SPDR S&P 500 ETF Trust SPY Stock News and Forecast: Ukraine crisis continue to haunt

Update: SPDR S&P 500 ETF Trust (SPY) snapped its five-day winning momentum and ended in the red on Monday around $436. The negotiations between Russia and Ukraine ended with no progress, leaving no incentive for traders, although another round of talks is seen ‘in the coming days’. Uncertainty and hostilities still remain on the Ukraine crisis, keeping investors unnerved.

Global financial markets remain in a risk-averse tone as the rhetoric continues to ramp up from both sides in the escalating Russia-Ukraine conflict. European markets have taken the latest news poorly and are down sharply this morning. Germany's Dax was nearly 3% lower earlier this morning and the benchmark Eurostoxx 50 is currently 3.3% lower. US futures are not quite as negative with the S&P looking like it will open about 1.5% lower with the NASDAQ suffering a similar fate at Monday's open. 

S&P 500 (SPY) stock news

The rhetoric has been elevated by Russian President Putin placing his nuclear deterrent forces on high alert. This has significantly escalated the crisis and we may be facing another Cuban Missile Crisis type of moment. Naturally, global stock markets have reacted negatively to the news, while the dollar, oil, gold and European natural gas prices all surged. Europe is now looking more and more likely to slip into recession as this conflict progresses. European natural gas futures are now up 12% on Monday, having spiked over 50% on Friday. Meanwhile, Germany has pledged to raise its defense spending in response to the conflict, which could set the stage for a new cold war. At this stage, a cold war would be a positive result in the minds of most. Money markets are continuing to get more and more dovish with bets for a 50bps Fed hike in March now almost completely diminished and predictions for the ECB to raise this year also diminishing. 

S&P 500 (SPY) Stock Forecast

As mentioned geopolitical events are key, but technical levels have still been working well. The Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) both remain in a strong downtrend, thereby confirming the SPY price decline. Neither are oversold, so we may have more downside to come, albeit with volatility. $414 just about held on Friday, and this level is significant as below is a volume gap until $399. A break may see a quick move there. The trend remains strongly bearish despite the powerful rally on Friday, but even this failed to break the 9 or 21-day moving averages. Not that powerful after all. 

S&P 500 (SPY) chart, daily

For shorter term, intraday or swing traders, the pivot is $439. Above here SPY is bullish and enters a light volume zone or gap until $446. Below $439 though there is small support at $435, which if broken opens the door for a move to $425. Breaking $425 brings $417 as the next target for support and then $411.

S&P 500 (SPY) chart, 15-minute

Previous updates

Update: Heading into the US close, the picture in financial markets remains the same, with speculative interest flying to safety as the Russia-Ukraine conflict escalates. Peace talks took place on Monday, but Russia resumed bombarding Ukraine ahead of Wall Street's close, maintaining equities under strong selling pressure. US indexes enjoyed a short-lived relief after the opening, currently approaching intraday lows. The S&P 500 (SPY) is down 1.27%, trading at around $432.20. 

Update: After opening lower and dropping a bit over 1% in the first hour of trading, the S&P 500 (SPY) has made a middling comeback in the second hour of Monday's New York session. At the time of writing, the S&P 500 is down 0.5%. Though the Dow and S&P 500 remain in the red, the NASDAQ composite has risen 0.3%. Investors are beginning to dip their toes back into equity markets despite a poor index futures reading this morning. SPY traded down to $432 in the first hour but is now trading just below $436. SPY closed on Friday at $437.75.