The day was a disaster for the bulls. The night session prior to the open saw E-minis falling by -40 points after Federal Reserve Chair Powell answered questions after the rate decision released on Wednesday.
As the open approached, futures continued to fall as reports of spikes in coronavirus victims in cities that reopened started to come in. The projected US death toll was adjusted to above 200,000, and this sent the Minis down -80. This lead to the Dow Jones futures indicated a projected open of 1,000 points lower.
The market opened as expected with most stocks down slightly. The travel stocks (Boeing, Carnival Cruise, Airlines, etc.) were hit harder than the rest of the stocks as traders anticipated a second “lock-down” coming DESPITE VP Pense saying there would not be a second lock-down.
As the day progressed, people had time to think about the bowels of hell we just emerged successfully from, and started getting nervous for fear it could be a round-trip ticket. Inching closer to the 200-day MA just above SPX 3,000, the market seemed destined to test both numbers – and it did.
The night before I anticipated selling based on the previous day's close where the Fed gave the insatiable junkie traders more stuff to get high on, and yet the market closed lower on the day. This never bodes well.