March 28, 2023

S&P 500 Crashes on High Volume Driven by Banking Sector

Investors were left reeling yesterday as the S&P 500 not only refused to rally, but crashed on high volume driven by the banking sector, including news and regional banks. Even some tech names ripe for a downswing joined in, and not only was the key support level of 3,958 broken, but so was the next key support level of 3,910.

The overnight action made many investors cautious, but from a swing trading point of view, it had been worth waiting for the potentially hot NFPs figure, regardless of the Challenger ones showing progressing weakness. Even if the initial reaction to a strong figure had gone in the opposite direction, sellers were expected to come and battle it out today.

The worse risk, especially given the bearish factor of ever-shrinking liquidity (M2 money supply), is what happens regarding any SVIB bailout rumor mill. Medium-term, the table is set, and Powell has been clear on the inflation fight, and such a stance is expected to continue.

Investors are advised to remain cautious and keep a close eye on the banking sector, as well as any potential bailout rumors. The market remains volatile, and it is important to stay informed and make informed decisions.

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