Equity markets pulled back on Thursday after the reality of the FOMC's latest rate hike was digested. The hike, another 25 basis points, puts the base rate at over 550 basis points and the highest level in over 2 decades. The full effect of the already implemented hikes has yet to be felt, which means that economic headwinds will persist for at least another year. In this scenario, more banks will fail, leading to consolidation within the industry and ever-tightening credit conditions.

The S&P 500 fell more than 0.65% at the session's low and formed a Bearish Attack Pattern. The pattern suggests a top to the market and could lead to a correction. The question is how deep the correction will be; investors should expect to see the market fall 1% to 3% at least before it hits bottom. If today's PCE price index confirms the need for additional interest rate hikes the sell-off could be monumental.