While the number 1863 will always signify the turning point of the Civil War for me, the number has significance for stock traders as well. That’s a price level on the S&P 500 Index that held back during the late summer. While it was breached briefly Friday, the index closed above that level. If it’s breached, it could signal a significant air pocket from there.
Monday, in Asia stocks fell 0.8%, in Europe they fell 0.4%, while in the U.S., they closed virtually unchanged on moderate volume. Despite that, the VXO fell 17% to close at 22.96, and crude oil slid 5% closing at 31.41. With the relentless drop of stock prices so far this year, the bears are coming out of hibernation.
Tuesday, stocks in Asia fell 1.6% but they moved up in Europe 1.1% and up in the U.S. 0.5% on moderate volume. Precious metals miners lost 3%, crude oil slipped 3% to close at 30.58, and the 10-Year U.S. Treasury Bond yield fell 3% to close at 2.10.
Wednesday, stocks rose in Asia 1.8% and 0.4% in Europe, but in the U.S. they fell 2.1% on moderate volume. This brought the S&P 500 average below 1900. The VXO rose 14% to close at 25.29. The 10-Year U.S. Treasury Bond yield fell 2% to end the day at 2.07.
Thursday, stocks fell in Asia 1.8% and in Europe 1.5% while in the U.S. they rose 1.5% on moderate volume. This brought the S&P 500 index back above the 1900 mark again. Crude oil rose 2% to close at 31.56 as Bullard of the FOMC commented on how further decline in oil prices might delay interest rate hikes. The 10-Year U.S. Treasury Bond yield rose 2% to close at 2.10 while precious metals fell 2% and their miners lost about twice that amount.
Friday, stocks fell in Asia 0.6%, in Europe 2.8%, and in the U.S. 2.3% in active trading but nothing to write home about considering it was an options expiration day. The major indices also broke through more round numbers Dow, S&P, and NASDAQ fell below 16,000, 1900, and 4500 respectively. The VXO shot up 16% to close at 28.59. Crude oil slid 5% to close below $30 per barrel at 29.70. The the 10-Year U.S. Treasury Bond yield fell 3% to close at 2.03.