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These are the big levels to watch for the S&P 500 and Nasdaq. Expect ‘wild trade,’ if they break, warns this strategist.

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The holiday spirit is thin on the ground, with global assets in the throes of a massive sell-off as we start the countdown to Christmas.

Blame the growing alarm about the omicron coronavirus variant, of course, but smut may appear in the stockpile of Sen. Joe Manchin, who nearly torpedoed President Joe Biden’s Build Back Better plan, and prompted Goldman Sachs to reduce its growth forecasts in the United States.

And with traders gradually checking the holidays, volatility may be no stranger to the markets this week. Our call of the day, Miller Tabak + Co. chief market strategist Matt Maley offers all of the major index levels investors should watch out for, and he warns that “wild trading” could ensue if one ‘between them broke.

β€œAs we learned too well last week, there is still a lot of volatility in the stock market as the end of the year approaches. Sure, 2021 could act like an ‘old soldier’ ​​and just ‘ disappear “… but if the key short-term support / resistance levels are broken, that could still lead to a big move before the end of the year,” Maley said in the note to clients.

He said that, since the markets are currently very active in the options market, with dynamics-based algo strategies (using computer programs to automate the buying and selling of assets, from contracts to contracts. term, options, etc.), investors could see disproportionate movements.

Maley explains that if a key support level falls to the downside, it could trigger what is known as a “negative gamma”, pushing markets down significantly and exacerbated by momentum-based “algos” that depend a lot on this strategy. On the flip side, if stocks break through key resistance areas, it could trigger positive gamma, with algos buying stocks in a rising market, causing moves upward.

When it comes to resistance levels Maley points to recent highs of 4,712 for the S&P 500 SPX,
+ 0.62%,
16,057 for the Nasdaq Composite COMP,
+ 0.85%
and 2,443 for the Russell 2000 RUT,
+ 0.89%.
β€œIf these indices can exceed these levels substantially, it should lead to a very nice Santa Claus rally,” he said.

Meanwhile, support levels are marked by early December lows for all three indices – 4,513 for the S&P 500, 15,085 for the Nasdaq and 2,130 for the Russell 2000. Maley said the lows in early October are much higher support levels, but these will likely be an issue in 2022 rather than this year.

The buzzing

β€œI tried everything humanly possible. I can’t do it, ”Manchin told Fox News Sunday, referring to months of negotiations over Biden Build Back Better’s $ 2 trillion bill. White House press secretary Jen Psaki called her announcement “sudden and inexplicable.”

Modern mRNA,
-0.55%
Shares are erupting, after the pharmaceutical giant said a study of 20 patients showed its COVID-19 booster lifted protection against the omicron variant 37 times.

Senators Elizabeth Warren of Massachusetts and Cory Booker of New Jersey have both tested positive for COVID-19; both are fully vaxxed and boosted. And as European countries consider further restrictions, with the Netherlands already on lockdown, White House senior medical adviser Dr Anthony Fauci has warned of a tough winter ahead for the United States, but no locking.

“Spider-Man: No Way Home”, the third installment of the Disney DIS,
+ 1.15%,
Marvel and Sony SONY,
+ 0.62%
trilogy, broke box office records this weekend.

Novo Nordisk NVO,
-1.34%
shares are down, after the Danish pharmaceutical company said it could not meet demand for its new weight loss drug due to supply issues in the United States.

BNP Paribas BNP,
-0.42%
sells its US unit, Bank of the West, to the Bank of Montreal for $ 16.3 billion in cash.

The steps

Stocks slumped across the board, after losses in Asia and a 2% drop in Europe SXXP,
-0.10%.
CL00 oil price,
+1.37%

BRN00,
-0.26%
were also down sharply, and GC00 gold,
+ 0.44%
was also under pressure The 10-year Treasury yield TMUBMUSD10Y,
1.495%
rating is also down, falling back below 1.4%.

Top tickers

Here are the top tickers on MarketWatch, at 6:00 a.m. EST:

Teleprinter

Security name

AMC,
-0.56%

AMC Entertainment

TSLA,
+ 5.76%

You’re here

GME,
-1.21%

GameStop

ES00,
+ 0.66%

Future continuous contract E-Mini S&P 500

NIO,
+ 2.24%

NIO

DXY,
-0.01%

US dollar index

TMUBMUSD10Y,
1.495%

10-year US Treasury bill

NQ00,
+ 0.82%

Continuous contract of the E-Mini Nasdaq-100 index

DJIA,
+ 0.55%

Dow Jones Industrial Average

AAPL,
+ 0.36%

Apple

Random readings

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Aspiring “Buddy the Elf” is on a mission to boost morale in this North Carolina town.

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