Trading on the S&P 500 was halted this afternoon after the circuit breaker kicked in following a 7% drop in the index this afternoon. This occurred as the CNN Fear and Greed Index registered a reading of 3. This figure is a reading that connotes extreme fear in the markets.
The halt came shortly after the S&P 500 index dropped 7% within the first few minutes of trading, triggering the NYSE circuit breaker that halted trading. The S&P 500 clawed back some of those losses when trading resumed, but it is still 5.5% in the red.
The rout of the S&P 500 index follows the collapse of crude oil prices by as much as 34%, as Saudi Arabia aims to flood the market with crude to provide discounts to its clients, initiating an all-out price war that will impact budgets of governments across the world.
A 13% drop will trigger the circuit breaker once more; this has never happened in the history of the S&P 500.
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The S&P 500’s downfall on Monday took it below the 2806.1 support line as it touched off the 2726.9 price level, seen on March 8, 2019 and April 13 2019. However, it has bounced off this level to take the index back above 2806.1 and closer to the 2853.8 resistance level. If the recovery continues above this level, then 2948 could come into focus.
On the flip side, an extension of the downside move towards today’s lows brings the S&P 500 dangerously close to the circuit breaker’s 13% drop trigger. A trip below the 2726,9 support line that is aggressive enough to push the S&P 500 down below the 2680 mark will bring the S&P 500 into a trading halt for the first time at the 13% drop level.