Equities started the week on shaky footing and it looks like there will be no Santa Rally this year. The S&P 500 shed more than 1.0% at the low of the da making this the 5th consecutive day of selling and putting the index at the lowest level in over a month. Simply based on the chart action, it looks like the market made a quick about-face when it reached the 4,100 level in early December and now the selling is gaining momentum.

The driver of the move is inflation, the FOMC and the belief a recession is on the way. the takeaway for investors is the FOMC will have to curb economic activity in order to stop the growth of inflation and that can only lead to recession. In this light, the S&P 500 may not only retest the lows near 3,600 but continue downward well into next year and eventually retest the pandemic-induced lows of 2020.