Markets are red again this morning.
The Dow is down 78 points. The NASDAQ is down 30, as the S&P 500 slips about 11. All as investors panic over the never-ending virus, and word from the Federal Reserve that U.S. growth slowed over the summer, according to the Fed Beige Book.
“The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most Districts, reflecting safety concerns due to the rise of the delta variant,” the Fed said, as quoted by CNBC.
Not helping, September is typically one of the weakest months of the year for markets.
“We see a bumpy September-October as the final stages of a mid-cycle transition play out,” Morgan Stanley chief cross-asset strategist Andrew Sheets said, as quoted by CNBC. “The next two months carry an outsized risk to growth, policy and the legislative agenda.”
In addition, technically, markets are still stuck in a tight range above its 50-day moving average, which has stood as strong support since February. If we fail to bounce from the moving average again now, markets could begin to crumble.
With weakness prevailing, let’s wait to see where markets decide to go next.
If we bounce off the 50-day, we can look at more long positions. If we begin to break down below the 50-day, we can look to trade volatility and other fear-based trades.