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S&P 500 Futures: A Deeper Recession In 2020-21 Than 2008-09?

Published 04/04/2020, 07:40 AM
Updated 07/09/2023, 06:31 AM

The announcement of the worst weekly jobless claims on Thursday indicated that over 9 million Americans filed for unemployment benefits in the last two weeks, around 6% of the workforce. The rebound attempted by the S&P 500 futures appears futile.

There is no doubt that such futile rallies in S&P 500 futures resemble the formation of “Bulls’ Trapping Zone”, as it was just before the great recession of 2008-2009. This may lead to short-covering rallies during such wobbling moves in S&P 500 futures, which seem to be at a critical juncture; before a steep downward move during the upcoming week. Weekly closing levels of S&P 500 futures may clarify the direction of the index.

On analysis of the movements of S&P 500 futures, in different time frames, I find that most of the moving averages indicate a steep slide ahead, which may continue during the next three months. Macroeconomic factors all around the world look more worrisome at this time due to the growing damage of COVID-19. The virus will likely continue to hurt the global supply chain.

On the other hand, steady Gold futures look evident enough to show the growing weakness in global equity markets despite a plethora of economic stimulation by global central banks.  S&P 500 futures may continue to slide on a downward voyage from July 2020 onwards.

S&P 500 Futures Monthly Chart

S&P 500 Futures Weekly Chart

S&P 500 Futures Daily Chart

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Latest comments

i fade the blind prophet
not a chance the banks caused the 2008-09 recession and this was caused by a virus. 08-09 was caused by greed and economics showed weakness before. This time the economic outlook was strong and only a virus closing businesses for health was the issue. in three months we will break records again. stop fear mongeringbe blessed
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