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Stocks fell sharply today as investors grew worried about the increasing number of newly confirmed coronavirus cases, which raised concern about the economic reopening and recovery.
The Dow dropped 711 points, or 2.7%. The S&P 500 traded 2.6% lower, while the Nasdaq slid 2.1% (its first daily decline in nine sessions).
The major averages hit their lows of the day after Florida said its confirmed cases jumped by 5,508 on Tuesday, a record. They now total 109,014. The state also said its positivity rate rose to 15.91% from 10.82%.
Meanwhile, New York, New Jersey, and Connecticut governors ordered visitors from certain hotspot states to quarantine for 14 days. At one point, the Dow had fallen more than 800 points.
Here's what our experts – Chris Johnson and Andrew Keene – saw throughout the volatile trading session.
- Chris thinks stocks are overbought because:
- 89% of the NDX stocks are above their 50-day moving averages.
- 77% of the S&P 500 and 80% of the Dow are in the same position.
- Five companies represent nearly 25% of the Nasdaq 100's performance.
- Fewer companies leading the way to record highs reflects concentration risk.
- The earnings slump may have been moved forward this quarter.
- The Fed's backdrop will step in, but stocks need a "reset."
- Chris advises investors not to panic and to have a plan now.
- Keep your "level one" hedges in place.
- We're likely going to see a pick-up in volume through the rest of the week.
- Tomorrow, Chris is going to reveal some "other side of the coin" stock picks with his Markets Live viewers – so be sure to tune in then.
- Andrew thinks if we take out 2,900 on the S&P 500, we could drop to 2,550.
- But if that doesn't happen, we could find ourselves in a sideways trading range between 2,900 and 3,100 before breaking out to new all-time highs.
- Andrew is an options trading expert.
- Andrew thinks investors should be long KB Home (NYSE: KBH) and Nike Inc. (NYSE: NKE) ahead of their earnings reports tomorrow and Friday.
Catch us tomorrow – starting LIVE again at 8:45 a.m. EDT with Chris Johnson, right here.
If you missed our live streams today, you can now replay them on our YouTube channel, here.
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