Tuesday's Market Minute: Relief Rally Brings Little Relief

The extreme volatility of the past two weeks continued yesterday. Stocks saw their worst day since 2008 with the S&P futures contract sinking more than 7.75%, and other equity indices showing similar sharp declines as traders continue to assess the effects of coronavirus. But news of possible tax cuts and economic relief from the White House spurred whipsaw movement in the premarket, sending the /ES surging back up over 4% to reclaim some of yesterday's lost ground. The contract found a bottom at 2695.25, while the RSI briefly dipped into the oversold area before rebounding. If stocks see continued downside, 2640 was often a point of support during 2018. Crude Oil futures are also finding some relief this morning after the WTI contract was devastated yesterday to the tune of -27.25% after OPEC+ and Russia were unable to meet a deal on production cuts. The move sent shockwaves through the energy sector, shattering crude's support near 42.20 and spurring the RSI to a deeply oversold 13.67. The /CL contract is up about 8.5% in premarket trading, with traders likely eyeing the 2016 lows near 26.05 for possible support. Despite this morning's rally, the global economy and the coronavirus situation still seem precarious – trade with caution and keep appropriate position sizing.

Image Sourced from Pixabay