Shares, oil, corporate bonds and cryptocurrencies - losses were observed everywhere, which eventually resulted in one of the worst sessions since 2015.
The stock market was losing the second day in a row deepening the correction of major US indices, including the SP500. Crude oil reached levels last seen twelve months ago, while credit markets - which have recently been resilient to turmoil in other sectors - also showed signs of slow decay. Alternatives can also be found for free in Bitcoin and other cryptocurrencies, and investors in a panic-focused mainly on yen and gold, which seem the most stable.
Summing up the above - Tuesday's session brought a 2-percent drop in the value of shares, a 6-percent drop in the value of crude oil, depreciation of the corporate bond market - overall presenting one of the weakest sessions in three years. The SP500 has zeroed this year's profits, the oil deepened the bottoms, and the ETF tracking junk bonds has recorded the most dynamic depreciation since 2014.
Although you still do not see any signs of panic yet, most traders are convinced that the dynamic declines will stay in the short term. Behind the losses in many markets is fear for the future. Corporate profits, fuel for the longest bull market in the history of US equities, seem to have peaked, and the Donald Trump trade war does not show signs of weakness. Despite the gloomy signals coming from the market, Jerome Powell Federal Reserve is still going to raise interest rates in December, which is a serious pain for corporate bondholders worth about $ 5 trillion that has been sold by SP500 in the last decade.
Let's now take a look at the SP500 technical picture at the H4 time frame chart. The market has bounced towards the level of 267.06 in order to fill the gap between the levels of 267.00 - 268.15. The oversold market conditions and positive and strong momentum are supporting the short-term bullish outlook, but the price is still trading below the dashed blak trend line. Only a breakout above this line would put the bulls back on track to regain the control over the market.
