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Stocks Make Clean Break of Support, Targeting Fib Retracement

EQUITIES
  • Equities deteriorating further in recent trade, with the e-mini S&P plumbing a new session low of 3968.50 and making a clean break of both the Monday low and the the 50-dma (4011.7) ahead of the 4,000 psychological support. Selling pressure accelerating on the way through support, with evidence of programmatic selling on the most recent move lower (net 1500 names sold at 1547BST/1047ET).
  • Next support crosses at 3902.01, the 61.8% retracement of the Jun 17 - Aug 16 upleg.
  • Move coincides with greenback strength, with the recent extremes in USD/CNH, USD/CAD and USD/JPY all now being tested.
  • Theory follows that data today bolsters the case for more aggressive tightening from the Fed in September (ECB speak so far Tuesday has also been decidedly hawkish).
  • Energy names also hurt by the pullback in both WTI, Brent futures so far today, with Brent dipping back below $100/bbl as export sources confirm supply not under threat from recent unrest. Defensive healthcare names the best performers, although still lower as the sector sits 0.7% underwater.

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