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#1 24-03-2020 14:26:37

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2801

Selling in US to continue, but with presence of national guard

Selling in US to continue, but with presence of national guard

Sunday night set the tone for all that will follow in the world. Not only in the markets through fiscal action, but also in daily life through political decisions. Just last week, the FED announced a new interest rate cut. Leaving the base rate at 0. This decision was followed by the announcement that the nation would also consider adding a $1.1 trillion stimulus package to help ease pressure on markets and consumers. The following week, several other countries announced similar measures, including the U.K., where Sunak presented large stimulus measures.

This weekend, Donald Trump announced that he would send the National Guard to 30 states across the country, including New York, which alone has more than 14,000 cases of Corona (the virus, not the beer!). This decision aims to implement "social distancing" measures. This measure has led to huge sales on futures markets because short sale orders are limited, which has had the effect of interrupting trading. According to the futures markets, this week may a record-breaking one.

Impacted Markets

NASDAQ futures

This index, which includes many technology stocks, lost over 500 points in futures trading at the time of the announcement. The drop, which occurred shortly after the futures markets opened on Sunday night, saw the markets limit their decline, a term that many have been experiencing for the past few weeks as the bearish volume has overwhelmed the markets to the point of temporarily closing them. To better understand this, it is as if the entry into a bus station was limited due to overcrowding, leading staff to limit the entry of new riders until the service was properly regulated.

As shown in the below chart, this worked, after encountering a vacuum and giving the order for a limit drop, the markets began to consolidate at a price of 6734. Today, many are looking to the United States to see if consolidation will stop or if there will be further downward pressure, as government imposed measures are destabilising the idea of "going back to normal".

NASDAQ hourly chart:

S&P 500 futures

The Standards & Poor index, better known as the S&P 500, was another of the indices that was under pressure. The decision to appeal to the National Guard and the advice to "stay put at home" meant that many consumer businesses were forced to close their doors. As a result, we see the extent to which the markets reacted in the below chart.

Another variable influencing price movements is the inability of the Senate to agree on what the stimulus package should be. The lack of a firm commitment has meant that although markets have been told that "assistance is coming", the form of help has not been agreed upon, which translates into an impasse for all involved.

NASDAQ daily chart:

Based on the above factors, many may be concerned that the same thing could happen in many other nations, with military reinforcements on the way to help enforce curfews as a means of reducing the spread of the Corona disease.

"Anything worth having is worth going for - all the way." - J.R. Ewing



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