The sell-off on Wall Street gained momentum on Monday with the S&P 500 falling roughly 3.5% at the low of the session and setting a new low below 4,100. This is the lowest level the index has traded in over a year and has the market set up for a much deeper fall. Now that the 4,100-4,200 support level has been breached there is a risk that traders and investors who had been buying at that level will become sellers. In that scenario, the 4,100 will become strong resistance that could keep the market from moving higher over the next few quarters.

The next big hurdle for the market will come tomorrow with the release of the CPI index. The Consumer Price Index is expected to advance as much as 0.5% from the previous month and drive another 8.0% or greater increase in YOY inflation on top of last year's mid-single-digit increase. the takeaway is that CPI data will raise the stakes for the Fed and may lead them to go back on their word and bring a 75 basis point interest rate hike to the table.