SPY Gaps Down by Weekday
US equity futures were already significantly lower on earnings weakness from Meta (META) prior to the 8:30 AM ET release of today’s key economic indicators, but they took another leg lower after Q1 GDP came in much weaker than expected and PCE came in hotter than expected. Weaker economic growth and higher inflation are certainly not bullish for equities.
With about 15 minutes to go before the opening bell at 9:30 AM ET, the S&P 500 ETF (SPY) is trading down more than 1% in the pre-market.
Below is a look at all prior gaps down of 1%+ at the open for SPY since it began trading in 1993. This would be the 352nd opening gap down of 1%+ for SPY in the last 31 years, and on average, SPY has traded up 0.09% from the open to the close on these days with positive returns 51.4% of the time.
This would be the 68th time that SPY has opened down 1%+ on a Thursday, and on Thursdays specifically, SPY has averaged an open-to-close decline of 0.10% with positive returns 47.1% of the time.
As shown in the table, Friday gaps down of 1%+ have historically been followed by the biggest intraday bounce-backs (+0.39%), while Monday has been the worst weekday for bounce-backs with an average open to close decline of 0.20% after 1%+ gaps down.
This will be the 14th time that SPY has gapped down 1%+ during the current bull market that began in October 2022. On these days, SPY has averaged an open-to-close gain of 0.21% on days when it gaps down 1%+. (That makes sense, though, since it’s a bull market.)
Chart of the Day: Financials Rally; SMCI vs. WHR
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The S&P 500 has formed a downtrend that is clear as day over the last three weeks, as shown in the 15-day intraday chart of the index below:
As we noted in last night’s Closer, the S&P 500 ETF (SPY) has opened higher and then closed down from that opening level for four straight trading days. This is a reversal from the intraday strength that we generally saw during the slow-and-steady rally seen from last October through March.
This morning, at least, it looks like SPY is set to open lower, and bulls will be looking for that gap down to be bought.
We discussed the Israel/Iran conflict in more detail in this morning’s Commentary, but notably, oil prices have pulled back significantly after an initial spike on news that Israel was indeed retaliating against Iran last night. Oil popped 4% on the news last night, but it’s down 5% from those levels and now trading lower on the day. You can see this action in the candlestick chart of oil below. For now, oil’s 50-day moving average has still not been breached.
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