Panicky peddling pummels prices, nevertheless rallies occur, they abort, the S&P and Nasdaq tank anew, and all this depends on fundamentals that backstop the 'upset' market leadership, which had delusional optimism.

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It is also the leveraged hedge funds (or fund redemptions) that combine to sock-it to the big-caps as forewarned for months. Tomorrow, another drop and some rebound try, since big-tech news is behind. It could be the day of the 'proverbial bull-bear', a very rarely seen creature. The fight's likely at-hand, technical variables, short-term don't count-out a rebound try, even if nothing appears sustainable, with a backdrop as it stands for now.

Interactions of risks has been our backdrop variable for some time now. Of course the technical proximity of breaking to lower lows loomed (hence yellow line under S&P chart last night), so we viewed it as a bear market rally only.

Now before getting carried-away with negativity, realize this is re-valuation of the mega-caps also based on 'more realistic' appraisals of forward prospects, in a world of slower growth, which relates to everything we've talked about.

Furthermore, there was a broad expectation noted for over a week, that these 'big-tech' earnings guidance along with Quarterly reports, would be so difficult that it would cause CEO's generally to forewarn about unknown prospects for much of the rest of the year.

That doesn't mean S&P doesn't washout and/or bottom far before that, but it is to say you are not climactically oversold in those 'grand dames'. That's why it is our viewpoint that there will be rebounds, but not yet sustainable. Also we may get a revival after some of these key earnings reports washout those big component stocks, and hence that could see this repeated again tomorrow.

In-sum: 

Yields dropped and stocks ignored that, mostly due to trepidation as relates to the earnings guidance from big-cap tech darlings the Street holds in excess, and the interactions of most variables we've outlined for weeks.

At the same time the proximity to the S&P lows clearly invited a breakdown, plus this was described (last week's bounce too) as just bear market rallies.

And of course, the Tesla (TSLA) decline (which presumes future sales by Musk so as to help fund his purchase taking Twitter (TWTR) private, contributed to a heavy S&P.

This bifurcated market led by overpriced big-caps has been my warning for a few months, not just days. Microsoft (MSFT) beat earnings (shares up and then off), Alphabet (GOOGL) missed (if you believed the absurd advance optimism), and all this doesn't matter much because it was obvious since China's lock-down (not just the war) that estimates were generally too high for a majority of stocks.

In the case of Microsoft they did well in Azure, but traders 'yell fire in a crowd' and take shares down anyway. Most hedgers are 'leveraged', hence they sell on each opportunity. That's a normal characteristic towards bear market ends.

GM (GM) reaffirmed guidance (so up and then down), but that guidance wasn't so hot, thus I'm underwhelmed. It's not a broken stock in a broken sector, but it's early. Like I said months ago, I like it more at 30 and not at 40 or 60, where so many liked it. Same with Ford (F), like it at 12 and around here (but likely goes lower), and not when it got to our goal about 20. Eventually it will yet-again.

I don't disagree Ford and GM won't be able to deliver EV's at scale quickly, so guess what, that's why the shares are down but they will eventually do it, and then the shares will double. Meanwhile 'if' nifty Canoo (GOEV) can come to market at lower price points (and especially if some deal's cut with Panasonic to enable the battery supplies), well that's the basis of speculating a bit with it. But as for sure with any of the small-caps, a 'sprinkling' is the idea, and as the market's showing even that doesn't negate the intervening erosion / absence of bids.

By the way Texas Instruments (TXN) 'beat' numbers, so that's amazing considering they're in everything. Nevertheless it's off too in a no-prisoners market. TXN pays a decent dividend and is expanding its domestic capacity, a plus.

S&P 'and' Nasdaq and others are below their 50-day and 200-Day Moving Averages, in a continuation trend I've outlined for quite some time. Emphasis a couple weeks ago was on the repeated failure of S&P to attack the 200-Day with any success, technically opening the trap door for just what you've seen.

The downside is primarily the growth-oriented names, and 'growth' is almost a sort of oxymoron for some of them now. Netflix (NFLX) was the most hit, PayPal (PYPL) very close and Moderna (MRNA), despite having a revised vaccine that works on Omicron, is also down. 

Basically in this kind of market it's simple: they take no prisoners. Tesla was the biggest S&P component creamed today, as noted. SalesForce (CRM) lowest in 10 years or more, and basically it's what happens when you have liquidated leveraged positions among the effete money managers who loaded their boat with stocks that had already made solid returns from two years or so ago.

This is 'more' than just a rate-hike repricing scenario, but that's part of it. What is more jarring is global retrenchment coming as a result of China's struggle with COVID, with a persistence of supply-chain problems suppressing results for the near-term. For some stocks (Ford comes to mind) the related purges probably set-up entry opportunities 'soon' with an eye on next year's gains.

The so-called extreme hawkishness doesn't trouble me so much, because it's being priced-into the equity markets, but the Fed won't be able to pursue their policy for long, if global economies are crumbling, and so there's that.

Pricing in the massive fiscal and monetary policies is what's going on finally, a revulsion to over-concentration in the mega-caps I've warned of for months. It has to hurt even the N'vidia, Microsoft, Apple or others (similarly) for awhile, and during such a freakout by the 'Generals' as I term them, the 'troops' might just continue hunkering down, but selectively on dips have less risk remaining than the 'glamorous grand dames'. That's been and remains the case.

Bottom-line:

As I once said in a similar situation about the Nasdaq plunge: all rallies will be false and abortive, within context of the bear market trend, at least until we get a climactic washout 'or' a fundamental change in Ukraine or China's fight with COVID. If Putin really can't withstand defeat and you get the nuclear threat becoming actual, or China invades Thailand (didn't say Taiwan) or anything like that, you get another extend purge.

The other side of the coin is if those things don't happen, and peace prevails. It's often darkest before the dawn, but the charts will look negative until they don't, and the Troops have remained hunkered in their trenches for months. It is worth noting that retreating Generals are heading that way, but generally at this point have not arrived at the trenches so they're still vulnerable.

Tomorrow you might get another rebound after more downside, because you'll be past the shock of the poor guidance in the conference calls I referred to.