The S&P 500 opened down more than 1.5% this morning as the selloff continues from last week. Down over 9% from this month’s all-time highs, the index failed to find support at the 50-day SMA.
Leading the selloff this morning is the Energy sector, down almost 4% overall in morning trading. Looking deeper into the Select Sector SPDR Trust Energy ETF (NYSE:XLE), it’s no surprise to find that all top 15 holdings of the portfolio are down significantly. The ETF’s top two holdings, Exxon Mobile Corp (NYSE:XOM) and Chevron Corp (NYSE:CVX), which make up around 45% of the ETF are both down over 3% after the opening bell. In my view, since I don’t see any significant negative headlines on these main holdings, I’d conclude this sector selloff has [at least] two driving factors:
1) The overall systemic selloff of the market
2) The fact that Natural Gas (Nymex Oct 2020) futures are trading down over 14 cents to $1.90
Though it’s hard to be an optimist during a weeks-long selloff, I do see potential support ahead for the S&P 500 at its 100-day SMA, which is currently at just under $3200 (around 3% below where we opened today).
