S&P 500: recovery from the shock

S&P 500: recovery from the shock

2020-03-10 • Updated

What happened?

The performance of the US stock market has been quite dramatic this week. S&P 500 dropped by 7% four minutes after the US trading session started on Monday. Then trading resumed, but the index stayed in the negative territory. Stocks fell on the growing fear of the economic impact of the coronavirus and the price that broke out in the oil market.

Economic stimulus

Tuesday brought some support for S&P 500 as President Donald Trump said that he will seek a payroll tax cut and “very substantial relief” for industries that have been hit by the virus. Apparently, the virus got closer to the President: he has been in contact with two Congressmen who are now in self-quarantine.

Trump said that he would provide details of his anti-coronavirus plan at a press conference on Tuesday. If he announces big steps, S&P 500 will cheer and get higher.

The prospects of recovery

Correction to the upside is a natural case after a big decline.

According to a research done by Bespoke Investment Group, S&P 500 has fallen by 10% or more on 10 other Mondays since 1952. Interestingly, it has gained more than 2.2% the next trading day in all of the 10 cases. In addition, on average, the index has returned 12.75% in the six months after the slump.

Of course, the previous history offers no guarantees for the future price action. Still the combination of this observation together with Trump speech has a chance of producing positive market dynamics.

The chart

S&P futures price is testing levels above February low at 2,853.25. Resistance lies at 2,975 (resistance line of the short-term downtrend, 50-period MA on the H4). Support is at the previous low of 2,695.   

S&P500-20HH4.png

Similar

S&P in the Сrosshairs
S&P in the Сrosshairs

Institutional investors speak about further growth in the stock market. In the exact market that has doubled since COVID-19 and doesn’t plan to stop. Is it possible?

Latest news

It’s Time to Look at New Zealand
It’s Time to Look at New Zealand

Inflation in New Zealand is the highest since 1990, edging to 7.3% in Q2 2022. The currency is under heavy pressure as the Reserve Bank of New Zealand is trying to reverse the inflationary spiral. The week ahead will give us a valuable clue about the country’s monetary policy, and we are here to talk about that.

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera