- SPY fails to make new lows on Friday.
- SPY recovers into the last hour of Friday trading.
- SPY set to breach June lows on Monday.
It is all happening in financial markets these past few sessions with some amazing moves being seen in interest rate and forex markets. This is hurting all risk assets as investors rush for a flight to safety. So far Bitcoin has held up remarkably well in the face of such risk aversion, but other risk assets have not fared so well. Stocks continue into freefall with some more big moves on Friday. The June lows just about held for the S&P 500 (SPY), but the Dow Jones did manage to set a new low for the year on Friday. Surely it cannot be long before the S&P 500 and Nasdaq (QQQ) follow suit.
SPY news
This morning saw more spectacular moves in fixed income with the yield on UK debt soaring by over 50bps and sterling completely collapsing. This is driving more risk aversion and will not in all likelihood see a rally in risk assets just yet. European equity markets remain under pressure as a result. Participants hoping for a bounce are unlikely to see one just yet. With UK interest rate markets now pricing in 200 bps of rate hikes by November, it is dragging all other bond yields higher as a result. US 2-year is up again in early trading, and this is likely to keep equities pressured. It is all eyes on the dollar at present as it puts pressure on sovereigns as well as corporates. These huge moves will increase pressure on company margins and likely see more disappointing earnings in Q3.
SPY forecast
$362 remains the June low that is likely to be broken on Monday. The question then becomes how much lower do we go and whether there is any bounce in sight. The answer is there is always a bounce at some stage, but the timing is difficult. The sentiment is terrible, and investors are in panic mode. Various indicators show this. Perhaps the most widely known in the CNN Fear & Greed Index.
Source: CNN.com
$352 is the next support if $362 is broken. The Relative Strength Index (RSI) is getting close to an oversold indication but is not yet there.
SPY daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD trims a part of intraday losses, down a little below 1.3200 ahead of BoE
The GBP/USD pair finds some support near the 1.3150 region on Thursday and for now, seems to have stalled its retracement slide from the 1.3300 neighborhood, or the highest level since March 2022 touched the previous day.
EUR/USD flat lines above 1.1100 after Fed's bumper rate cut
The EUR/USD pair trades flat during the early European session on Thursday. The major pair initially edges higher to monthly highs of 1.1189 after a large rate cut by the Federal Reserve at its September meeting and eases back to near 1.1120.
Gold defends $2,550 in the Fed’s aftermath, ahead of US data
Gold price is defending $2,550 early Thursday, catching a breath after intense volatility witnessed in the aftermath of the all-important US Federal Reserve monetary policy announcements and Fed Chairman Jerome Powell’s press conference.
Bitcoin surges to $62,000 mark after 50 bps Fed rate cut
Bitcoin and Ripple eye for a rally as they break and find support around their resistance barrier. Meanwhile, Ethereum demonstrates signs of recovery as it approaches a critical resistance level, indicating that an upward rally could be on the horizon if it successfully breaks through.
Australian Unemployment Rate expected to hold steady at 4.2% in August
The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.