Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Opening Bell: Oil Crashes To $10; Futures, Stocks Gain On Lockdown Easing

By (Pinchas Cohen/ OverviewApr 28, 2020 12:21
Opening Bell: Oil Crashes To $10; Futures, Stocks Gain On Lockdown Easing
By (Pinchas Cohen/   |  Apr 28, 2020 12:21
Saved. See Saved Items.
This article has already been saved in your Saved Items
  • Investor hopes for the reopening of local economies buoyed as governments plan to relax lockdowns
  • Big week for corporate earnings continues
  • Oil takes a hit as biggest ETF dumps front-month contract

Key Events

Futures on the four main US indices—the Dow Jones, S&P 500, NASDAQ and Russell 2000—rebounded on Tuesday during the European session, after earlier choppy trade, as oil prices once again dropped significantly.

Global governments are collectively considering restarting economies, spurring financial market optimism, as reports of the number of new cases of COVID-19 fall. Still, worldwide, more than 3 million confirmed cases have now been charted, while the number of fatalities is upward of 211,000.

The dollar weakened.

Global Financial Affairs

Markets have become a thicket of risks that traders must now figure out how to navigate: upcoming policy decisions by the Federal Reserve and the European Central Bank; quarterly earnings reports this week from such mega cap tech companies as Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN).

All the while, in the background, lingering unease about the strength of the market persists. Was the fastest transition from a bear to a bull market on record—just three head-spinning weeks—justified? After all, the current U.S. economy, like many other developed and emerging economies in this age of coronavirus, is being fueled primarily by government spending and central bank purchasing.

Notwithstanding, this morning, all four US futures climbed out of negative territory. Except for contracts on the Russell 2000, contracts tested the April 17 highs of their underlying benchmarks.

Russell 2000 Futures Daily
Russell 2000 Futures Daily

From a technical perspective, small cap futures seem the healthiest, even after we characterized their outperformance as “unhinged greed.” The index completed back-to-back continuation patterns within a symmetrical rising channel, as opposed to the bearish wedges most world benchmarks are developing. Today’s trading also climbed over the 50 DMA.

The Stoxx Europe 600 index ascended to a near two-week high as positive corporate results from companies such as Novartis (SIX:NOVN) and UBS (SIX:UBSG) outweighed energy stocks following another oil crash. Banking giant HSBC Holdings (LON:HSBA) slipped after it cautioned that bad loan charges may climb to as much as $11 billion this year, the highest since the last financial crisis as the coronavirus pandemic halts economic activity around the world.

Earlier today, the Asian session was mixed, with Hong Kong’s Hang Seng outperforming, (+1.32%), while China’s Shanghai Composite lagged, (-0.19%).

As for yields, which appear to be wavering, a fuzzy picture when charting them and including intraday prices regains some clarity when using only closing prices.

UST 10Y Daily
UST 10Y Daily

The yield on the US 10-year Treasury may be retesting the focal point of a resistance downtrend line since Feb. 13 and the broken support uptrend line since the March 8 all-time low. The presumption is a continued downtrend, which jibes with our interpretation of the completion of a bearish pattern for equities.

The dollar weakened for a third day.

DXY Daily
DXY Daily

The global reserve currency fell below what could have been a less steep uptrend line, while trading within an ascending triangle, whose bullish implication is counterintuitive to the preceding drop. In other words, right now, there's an unclear picture of supply and demand.

Despite dollar weakness, gold has been falling for the third day in a row, just like the dollar, as investor risk appetite increases, driven by the view that reopened economies will render the last 10 weeks as nothing more than a brief nightmare.

Gold Daily
Gold Daily

The current dynamic for the precious metal feeds a second return move to the neckline of a H&S continuation pattern. For disciplined traders it can be viewed as a buying dip. Note, the MACD triggered a sell signal upon the first return move to retest the bullish pattern, while the RSI is forming a H&S top for momentum, rendering this a trade suitable only for those who will follow through on their preset trading plans.

Oil continued to inch toward $10, as BP warned of the worst shock ever to the energy market from the coronavirus, and storage fears reemerged after the United States Oil Fund (NYSE:USO), the biggest oil exchange-traded fund, stunned markets when it sold all its holdings of the most active, front month contract in favor of July futures.

WTI Daily
WTI Daily

The extended drop in oil prices follows an Evening Star, whose bearish implication is compounded by its position, below the crucial support since March 18 that collapsed into subzero territory on April 20, adding another element of uncertainty, to a market already awash in instability.

As oil once again slipped lower, unanswered questions remain about the commodity and markets. Will the front month June WTI contract also head toward zero and beyond as the dearth of storage solutions and diminished demand persist? Plus, who knew that the downside risk for crude is just as unlimited as its upside risk?

Up Ahead

  • A week filled with high profile earnings reports continues: Facebook reports today, after the close; Tesla (NASDAQ:TSLA) and Boeing (NYSE:BA) release results on Wednesday; Amazon and Apple on Friday.
  • Investors hungry for data will find plenty on Wednesday: US GDP is expected to plunge, oil stockpiles to have ballooned and the Fed is anticipated to keep rates steady at 0.25%, for now.
  • Thursday Germany’s unemployment situation will be highlighted, as well as US weekly Initial Jobless Claims which will likely add significantly to the 26 million Americans already unemployed.
  • Friday's releases close the week with manufacturing activity—UK Manufacturing PMI is expected to remain flat, while US ISM Manufacturing PMI is anticipated to plummet.

Market Moves



  • The Dollar Index decreased 0.3%.
  • The euro increased 0.2% to $1.0852.
  • The British pound gained 0.3% to $1.2468.


  • The yield on 10-year Treasuries decreased less than one basis point to 0.66%.
  • Germany’s 10-year yield increased two basis points to -0.44%.
  • Britain’s 10-year yield climbed less than one basis point to 0.305%.
  • New Zealand’s 10-year yield fell 10 basis points to 0.925%.


  • West Texas Intermediate crude sank 20.5% to $10.16 a barrel.
  • Brent crude dipped 4.8% to $19.04 a barrel.
  • Gold weakened 0.8% to $1,701.03 an ounce.
  • Iron ore decreased 0.8% to $80.65 per metric ton.
Opening Bell: Oil Crashes To $10; Futures, Stocks Gain On Lockdown Easing

Related Articles

Neil Wilson
How Do You Trade The Fed? By Neil Wilson - Jun 18, 2021

How do you trade the Fed? Not easily, is the simple answer. US has ripped higher as the Fed signalled it won’t let inflation run riot, but bonds have been pretty steady – United...

Opening Bell: Oil Crashes To $10; Futures, Stocks Gain On Lockdown Easing

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Alan Dee
Alan Dee Apr 28, 2020 20:42
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I thought an evening or morning star needed to gap?Looks more like a grave stone with small upper wick,Either way it was a reverse signal for a downward direction.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email