This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Messy further test of the weekly lows and as the tape remains caught in the swirl of Covid caution ahead of a weekend, a jobs report that did nothing to alter the Federal Reserve's path and the – most immediately – ongoing liquidation in story-stock secular-growth tech pressuring the broader Nasdaq . S & P 500 so far trying to hold the lows from earlier in the week. Interestingly, the index fought back just about to last Friday's closing levels by this morning but gave way with potential dip-buyers probably wary of weekend headline bombs related to omicron. Not saying they will be alarming/unexpected/damaging, but the market hasn't been fully tested for resistance to them yet. Bigger picture, the index keeps fighting it out around key uptrend levels, again slipping below the 50-day average and hovering above the 100-day which ended up serving as the culmination of the September-October pullback. One reason – along with lots of oversold conditions – that chart followers figure this is buyable for a bounce before too long. This is now the third 5% pullback of the year. In this sense, it's still an unusually calm year in terms of risk vs. reward. Yet the average stock has had it far worse, only about 15% of stocks now in a shallower pullback than the index itself and the median S & P 500 stock down 11% from its high. The implosion of growth darlings in fast-growing "disruptive" tech is now a disorderly stampede of selling, likely putting many funds in emergency mode and having traders cut back exposure more broadly into an agitated tape. ARK Innovation , IPO ETF and CLOU cloud software ETF all round-tripped to their pre-vaccine peak November 2020 levels. This is roughly how the Nasdaq complex felt post-year-2000 peak, waves of selling as first price momentum and then fundamental momentum broke, making them less fun to own and trade as investors moved on to other plays. So far, it's still just one (large but discrete) part of the market hemorrhaging. More than one in eight Nasdaq stocks making a new 52-week low today, nasty. Traders seem to be trying mightily to make $1,000 in TSLA and $300 in NVDA hold. Signs of pain in hedge-fund and speculative-trader realms are evident in the inversion of the VIX futures curve, near-term contracts trading above those further out in time. This is an upside-down set-up, means acute and urgent hedging needs, often a prelude to a peak in panic and eventual relief rally, but need to see it go back in line before long. It's among several signs of surging pessimism – surveys, heavy put-option buying, etc. – which ultimately will line up as net positives on a contrarian basis. But no way to pinpoint when a flight from risk will run its course or from what levels things turn. A miss on headline jobs number for November was offset by strength in labor force participation and big drop in the unemployment rate, fitting with the Fed's idea of a quit-tight labor market much closer to its employment goal than the Fed is to its inflation target. Thus, quicker taper of quantitative easing on track, then we wait to see if inflation ebbs before penciling in rate hikes. The information fog on omicron as a threat to growth is interrupting what would otherwise likely be a rotation toward cyclicals as tech is purged. Market breadth is not as bad as one might expect, NYSE 75/25 down/up volume and the equal-weighted S & P is down only half as much as the main index. Heavyweights of the Nasdaq having outsize impact there. Credit is not in panic mode, still hangs in OK but need to watch for further softening. VIX itself above 30 again, not settling back the way bulls want. Again, just too much pressure on active portfolios and high VIX is a restraint on other players coming in to take the other side of those liquidating. Failure of VIX (now 30.5) to go above Wednesday's peak of 32.6 would be a modest net positive for stocks.
Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City.
Spencer Platt | Getty Images
This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.
- Messy further test of the weekly lows and as the tape remains caught in the swirl of Covid caution ahead of a weekend, a jobs report that did nothing to alter the Federal Reserve's path and the – most immediately – ongoing liquidation in story-stock secular-growth tech pressuring the broader Nasdaq.