9/30

Three Consecutive Quarters of Selling

Quarter three has officially concluded; with eight of the last nine trading days closing negative, the bearish sentiment picked up down the home stretch leading to another red quarter.

This marks the third consecutive quarter to expire with the market lower than where it started. The losses thus far through three quarters in the market have been significant enough to completely wipe out all of the gains made in the previous year, 2021.

A look into Q4

With just one more quarter left in the year, the trend will change and reduce this year’s losses or keep cutting into the gains made in the latter half of 2020.

On the downside, the S&P 500 has a significant target of 3,400. This is a reflection of where the price was previous to the reaction of Covid in February 2020.

Today’s rollercoaster of price action

Fridays price action was an up-and-down rollercoaster. The market began with an uptrend, but like any favorite rollercoaster, the slow and steady trickle-up led to a decline back to reality. 

The opening bell sounded, and the market had a quick drop that was quickly recovered. The rest of the morning consisted of a steady flow of declining buying volume. 

The declining buying volume eventually ran thin, allowing the selling pressure to overcome the current short-term direction of the market. Once the sellers stepped in, the opposite of the morning drive became true. In the second half of the day, there was an increase in selling pressure as the previous low of the year approached. 

These small notes of market behavior can help a trader gain an edge if used properly. These are tips and tricks that traders in our live-trading online chat room help digest constantly throughout the trading session.

Selling heats up into the close

The day ended with the volume of sellers increasing as the S&P 500 broke the previous low of the year made on Wednesday. The Previous low was made outside of cash session hours, making this new low even more significant. Heading into the weekend, the year’s bottom now resides at 3,595 on the S&P 500.

The S&P was not the only index to break significant lows as the Nasdaq officially joined the party. Before the final flush of the week, the Nasdaq had been able to hold above the previous low of the year at 11,068.5. This level will be an interesting tell when the market opens again. If the Nasdaq can recover this level and hold a short-term cover rally could ensue, but if not, the sentiment for the market could get even worse. 

The stock market finishes red again

At the close, both the Nasdaq and the S&P 500 futures were negative. The S&P 500 futures closed down 1.32%, losing 48 points, while the Nasdaq futures closed down 1.53%, a loss of 170 points.

The S&P 500 suffered the worst monthly decline since March 2020, falling 9.3%