Todays charts – November 30/21

(From CNN)… Stocks dropped on Tuesday as volatility resumed after a brief rebound earlier this week, with investors contemplating the impacts of a new coronavirus variant and new comments Federal Reserve Chair Jerome Powell.

The S&P 500, Dow and Nasdaq declined. The S&P 500 dropped about 88 points, or 1.90% on Tuesday. US crude oil prices dropped more than 4%. And shares of airlines, cruise lines and lodging companies considered to be some of the most exposed to virus-related disruptions each sank in early trading to reverse Monday’s gains.

Investors reacted to Fed Chair Powell’s latest remarks before the Senate Banking Committee, wherein Powell said the central bank could speed up its tapering process to end sooner than previously telegraphed in the face of rising inflationary pressures. The comments came even as some other market participants had expected the Fed to strike a more accommodative tone for longer in the face of the recently discovered Omicron variant.

“At this point the economy is very strong and inflation pressures are high, and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases, which we announced at the November meeting, perhaps a few months sooner,” Powell said. “I expect we will discuss that at our upcoming meeting.”

The S&P 500 dropped below its recent low from Friday and is now approaching near-term support at 4550.  A drop to 4550 would represent a pullback of  3.27% from the recent high. If the 4550 level does not hold, we have key support at early October low of 4300. A drop to 4300 would amount to an 8.72% decline.  Should 4300 not hold, then we could see a significant correction.

The Russell 2000 was down 2.04% and has made a rapid 10% decline from its all-time high achieved just over three weeks ago. Next support for the Russell 2000 ETF is 217, with key support at 211. A drop to 211 would result in a 12.88% sell-off.

Note at the bottom of the chart, IWM is now technically oversold, suggesting we see a bounce very soon. But the near-term trend is certainly down at this time, so any bounce may simply be a dead-cat bounce, and lower lows are certainly possible, if not likely.

The Canadian TSX index dropped 2.31% today and is now 5.10% below recent highs.  There is weak support at the 20,400 level, and stronger support at 20,030. A drop to 20.030 would represent a decline of ~8% from recent highs.

US 10-year bond yields dropped another 5.92% Tuesday, and are down over 14% in the last week.

Gold was down another 8.70 and will try to find support at 1765 level.

Stay tuned!

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