Stocks Extend Losses, Break Below Key Technical Support

Stocks Extend Losses, Break Below Key Technical Support

Update (1100ET): US equity market dip-buyers are notably absent and Nasdaq And Small Caps are now down 2% on the day (after being up 0.5% before the ‘good news’ hit)…

This has pushed the majors below key technical support once again. S&P

As SpotGamma notes, things start to get a little more exciting if the S&P drops to 4500 as Gamma flips…

And we are getting close…

*  *  *

Plunging unemployment and record high ISM Services… what is their to complain about?

Sadly – for equity investors – a lot! This ‘good news’ is very definitely ‘bad news’ for the only thing that levitates stocks – Fed liquidity – as it offers yet more cover for an accelerate taper and earlier and more aggressive rate-hike trajectory.

STIRs are pricing in an increasingly hawkish Fed…

And stocks don’t like that…

It appears – just like in Dec 2018 – stocks are in search of the new strike price for Powell’s Put (stocks fell 20% before Powell flip-flopped and sent the yield curve soaring again)…

Meanwhile, the yield curve has ripped back to flatter on the day…

As a Fed policy mistake is also priced in.

Tyler Durden
Fri, 12/03/2021 – 10:55

Share DeepPol