The market selloff gained momentum on Monday with the S&P 500 falling below the 30-day EMA and approaching the lowest levels in over two weeks. If the index continues to fall and breaks below the 4,500 level, a move down to 4,300 is the most likely scenario.

The selling is due to the combined impacts of COVID-19 and Joe Biden?s agenda falling apart. On the one hand, the Omicron variant threatens to bring the global supply chain to a standstill while on the other, Biden?s failure in getting his agenda through Congress is weighing on the GDP outlook. In both cases, the growth of S&P 500 earnings is in question and that is never a good thing for the stock market. If the market is forced to re-evaluate the outlook for S&P 500 earnings growth and lower the estimates the index could fall well below the 4,300 level as well.