With the potential second virus wave and a lockdown, US stock futures could slide lower. Short SPX/USD?
- With the potential second virus wave and a lockdown, US stock futures could slide lower. Short SPX/USD?
- Dow fell 6.9%, or 1861 points last night – its worst day since 16 March.
- On the other hand, the S&P 500 fell 5.59%, or 188 points. It is currently at the 3050-price level.
- In addition, the CBOE Volatility Index VIX rose jumped by almost 50%, its highest level since 21st April. VIX is well known as Wall Street’s fear gauge.
- The sudden and drastic fall in the US stock futures was due to mainly two reasons:
1) Fed’s grim economic outlook from its meeting on Wednesday.
2) Resurgence in coronavirus infections in half a dozen states in the US. - However, Trump administration pushed back the idea that it would allow the economy to shut down again even if coronavirus cases continue to rise.
- This would dampen the economy recovery in the longer term.
- We believe that the S&P 500 still have further room to fall compared to the other 2 US stock futures. SPX/USD could slide lower towards 2930 to test the 61.8 Fibonacci retracement level.
Fullerton Markets Research Team
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