The stock market just broke below its 200-day Simple Moving Average, and fear is accelerating. The popular S&P 500 ETF, the SPDR S&P 500 ETF Trust (NYSEARCA: SPY), not only sliced through that key technical level last week, but also broke below a major area of multi-year support around $660. It's now close to correction territory, sitting nearly 5% negative on the year and over 7% off from its 52-week high. Friday's 1.7% decline alone was enough to rattle even the most patient bulls.
What began as a targeted selloff in mega-cap technology and software stocks has since evolved into a broader market and economic problem. Surging oil prices tied to the Middle East conflict, rising inflation, and the near-complete evaporation of rate cut expectations have created a deeply uncertain environment. Risk-off sentiment is firmly in control, and the dollar has bounced sharply off its 52-week lows in recent weeks.
