<p style=““ class=“text-align-justify“>The over 1% drop in the S&P 500 yesterday saw a daily close below its 50.0 Fib retracement level of the swing higher from October, seen at 3,796. That has been a level limiting further downside in the past week, before we headed into the Christmas break.</p><p style=““ class=“text-align-justify“>But as we move towards the turn of the year, sellers are taking charge and pushing the agenda, in search of the next downside leg for stocks.</p><p style=““ class=“text-align-justify“>The double-top pattern around 4,100 has a downside target of around 3,760 and that will be the next level to be mindful of before we look towards the November low at 3,698 for the S&P 500 index.</p><p style=““ class=“text-align-justify“>As much as stocks had been hopeful for a major rebound on the back of a Fed pivot of sorts, we’re still not quite at the point where the Fed and other major central banks are resigned to putting a complete stop to their respective tightening cycles.</p><p style=““ class=“text-align-justify“>Much like how the dollar has a few key considerations to take into account <a target=“_blank“ href=“https://www.forexlive.com/news/two-reasons-why-you-should-not-to-discount-the-dollar-20221223/“ target=“_blank“ rel=“follow“>here</a>, it is the same story for equities as well.</p><p style=““ class=“text-align-justify“>The inflation outlook remains pivotal but as mentioned <a target=“_blank“ href=“https://www.forexlive.com/news/the-technical-story-is-the-one-to-watch-for-stocks-ahead-of-the-turn-of-the-year-20221226/“ target=“_blank“ rel=“follow“>here</a> previously, do not brush aside the implications of the technical picture that is playing out at the moment – as also seen above.</p>

This article was written by Justin Low at www.forexlive.com.