A combination of rising bond yields and the margin call issued on a hedge fund are driving the S&P 500 and other US markets lower this Monday.
A hedge fund, which has been identified as Archegos Capital, is said to have defaulted after getting a margin call on Friday, hitting the stocks of some of the biggest banks heavily. The decline in the financial stocks has sent the S&P 500 lower by 0.57% as of the time of writing. The index was down 1.2% at a point, but bulls have been able to pare some of the losses.
Today’s decline met support at the 3950.4 support line. The picture on the daily chart is that of a double top, with the neckline at the 3870.0 support line. For the pattern to evolve into a downside correction, bears must take out the support levels at 3910.5, along with a breakdown of the 3870.0 neckline and the 3823.9 support, with 3765.1 serving as the price projection from the measured move.
On the other hand, a break of the double top allows the S&P 500 index to break into new territory, with 4005.9 serving as the potential initial target from the breakout move.
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