Confirmed: second quarter gross domestic product (GDP) numbers came in at negative .6% to finalize back-to-back quarters of negative GDP growth.

Recession momentum is growing as the average mortgage rate hit 6.7% this week, doubling in a year. Combined with economic fears associated with hurricane Ian and 40-year high inflation, the stock market was in tatters Thursday.

The Dow opened down, dropping by 500 points in the first 15 minutes. This erased most of the gains from the previous session. The Nasdaq surpassed Dow losses in early trading, dropping 3%, and the S&P 500 followed suit with a decline of more than 2%.

Latest GDP figures confirm recession in play

Despite the topsy-turvy morning, Simpler’s traders stayed with the game plan already in place.

The strategy is to play the daily moves as they happen – such as the relief rally on Wednesday – and hold to the longer term trend on the downside.

This formula is how traders stayed on the right side of the relief rally and were poised on the short side when the bottom dropped this morning. Every trade executed in this stock market environment focuses on this pattern.

Traders continue to focus on movement in the S&P 500 as the guidepost for price action across the board.

One market sector traders are watching is energy, particularly crude oil.

Reports are showing supply concerns out of Europe and there are issues with refinery production in California due to annual maintenance on facilities. While hurricane Ian shut down oil operations in the Gulf of Mexico for a short time, those facilities are now online.

WTI Crude (Nov. ‘22) was down slightly at $82.01 mid-morning today, yet has been rising in price the last three days. The commodity is still down from a high of $123.70 in early March.

Supply chain issues giving rise to price for crude may not surface in the near term, so traders are holding onto bearish sentiment ahead of the peak demand season this winter.