The Fed announced an emergency rate cut of ½ point today. Initially, traders jumped in to buy. That pushed $SPX $NDX $RUT to strong resistance levels, where they quickly formed bearish spires and dropped quickly. The actions put an end to Bounce1.
Just to refresh your memory, here are the phases so far in this Down Trend.
This was the case of “buy the rumors; sell the news”. Traders have been bidding up prices since Fri Feb 28 in anticipation of an emergency rate cut. The Fed delivered it, but it’s not as big as everyone was hoping for. Additionally, the message from the Fed made the market nervous. According to Bloomberg:
Even as the Federal Reserve chief delivered additional stimulus, he acknowledged that this easing is insufficient to solve the myriad economic and health risks posed by the coronavirus. That’s self-evident, but a message neither businesses nor consumers were ever likely to take in stride.
Support & Resistance Levels
The S/R levels below are short-term projections of important price levels. These are places where the majority of buyers and sellers are likely to lurk. You will want to pay attention to the change in price behaviors around these levels.
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Short-term Support & Resistance Levels
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