Equity bulls pounced in an effort to front-run a Santa Claus rally yesterday and that led to a strong rally.
It turns out that the tax loss sellers might not be done yet. It's been a rout today and the Nasdaq is leading the way, down 2.9%.
The drop reinforces the downtrend in stocks since Powell but doesn't change the focus on support at the November low of 10262 or the October low of 10088 (or 10,000 for good measure).
However if those crack, we could be looking at another 15-20% lower.
Tesla now is expressing a collapse in confidence and broader multiples are still high. The Fed put is in hibernation and while there might be a Santa Claus rally, it's going to struggle to hold gains until we get a genuine Fed pivot.
