By Markus Heitkoetter
￼Today was a bad day in the markets!
At some time, the Dow was down as much as 250 points and had its worst one-day loss in six weeks!
The S&P 500 erased its small year-to-date gains, and we’re now back to “no gains” for the year.
Here’s the scorecard for today:
Dow: 17,504.63, -197.59, (-1.12%)
S&P 500: 2,053.91, -21.09, (-1.02%)
Nasdaq: 5,025.92, -41.10, (-0.81%)
It was also an ugly session for commodities; gold fell to another five-year low, and copper dropped to a six-year low.
Crude oil fell more than 3% and traded as low as $41.59 per barrel!
So what’s causing these massive drops in the markets?
Looking at all the data, the only logical explanation is that traders are getting more and more concerned about an interest rate hike in December. There are several economists who believe that the economy is not yet strong enough to support an increase in interest rates and that THIS could bring the economic growth to a screeching halt.
As a result of the most recent decline in the markets, the S&P 500 is now trading below its 200-day moving average. Whenever the S&P500 is crossing the 200-day moving average and is trading below, it’s usually the sign of a downtrend!
So tomorrow will be an important day and they key question is:
Can the S&P500 bounce back and trade above the 200-day moving average tomorrow, or will it trade even lower and therefore confirming that we are in a downtrend?
Well, considering that the S&P500 moved lower in 6 out of the last trading sessions, it’s very likely that this trend will continue.
So let’s see what happens tomorrow…