Stocks Drop Sharply On November 9, 2022 Ahead Of The Big CPI Report

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11/9/22

#STOCKS – $GS, $IBM, $ZM, $ARKK

#MACRO – $SPY, $VVIX

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Stocks finished sharply lower on November 9, with the S&P 500 declining by around 2%. The sell-off in the market accelerate after the 10-Year auction at 1 PM. The auction didn’t go very well, pricing at 4.14% versus a when-issued yield of 4.106%.

I have been looking for a hotter-than-expected CPI report, and I expect that tomorrow. The VVIX has moved up quite a bit over the last couple of days due to the VIX’s rising implied volatility. Sometimes, a rising VVIX can act as a leading indicator to the VIX rising and the S&P 500 falling. I believe the market could be preparing for a hotter-than-expected CPI report, and the need for traders to look for hedges post-CPI.

Bitcoin (BTC)

It certainly didn’t help that Bitcoin and other cryptos assets are getting smashed on this news on FTX and its implosion. The decline in Bitcoin has been long and drawn out, it has had a descending triangle on the chart for months, and it even nearly faked everyone out with that move above the trend line briefly, but that turned out to be nothing more than a throw over. Now Bitcoin is on the verge of cutting through support at 16,650. BTC could trade down to around 10,200 by the time all is said and done.

S&P 500 (SPY)

Meanwhile, the S&P 500 has fallen out of the diamond reversal pattern I pointed out yesterday. Again, 3640 should be the first level of support, but these patterns tend to retrace their origins and make new lows.

Zoom (ZM)

Zoom is very close to making a new low. This stock has been one of the most significant leading indicators of the overall market for months, maybe even longer. If this stock makes a new low, a new low in the broader indexes could be around the corner.

ARKK

The ARKK ETF did make a new low today. I do not even know what to say here.

Goldman Sachs (GS)

I’m still shocked by Goldman Sachs’s run over the past several weeks. You can see the trendline, how close the stock is to the trend line, and the overbought conditions on the RSI. It is very close to breaking the trend line. If the trend line breaks, that is not a good sign for the market because this market has been held together due to the rotation of the growth to value trade. Goldman is an indication of that trade.

IBM (IBM)

The canary maybe IBM after it broke that trend line today when it gapped below the trend line at the opening.

Tomorrow is CPI day, so get a good night’s sleep.

-Mike

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