Crude oil is trading below $20 after plunging over -23% on the final day of trading this week. In early trading, crude oil had been up trading higher, hitting a high of $27.89 before plummeting into the close. The reason for the plunge, social distancing, and border closings due to the coronavirus.
The coronavirus pandemic is demolishing crude oil demand in the United States as authorities encourage people to stay home and work from home while also discouraging domestic travel. Adding to that mandate is the closing of the U.S. - Canada, and U.S. - Mexico borders. Demand by the major economies in Europe, ranging from Italy, Spain, and France, are locked-down and unable to travel within their own countries and have advisories against traveling elsewhere.
All the while, Saudi Arabia, the United Arab Emirates (UAE), and Russia promise to flood the market with crude oil to the tune of a combined 4 million bpd next month when demand could be at its weakest as the pandemic is spreading.
The stock market sold off in the final minutes of trading Friday to close with the worst week of trading since the 2008 financial crisis. The DOW closed down -4.5% on the day followed by the S&P 500 with a loss fo -4%. The NASDAQ fared a bit better, only losing -3.7%.
However, the weekly losses are considerably worse, with the DOW losing -17%, S&P 500 -15%, and the NASDAQ with a weekly loss of -13%. It doesn't look like we've found the bottom of the fall yet.
Gold issued a new red monthly Trade Triangle, this indicating that the long-term trend for gold is down much like crude oil. Gold's loss on the week wasn't as steep, only losing -2.5%.
The U.S. dollar has been under the radar as far as I'm concerned, posting a gain of +4.6% on the week and issuing a new green weekly Trade Triangle indicating a move to the sidelines exiting the long-term downtrend. When was the last time that you saw the U.S. dollar index above $100? The answer was three years ago in 2017.
Bitcoin stopped the bleeding this week by posting a gain of +16% on the week trading just above the $6,000 level, but it still has quite a bit of work to exit the long-term downtrend.
Key Levels To Watch Next Week:
- S&P 500 (CME:SP500): 3,136.72
- Dow (INDEX:DJI): 27,102.34
- NASDAQ (NASDAQ:COMP): 9,070.32
- U.S. Dollar (ICE:DX): 95.71
- Gold (NYMEX:GC.J20): 1,519.40
- Crude Oil (NYMEX:CL.H20): 48.55
- Bitcoin (BITCOIN:BITSTAMPUSD): 9,219.13