WHO Labels Coronavirus as a Pandemic
There is fear in the stock markets. Is it justified? It doesn’t matter, the market is always right!
Share this:
Just when you thought it couldn’t get any worse, the World Health Organization Director-General Tedros Adhanom Ghebreyesus has labeled the coronavirus as a pandemic. There are no immediate policy actions that are triggered when something is declared a pandemic. Therefore, it is up to the governments of individual nations to decide on their own response to a pandemic. As we have been discussing over the past few weeks, governments and central banks around the world have been trying to provide both monetary and fiscal stimulus to help businesses who have been affected by the coronavirus. However, that will not stop the spread of those infected. The WHO recommends isolation for those who have the coronavirus or believe they have it.
The S&P 500 moved into bear territory today (moving 20% lower is the classical definition). In doing so, it has formed a flag pattern on a 240-minute timeframe. The target for a flag pattern is to take the length of the flagpole and add it to the breakout level. (I add the flagpole to the top of the flag for a more conservative target). In this case the target is 2625. The RSI is still in neutral territory and still has room to move lower.
Source: Tradingview, CME, City Index
On a 60-minute timeframe, it shows that the S&P 500 has moved lower from yesterdays highs, and tested Monday’s lows. However, in the short term, price is diverging with the RSI. There is short-term trendline resistance above at 2820 and then resistance at yesterday’s highs of 2882. First support at 2710, which was briefly clipped this afternoon, which is the 127.2% Fibonacci extension level from the October 3rd, 2019 lows to the February 20th highs. Below that is Monday’s lows of 2695.25, and then the flag target of 2625.
Source: Tradingview, CME, City Index
There is fear in the stock market. Is it justified given what we are told about the coronavirus? It doesn’t matter! The market is always right!
Just when you thought it couldn’t get any worse, the World Health Organization Director-General Tedros Adhanom Ghebreyesus has labeled the coronavirus as a pandemic. There are no immediate policy actions that are triggered when something is declared a pandemic. Therefore, it is up to the governments of individual nations to decide on their own response to a pandemic. As we have been discussing over the past few weeks, governments and central banks around the world have been trying to provide both monetary and fiscal stimulus to help businesses who have been affected by the coronavirus. However, that will not stop the spread of those infected. The WHO recommends isolation for those who have the coronavirus or believe they have it.
The S&P 500 moved into bear territory today (moving 20% lower is the classical definition). In doing so, it has formed a flag pattern on a 240-minute timeframe. The target for a flag pattern is to take the length of the flagpole and add it to the breakout level. (I add the flagpole to the top of the flag for a more conservative target). In this case the target is 2625. The RSI is still in neutral territory and still has room to move lower.
Source: Tradingview, CME, FOREX.com
On a 60-minute timeframe, it shows that the S&P 500 has moved lower from yesterdays highs, and tested Monday’s lows. However, in the short term, price is diverging with the RSI. There is short-term trendline resistance above at 2820 and then resistance at yesterday’s highs of 2882. First support at 2710, which was briefly clipped this afternoon, which is the 127.2% Fibonacci extension level from the October 3rd, 2019 lows to the February 20th highs. Below that is Monday’s lows of 2695.25, and then the flag target of 2625.
Source: Tradingview, CME, FOREX.com
There is fear in the stock market. Is it justified given what we are told about the coronavirus? It doesn’t matter! The market is always right!
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
US Core PCE Preview: Stale or Significant for the Fed
Core PCE inflation takes center stage Wednesday, with traders watching for signs of renewed price pressure and clues on whether the Fed could hike again in October.
Australian Dollar Forecast: AUD/USD Four-Week Slide Nears Critical Uptrend Support 9 29 2026
Aussie momentum has deteriorated sharply into quarter-end, with inflation, Core PCE and NFP on tap as AUD/USD closes in on a pivotal technical threshold.
Euro Forecast: EUR/USD Tumbles Towards Yearly Low as Daily RSI Goes Oversold
EUR/USD has been hit hard in the final month of the quarter as USD strength has shown up in a big way. With the pair set to challenge its yearly low as RSI has pushed into oversold territory, is there a chance for a pullback with some big headline risk hitting in the US over the next few days?
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.