The past two weeks likely proved challenging for many traders.
Headline risk and sluggish global economic data made for choppy price action in equity indexes, including abrupt intraday moves that alternately squeezed shorts and sent bulls reeling. Since the Aug. 2 close, S&P futures were down over five percent after starting the week with news of a weakening Chinese yuan. The /ES next failed to break above resistance near the 2,935 level, despite a dramatic surge upward on Thursday after reports that some Trade War tariffs may be delayed. This optimism was promptly dashed on Wednesday by a 2 & 10 year yield curve inversion and poor economic results from Europe and China, which ushered in a 3.27% plunge.
Thursday saw modest gains, but also more zigzagging prices as a hot U.S. Retail Sales report contrasted with tepid Industrial Production numbers. Today, the 2 & 10 yield curve has uninverted and seems to be lifting market spirits, with the /ES now down only about 2% since Aug. 2. However, bulls still need a convincing move above the 2,835 level, while a break below support near 2,820 could be a sign for bears to pounce.
Image Sourced from Pixabay