Stocks Have Worst Day Since the Global Financial Crisis as Oil Falls 25%; Expect Volatility to Continue - Chaikin Analytics

Stocks Have Worst Day Since the Global Financial Crisis as Oil Falls 25%; Expect Volatility to Continue

US equities were sharply lower in Monday trading, ending near the worst levels after tripping a circuit breaker just after the opening. The oil selloff on the Saudi price war and continued downbeat coronavirus headlines kept stocks under pressure. All sectors were lower on the day. Treasuries extended their  rally. The dollar was weaker on the major crosses, particularly against the yen. Gold finished up 0.2%. WTI crude settled down 24.6%.

  • Outperformers: Consumer Spls. (4.41%), Healthcare (5.19%), Utilities (5.64%), Consumer Disc. (6.19%), Communication Svcs. (6.21%), REITs (7.08%), Tech (7.56%)
  • Underperformers: Energy (20.08%), Financials (10.93%), Materials (9.26%), Industrials (9.20%)

S&P futures are up 4.5% after US equities sold off sharply on Monday, suffering their biggest one-day decline since 2008. Asian equities were higher overnight. European markets are seeing big gains. Treasuries are under pressure with the curve steepening. The dollar is stronger on the major crosses with best gains coming against the yen. Gold is down nearly 1.0%. WTI crude is up 9.6%.

Sector Power Bars

There is currently one sector with a Power Bar Ratio which is stronger than that of the SPY and is bullish.

Take-Away: There has been a massive flight to safety in the market over the past week that accelerated yesterday with the 25% collapse in the price of oil. Some of the moves have been extreme prompting me to ask if that was a capitulation.  

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