Wild Market Swings: Day of High Stakes, Heavy Action

Wild Market Swings: A Day of High Stakes and Heavy Action

After a sharp decline in yesterday’s trading session, the futures market worked to recover some of the losses during the overnight session. The S&P 500 futures gradually rose towards critical levels of the 21-day Exponential Moving Average (EMA) at 3,987 and the psychological level of 4,000. The market was poised for a significant move off the critical area, and the release of lower-than-expected weekly initial jobless claims figures of 191,000 at 8:30 a.m. Eastern provided a positive signal for the market.

Despite the positive initial jobless claims figures, the market remained unresponsive, unlike previous job reports. The lack of movement was likely due to the impact of the Federal Reserve (Fed) interest rate hike announcement from the previous day. The market is still processing the effects of this announcement and waiting for further news to prompt significant action.

At the opening bell, the S&P 500 futures continued to hold above the 21-day EMA and pushed toward the psychological 4,000 level. Once it surpassed this level, the market experienced a surge in buying volume, resulting in a sharp upward trajectory. The Nasdaq futures led the way with a strong upward momentum, buoyed by technology giants such as Apple Inc. (AAPL), Google (GOOGL), and Netflix Inc. (NFLX). The market’s upward movement was driven by vigorous efforts and heavy volume at critical levels.

What Comes Up Must Comes Down

The S&P 500 futures encountered a resistance level that proved too difficult to overcome, as it hit the 50-day Simple Moving Average (SMA) and established lower highs. This indicated a reversal in momentum, and the market ultimately experienced a sell-off. During the sell-off, the market briefly bounced back towards the psychological level of 4,000, but selling pressure intensified, causing all indices to drop to a new low for the day, breaking the 21-day EMA. The market then targeted the mini psychological level of 3,950 and the 200-day SMA at 3,945 for support.

Interesting Action to End the Day

Notably, the market experienced a surge in volume at the low point of the day, indicating significant Wall Street players are actively involved at this chart level. Given their positioning, it is possible that some institutions may not want the market to fall much below 3,950. This level is a crucial area of interest for long opportunities, provided that big money continues to support it. However, if the market fails to hold this level, a more substantial market move may be on the horizon.

Market Falls Hard but Ends Green

The Nasdaq and the S&P 500 were positive to close the session. The S&P 500 futures closed up 0.13%, adding 5 points, while the Nasdaq futures closed up 1.01%, gaining 127 points. The Dow Jones futures followed, closing up 0.11%, an addition of 11 points.