March 27, 4:00 pm EST

The sharp swings continue in stocks, with the bias toward the downside.  And as we’ve discussed over the past two weeks, it’s all led by the tech giants.  Remember, on Friday we looked at the most important chart in the stock market: the chart of Amazon (as a proxy on the tech giants).  Early this afternoon, Amazon was outpacing the S&P 500 to the downside by 4-to-1, and finally the broader market cracked to follow it.

This all continues to look like the market is beginning to price in a world where the tech giants, that have taken dangerously significant market share over the past decade, are on the path of tighter regulation and a leveling of the playing field, which will result in higher costs of doing business.  That will change their position of strength and open the door to a resurrection of the competition.

Remember, on the stock slide of this past Friday, the S&P 500 hit the 200-day moving average and bounced sharply.  It now looks like we’ll get another test of it, probably a break, and maybe take another peak at the February lows.

Here’s a look at the chart ….

You can see in the chart above the technical significance of these levels.  This represents the trend from the oil price induced lows of 2016.  And the slope of this trend incorporates the optimism from the Trump election and the outlook on pro-growth policies.

With that significance at play, a breach of this support, at least for a short time, would all play into the scenario that we’ll see more swings in stocks (pain for the bulls) until we get to earnings season, which kicks into gear on April 13.  And as we discussed, that should begin the data-driven catalyst for stocks (earnings and growth, fueled by fiscal stimulus).

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