After a few days above, the S&P 500 has broken below its 200-day moving average, and a retest of the recent low at 5504 now appears inevitable. We are skeptical that this level will hold, with next critical support near 5400 (see chart below).

Given Friday’s ugly close and current policy overhangs, we anticipate a wave of panic selling at Monday’s open. At this point, a sharp market correction may be the only effective restraint on the Administration’s increasingly disruptive economic policies, which are being wielded like a wrecking ball against global financial and political stability.  

Stay frosty, folks. Buckle up.