Thursday's Market Minute: Markets Spooked Into Halloween Weekend

Bullish equity traders have likely gotten some Halloween scares this week, particularly with yesterday’s 2.78% rout in S&P 500 futures. After an almost 8% decline from the Oct. 13 highs, the /ES now finds itself in the rare situation of seeing 11 red candles during the previous 12 days. The drop got especially vicious into the close yesterday on heavy volume.

Going back to Oct. 13 again, 79% of S&P 500 companies were trading above their 50-day Simple Moving Averages; now only 28% are as of yesterday’s close, suggested widespread selling.

From a technical perspective, the Moving Average Convergence Divergence (MACD) shows bearish momentum continuing to rise, while the Average Directional Index (ADX) turning upward from a trough suggests a strengthening downward trend. In terms of important price levels, the /ES already has given up many of the common moving averages.

The next major one to the downside is the 252-day Exponential Moving Average near 3135. Beyond that, the yearly Linear Regression line is near 3289, and a move below 3198 would mean a breach of September’s lows.

Photo by Neven Krcmarek on Unsplash