US Stock Futures Sink: Navigating Market Turmoil and Risk Management Strategies for Swing Traders

Good morning,

US stock futures were in the red on Monday, extending losses from last week, as concerns about the effects of further monetary tightening on the economies linger. At the same time, investors follow the turmoil in Russia after an aborted munity by the Wagner group during the weekend.

A recent rally in U.S. stocks sputtered last week after Fed Chair Jerome Powell’s testimony in which he signaled more interest rate hikes ahead but vowed the central bank would proceed with caution. Most policymakers see at least two more quarter-point rate increases by the end of this year, while traders expect one more rate hike in July and see the Fed holding rates steady through the end of 2023, according to CMEGroup’s Fedwatch tool.

A slew of economic data including a key inflation gauge, durable goods and University of Michigan’s consumer sentiment index will be released this week. Powell is also set to speak again later this week.

Alphabet Inc slipped 1.6% premarket after UBS downgraded the stock to “neutral” from “buy”, while Tesla Inc fell 2.1% after Goldman Sachs cut the electric car maker’s rating to “neutral”.

WTI crude futures settled around $69.5 per barrel. Gold rose above $1,920 an ounce while the US 10 Year Note Bond Yield was 3.68 percent.

The tech-heavy Nasdaq snapped its eight-week winning streak on Friday, its longest since March 2019, while the benchmark S&P 500 broke its five-week rally, its longest since November 2021. On the week, the Dow fell 2%, the S&P 500 and the Nasdaq dropped 1.8% and 2%, respectively.

Falling markets last week are providing us with less opportunity on the Horizons and < 200 stock lists this week, however price action declines provide future set-up for swing trades. Following your trading guidelines and applying risk management strategies are key components of successful swing trading.

Have a great day!