Wall Street Close: The US equities markets can't shake the COVID-19 bug

  • The Dow tanks 2.84%, 730 points lower on Friday. 
  • The S&P 500 drops 2.40% and the Nasdaq falls 2.59%.

It was another tough day on Wall Street as the coronavirus pandemic continues the bite the US economy. Texas and Florida are forced to scale back plans to reopen parts of the economy as the number of cases continues to rise. The US sent out US Economic Advisor Kudlow to try and ease some of the panic and he stated every number is showing a "v shape" recovery for the US. Interestingly, this week the Fed managed to shrink its balance sheet for the second week in a row. We have not been able to say that in a while. The US could have a solution to this as Larry Kudlow the Director of the United States National Economic Council stated the US will go back to congress to look for more tools. 

Facebook (-8.31%) was one of the main losers on the session as Unilever confirmed they would be taking a break from advertising on the platform. Unilever is responsible for some of the biggest brands in the world including Lynx, Walls, Ben & Jerry's and PG Tips. 

American Airlines closed the week 22.75% lower after the travel sector was hit hard with all the coronavirus news. Internal flights will also be hit hard as New York imposed quarantine rules on people coming into the sate from hotspot areas.

Main COVID-19 headlines

San Francisco Mayor Breed is to delay reopenings planned for Monday as SF virus numbers are `Low But Rising Rapidly'.

US CDC reports 40,588 new coronavirus cases as of yesterday - total cases now 2,414,870 Vs 2,374,282 in previous report.

Arizona’s COVID-19 cases rise to 66,458 Vs 63,030 yesterday

Texas Governor says that bars and taverns must close immediately. 

In commodities news, the Baker Hughes rig count data showed that the rate of change in terms of closures seems to be slowing. A second wave could be a problem but WTI prices around USD 40 per barrel seem to be favourable for now. 

S&P 500 4-hour chart

The S&P 500 has broken the dominant trendline on the 4-hour chart below. The main support level on the chart is now the red line at 2963.50 just under the psychological 3000 level. 

The Relative Strength Index indicator has already moved into the oversold area and pulled back up. Now there is still some space to move back to the downside. Analyst's that focus on Elliott Wave and Dow Theory will be watching the red support carefully as the market could make a new lower low lower high formation if the support breaks.

Therefore next week is pivotal and the NFP data and Chinese manufacturing numbers could be the catalysts for the move.

S&P 500 technical analysis

Additional levels

SP 500
OVERVIEW Today last price 3019.25 Today Daily Change -65.75 Today Daily Change % -2.13 Today daily open 3085
 
TRENDS Daily SMA20 3108.74 Daily SMA50 2980.02 Daily SMA100 2919.53 Daily SMA200 3024.9
 
LEVELS Previous Daily High 3090.5 Previous Daily Low 3016.75 Previous Weekly High 3167.5 Previous Weekly Low 2936.5 Previous Monthly High 3069.5 Previous Monthly Low 2768 Daily Fibonacci 38.2% 3062.33 Daily Fibonacci 61.8% 3044.92 Daily Pivot Point S1 3037.67 Daily Pivot Point S2 2990.33 Daily Pivot Point S3 2963.92 Daily Pivot Point R1 3111.42 Daily Pivot Point R2 3137.83 Daily Pivot Point R3 3185.17