As the Federal Reserve continues to raise interest rates and unwind its balance sheet, concerns over other US banks were raised following the "Silicon Valley Bank Incident", causing all three major US stock markets to fall. The S&P 500 Bank Index plummeted 6% last night, marking the largest single-day drop in two years. JPMorgan's stock price also fell 6%, resulting in a market capitalization loss of approximately $20 billion. Bank of America fell 6.1%, while Wells Fargo and Citigroup fell over 6% and 4% respectively. The four major US banks suffered a combined loss of $47 billion.
Silicon Valley Bank announced an $1.8 billion loss from the sale of part of its investment portfolio, and sought to raise $2.25 billion by selling common and preferred shares. The bank's "self-rescue measures" worried investors, causing the stock price to plummet by 60%. In short, the market believes that Silicon Valley Bank is facing a liquidity crisis. Without a doubt, the market's risk aversion sentiment has spread to the crude oil market.
After reaching $80, USOIL saw a sharp decline to below $75. Currently, there is a demand for a rebound in the market, and it is suggested to buy on dips below $75. Short-term technical rebounds and corrective trends for crude oil are expected, with a target focus on $77-80. I will continue to monitor the market and provide the latest strategies.
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