“Anytime there’s a risk of easy money being taken away, that will result in some of these very expensive areas of the market to pull back,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.
“The pressure on the Fed to pick up the pace of tightening is only mounting. With higher prices permeating the marketplace, we could see a snowball effect when it comes to inflation challenges as more suppliers justify higher prices and more consumers begin to close their wallets,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial.
~“The inflation trajectory remains worrisome. While we believe that price pressures will abate next year, the Fed is doing the prudent thing by tapering faster, so that it is well-positioned to hike rates if needed,” said Win Thin, global head of currency strategy at Brown Brothers Harriman.
Liquidity is the only game in town. With a looming threat that the USA is about to close the momentary spigot, a distinct air of risk-off trading is increasingly evident. That suggests, the risk of a lengthier and deeper process of consolidation is rising.
The Nasdaq-100 pulled back sharply today and is back testing the region of the lows from earlier this month. If the trend is to remain consistent it will need to hold that low.
The Russell 2000 is testing the lower side of its almost yearlong range. Moves below 2140 have not been sustained this year so a sustained move below that level would confirm top formation completion; particularly as it encounters resistance in the region of the trend mean.
Both the SPAC Index and the ARK Innovation ETF are extending their recent declines.
Adobe has been among the best performers in the tech sector over the last decade because of its foresight in adopting a services/subscription model. The share pulled back sharply today to retest the region of the trend mean and will need to bounce smartly if the benefit of the doubt is to give to the upside.