What levels to be aware of if the market selloff gets out of hand?
US futures triggered a circuit breaker on a 5% drop within the first four hours of the new week and that halted trading as we look towards the cash equity open later today.
If the selloff gets out of hand and deepens, what are the levels to watch out for? Let's take a look and how long trading may be halted and where those levels will be.
There are three circuit breaker levels to be aware of with the S&P 500:
- Level one breach: 7% drop from the previous day closing price = 2,764.30; 15 mins trading halt
- Level two breach: 13% drop from the previous day closing price = 2,585.96 ; 15 mins trading halt
- Level three breach: 20% drop from the previous day closing price = 2,377.90; trading halted for the rest of the day
As the market metldown isn't getting worse for now, the focus turns towards how Wall Street will perform later today for more general direction. I mean, we all know it is going to be an ugly day in the market. The question is, will it get worse?
If we start to see market movement towards those circuit breaker levels, it could lead the market meltdown today to turn even uglier than what we are seeing so far.
