, triggering the trade halt mechanism for the 2nd time in a week. The hefty selloff is a direct consequence of the suspension of all flights from Europe into the US, as governments all over the world battle to stop the coronavirus pandemic. 

US President Donald Trump announced the travel ban yesterday, in a speech that spooked stock markets worldwide. The ban has the potential to be an economically damaging, but albeit necessary step to stop the cross-border spread of the coronavirus, which is now turning up in countries which are far-flung from the epicentre of the pandemic in Wuhan, China. Air and sea travel is no doubt contributing to the spread of the disease, but with no palliative measures being announced in the wake of the travel ban, the S&P 500 has taken the news very badly indeed. 

The S&P 500 now trades at 2526, well below the day’s opening/high price of 2964.4. Many constituents of the index are down, including Boeing stocks which are having the worst run possible in decades.

Read our Best Trading Ideas for 2020.

Technical Outlook for S&P 500

Today’s decline has seen the S&P 500 take out support levels at 2853.8, 2806.1, 2726.9 and 2619.7. The support at 2550.7 is now undergoing a vigorous challenge by sellers. Continuation of the selloff breaks the support level and opens the door towards the support price below 2500 at 2479,7 and 2401.9. 

On the flip side, the price may experience a recovery if 2550.7 holds firm, with a possible retest of broken support levels now acting as resistance areas. Such resistance price levels include 2619.7 and 2726.9, the latter of which is close to the 23.6% Fibonacci level of 2715.9 if the trace from the swing high of Feb 10 to today’s swing low is considered. The bias remains strongly bearish, so any price recovery could be opportunities for sellers to do their thing at what may be considered as bargain re-entry sell points.  

Don’t miss a beat! Follow us on Telegram and Twitter.

More content