Big Tree Fall Hard, Right?

We have some sharp reversals off yesterday's small cap-led rally taking place so far today, as the toll of sticky high rates and and now oil prices climbing seems to be manifesting itself on even the most complacent segments of equities. 

As I write this, small caps in the IWM, China internet names in the KWEB ETF, the mid-caps in the MDY, biotechs, all seem to be on the precipice of rollovers at or near multi-month/quarter lows. 

That said, we have Netflix and Tesla earnings tonight which will surely have some type of impact of mega cap tech sentiment, before we hear from the rest of the gang in the next one-to-four weeks (AAPL AMZN GOOGL META MSFT NVDA, etc.).

And Fed Chair Jay Powell speaks in New York City tomorrow, where he could easily drop a hint or two as to what he is thinking for the looming November FOMC.

But I still maintain that with rates pushing on higher and corporate credit deteriorating alongside what has been a uniquely narrow equities market, we have the makings of a substantial risk/reward ratio favoring downside going forward above all else.