Evergrande crisis triggers this short-term stock market sell signal

The financial crisis gripping major Chinese property developer Evergrande has triggered a sharp turn in broader stock market sentiment, as seen by the S&P 500 dropping below its key 50-day moving average.

With news of the Evergrande debacle gaining steam last Friday, the S&P 500 closed the session below the 50-day moving average for the first time since June. The tenuous situation of Evergrande — which includes potential missed debt repayments — gained steam over the weekend and caused investors to awaken to a global risk rout on Monday. In turn, the S&P 500 fell further below the 50-day moving average midway through Monday's session (see chart below).

Miller Tabak strategist Matt Maley points out the S&P 500 dropped below the 50-day moving average on one trading day back in March of this year. It quickly bounced back as investors embraced the re-acceleration in corporate profits from the depths of the COVID-19 pandemic and ongoing easy policies from the Federal Reserve.

But given fresh concerns facing investors around the debt ceiling, Evergrande, and the direction of Fed policy (meeting on tap this week) a test of the 100-day moving average (which is less than 1% away from current levels) could be in the cards.

Key technical levels for the S&P 500 have now come into play thanks to spate of negative headlines.

If that important technical level is breached for the S&P 500, strategists argue it could be look out below for stocks in the near-term.

Says Maley, “The 100-DMA [day moving average] provided nice support for the S&P 500 back in both September and October of last year. Therefore, it might be able to slow any slide before things start to get ugly. Having said this, a break of that 100-DMA would confirm the break-down in the stock market… and it would signal that a test of the 200-DMA (down at 4,100) is all but certain.”

According to Yahoo Finance Plus data, the 200-day average is only 5.8% away from being tested.

Other traders are taking a more hopeful position on the markets even as they exhibit their first true test of volatility in some time. The bulls appear to agree that while short-term pressure in markets is possible due to the litany of headline risks, the fundamentals are such that stocks could rally into year-end.

“I think you could watch for the pullback. But I think by the end of the year, this will be just a blip along the way,” said Baird strategist Michael Antonelli on Yahoo Finance Live. “In order for you to think this is super bad, you are going to have to make the case why this impacts, Visa, Google and Facebook earnings in a meaningful way that we have some 15% to 20% draw-down [correction].”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

    Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit

    Internet Explorer Channel Network
    News Related

    OTHER NEWS

    Glamorous life coach who 'pretended to be a doctor and signed off on 600 FAKE Covid exemption certificates' looks shellshocked at court - as security orders her to follow a VERY simple Covid rule

    Maria Pau is alleged to have issued up to 600 fake Covid medical exemptionsShe appeared in court on Thursday where her case was adjournedA large media pack descended on Ms Pau as she left Southport Court Queensland Police said she does not believe she has done anything wrongThe 'addiction coach' has a doctorate in 'professional research' Read more »

    'Heartbroken' model Sammy Robinson confirms SPLIT with long-term boyfriend after seven years - as rumours swirl she already has a handsome new flame

    Sammy Robinson has split from her partner of seven years, Nick WheatleyThe 25-year-old Gigi Hadid lookalike insisted she is in 'no rush to date'But rumours are swirling she is already seeing Sydney influencer, Jordan SimiSimi, 27, dated Neighbours actress Bonnie Anderson for a year and split in 2020 Read more »

    Chel Diokno 'very optimistic' about 2022 Senate bid

    SENATORIAL aspirant Chel Diokno is “very optimistic” about his bid for a Senate seat. Diokno, a veteran human rights lawyer, ran for senator in 2019 and placed 21st. Answering a ... Read more »

    Aspirants ready for presidential debate for Eleksyon 2022

    © screenshot 24 Oras Comelec on debates for Presidential aspirants Some of the presidential aspirants said they are already looking forward to the presidential debates for the May 2022 elections. ... Read more »

    Sara backers choose BBM – expert

    Former senator and presidential aspirant Ferdinand “Bongbong” Marcos Jr.s’ topping the PUBLiCUS Asia Inc. survey could be attributed to the people’s desire for continuity or departure from the current form ... Read more »

    Theatre-goers urged to call Samaritans if they're upset by performance of Macbeth

    THEATRE chiefs are urging audience members to call the Samaritans if they are upset by a ­performance of Macbeth. Bosses issued the charity’s phone number and website details for anyone ... Read more »

    Jamaat terror funding case: NIA raids 17 places in J&K

    © Provided by The Times of India SRINAGAR: The National Investigation Agency (NIA), along with the J&K Police, on Wednesday morning conducted raids at 17 locations in the Union territory ... Read more »

    My boyfriend took me for dinner with his mum so they could convince me to let him cheat & have ‘full club experience'

    IT'S only natural to feel slightly on edge around your partner's parents – because let's be honest, your every move is probably being closely monitored as they weigh up if ... Read more »

    Distraught ‘Rust' director Joel Souza spotted for first time since being shot on set

    Joel Souza was spotted in Palo Atlo, California. BACKGRID “Rust” director Joel Souza was spotted publicly on Tuesday for the first time since he was injured in the New Mexico ... Read more »

    Inside Amanda and Clive Owen's ‘s***hole' Yorkshire farmhouse after it's revealed they've been living apart

    OUR Yorkshire Farm's Amanda Owen regularly opens the door to her farmhouse on the popular Channel 5 show. However, the Shepherdess, 46, has bluntly branded her home a 's***hole' – ... Read more »

    Lalu says Sonia called him, Cong denies any such talk

    © Provided by The Times of India PATNA: Amidst the ongoing tussle between allies RJD and Congress over bypolls to two seats in Bihar, RJD chief Lalu Prasad on Wednesday ... Read more »

    Facing criticism, Karnataka may put church survey on back burner

    © Provided by The Times of India BENGALURU: The proposal by the Karnataka government to survey churches and bible societies to weed out unauthorised churches and curb forced religious conversion ... Read more »

    Red list 'to be ABOLISHED and hotel quarantine shelved indefinitely'

    © Provided by Daily Mail MailOnline logo Britain is planning to remove restrictions such as the travel ‘red list’ of seven countries and hotel quarantine due to a declining COVID-19 ... Read more »

    Brendan O'Carroll pays tribute to crew member who died from Covid-19

    © Provided by Daily Mail MailOnline logo Brendan O’Carroll has paid tribute to a Mrs Brown’s Boys crew member who recently died from Covid-19. Dennis Knotts was a props master ... Read more »

    Why Elon Musk is afraid of the billionaire tax

    Think of the billionaire tax as the Tesla solution to Democrats’ search for revenue to pay for their expansion of the social safety net … if only they can convince ... Read more »

    Worx WG170.2 20V Power Share GT Revolution 12-inch string trimmer review

    © Provided by T3 Worx WG170.2 string trimmer review The Worx WG170.2 is a cheap string trimmer, but that doesn’t automatically make it a bad one. It isn’t the best ... Read more »

    Dell XPS desktop provides next-gen power for gamers and creatives

    © Provided by T3 Dell XPS Desktop (8950) The Dell XPS desktop is all about performance and features the latest next-gen processors to make it the ideal choice for creatives ... Read more »

    Esports talent in S.Korea gets boost from big business, easing of gaming ban

    © Reuters/KIM HONG-JI Students majoring in esports attend a class at Eunpyeong Meditech high school in Seoul By Joori Roh SEOUL (Reuters) – South Korean teenager Yoon Ki-chan gets just ... Read more »

    How CSI: Vegas' Boss Views NBC's One Chicago Shows As Blueprint For The Future

    © Provided by CinemaBlend csi vegas gil grissom and sara sidle cbs CSI: Vegas brought the CSI universe back to television for the first time since CSI: Cyber wrapped back ... Read more »

    'I snapped': Accused details girlfriend's death, says daughter's death an accident

    CALGARY — A man who has admitted to murdering his girlfriend said he killed her because she blamed him for the accidental death of her 22-month-old daughter. © Provided by ... Read more »

    Rep. Marjorie Taylor Greene bets big on Trump's nascent social media empire

    U.S. Rep. Marjorie Taylor Greene made a big-money bet on former President Donald Trump’s putative new social media empire — but the investment looks like a flop. © Nicholas Kamm/AFP/Getty ... Read more »

    BLM chapter demands white sheriff who claims Black carrier threatened to kill him resign

    A Black Lives Matter chapter in Washington state demanded that a white county sheriff resign after he was charged with falsely claiming that a Black newspaper carrier had threatened to ... Read more »

    House Judiciary Republicans launch probe into National School Boards Association communications with DOJ

    Republican members of the House Judiciary Committee on Wednesday requested the assistance of the National School Boards Association (NSBA) for their probe into what they called “troubling attempts” by the ... Read more »

    Emmy Rossum bursts out laughing while shooting marriage proposal scene... as she embodies LA billboard queen Angelyne for upcoming miniseries

    The shoot for the upcoming biopic series Angelyne is still ongoing, following a lengthy delay due to the COVID-19 pandemic.  And on Wednesday leading lady Emmy Rossum was back out ... Read more »

    Video: Kevin Hart speaks out after former friend J.T. Jackson is cleared in 2017 sex tape case: 'It's over, and I'm happy that it's over'

    Read more »

    What's the beef with cows and the climate crisis?

    About a third of human-caused methane emissions come from livestock, mostly from beef and dairy cattle, produced in the digestive process that allows ruminants (hoofed animals including cows, sheep and ... Read more »

    Video: West Side Story sneak peek reveals new footage and director Steven Spielberg's behind-the-scenes tradition

    Read more »

    One hospitalized after Boise police shooting that followed reports of ‘suicidal subject'

    This is a breaking news story. Check back to idahostatesman.com for updates. To sign up for breaking news alerts, click here. A police shooting in downtown Boise on Wednesday evening ... Read more »

    Gov. Hochul furiously fundraises ahead of 2022 primary, AG James challenge

    Gov. Kathy Hochul has been fundraising for her 2022 gubernatorial bid amid speculation that State Attorney General Letitia James will also run. G.N.Miller/NYPost ALBANY — The race is on! Gov. ... Read more »

    Opinion: Biden's last chance to rescue America's world standing

    As Joe Biden heads to Europe, he is taking with him a significant chance to reclaim American leadership on what is perhaps the world’s biggest priority — climate change. © ... Read more »

    How to get the second GrabPack hand in Poppy Playtime

    10 years prior to Poppy Playtime, the entire staff of Playtime Co, a toy manufacturer, went missing causing the factory to close down. In Chapter 1 of the game, players ... Read more »

    Vanity, Cloud9 Blue defeat Version1 in NA LCQ first round

    In his first series against his former team after leaving in August, Anthony “vanity” Malaspina and Cloud9 Blue dominated his former team Version1 to advance in the upper bracket of ... Read more »

    Tories to respect vaccine mandate but challenge board ruling that created it: O'Toole

    OTTAWA — Conservative Leader Erin O’Toole says his caucus has agreed to “respect and abide” by a new rule requiring members of Parliament to be fully vaccinated against COVID-19 in ... Read more »

    Yukon legislature votes for motion calling on deputy premier to step down

    WHITEHORSE — Yukon’s deputy premier faced a barrage of questions in the legislature Wednesday over her handling of a 2019 sexual assault investigation at a Whitehorse elementary school. © Provided ... Read more »

    Samsung says component supply issues to affect chip demand, profit hits 3-year high

    By Joyce Lee and Heekyong Yang © Reuters/Kim Hong-Ji FILE PHOTO: The logo of Samsung Electronics is seen on a dish washer at its store in Seoul SEOUL (Reuters) -Samsung ... Read more »

    Government says North Koreans coming to Canada under new scheme must be vetted first

    OTTAWA — The government says North Koreans heading to Canada under a new private sponsorship scheme will face health and security screening before being allowed in. © Provided by The ... Read more »

    Lawsuit alleges Alberta premier's office failed to address sex harassment complaint

    EDMONTON — A former senior political staffer in the Alberta government alleges in a lawsuit that the premier’s office fostered a “poisoned work environment” and repeatedly failed to address her ... Read more »

    Arrest made related to homicide, string of violent crimes in Kansas City, Kansas

    Kansas City, Kansas police believe one woman is responsible for a fatal shooting, a stabbing, two motor vehicle thefts and two car crashes in an apparent series of random crimes ... Read more »

    Kekalkan warga emas di rumah, bukan pusat jagaan, kata pakar

    © Provided by Free Malaysia Today Kajian menunjukkan bahawa kesejahteraan fizikal, mental dan sosial cenderung merosot dengan cepat di rumah jagaan tanpa penjagaan individu atau kakitangan profesional yang bertauliah, menurut ... Read more »

    21 House Democrats call for removing IRS bank reporting proposal from spending bill

    A group of 21 Democratic U.S. representatives sent a letter to House leadership on Wednesday calling for a proposed bank reporting rule to be removed from the $2 trillion dollar ... Read more »
    On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic