US Stocks Plunge Below Critical Support, Everything's Red In October

The Dow just tumbled back into the red for October but it is Trannies, Small Caps, and Nasdaq that are bloodbathing this month as risk-parity deleveraging slams US equity markets below critical technical levels...

The Ides of October...

Trannies now up only 1.5% YTD...

As the major US equity indices break below critical support...

Small Caps crash below the 200DMA...

 

The S&P broke notably below its 50DMA...

 

And Nasdaq has broken significantly below its 100DMA...

With aggregate stock and bond returns now significantly negative for 5 of the last 6 days...

With bonds and stocks selling off...

As Risk-Parity funds continue to delever...

And as Bloomberg's Michael Regan notes, massive volumes in S&P 500 puts are part of the reason why equities extended losses so sharply in early trading. Check out the volume in puts expiring Dec. 21 with a strike price of 2,850. The white line is today, while the red line is average volume:

(h/t Gaurav Panchal in London for pointing out.)