A flush down to 3300-3400 is the perceived "all-clear" on the valuation case for Equities, with the whole world seemingly bid "out loud" down there for size, which means it either, i) it doesn't happen and we don't trade low enough, or conversely, or ii) we do trade down there, but the supposed size demand doesn't materialize, and we get the puke through 3k.

Today, McElligott doubles down with some "gory details" on how the quad diagram shows the economy careening into contraction (more below) starting with European inflation which continues its escalation, perversely increasing the likelihood of an "accident" there against a still-toiling ECB who risks a "catch-up" hiking spasm into a hard recession—and accordingly EUR Credit markets are staring into the abyss, with Xover earlier printing through 600bps for the first time since "peak COVID" stress