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The last best hope of the market...that the party wasn't really going to end...that the Fed wasn't really going to slam the brakes. Well that dream ended this week. From what we can tell, the great pandemic rally, the single greatest display of central bank largesse in living memory, is finally over. 

So what do the charts suggest? The S&P is in a sorry technical state. The S&P has finally closed below its 200 day moving average. The last time this happened in recent memory? You might have guessed.

• February of 2020: 
  • An initial drawdown of 13% that paused on the way to a 32% peak to trough 
• October of 2018
  • An initial drawdown of 9% that paused on the way to an 18% peak to trough 

Where are we now? Down ~8% from the weekly peak of December 31st, 2021. We likely have more pain ahead. 

But in the end, the real question is this. How far down and how long before the Federal reserve back pedals? Or not? And what shape will it take?