It’s a much different picture for the equity market this morning than it was yesterday, with futures indicating a sharply higher open. Just to reiterate our point from yesterday, though, we continue to expect violent moves both up and down throughout the trading day. On a positive note, JPMorgan, Citi, and Wells Fargo are all currently trading up on earnings. Hopefully, that initial positive reaction can hold.
After yesterday’s big decline, the S&P 500 closed 3.77 standard deviations below its 50-DMA, which is the most oversold reading for the index since August 2015! As shown in the chart below, occurrences of the S&P 500 trading 3.5 standard deviations or more below its 50-DMA are few and far between in the index’s history. Since 1928, there have only been 18 such occurrences.
Start a two-week free trial to Bespoke Premium to see today’s full Morning Lineup report. You’ll receive it in your inbox each morning an hour before the open to get your trading day started.