Risk-off sentiment in stocks and crypto could drive volatility higher and lead to a further pullback in the S&P 500, according to Fairlead’s Katie Stockton

Risk-off sentiment in stocks and crypto could drive volatility higher and lead to a further pullback in the S&P 500, according to Fairlead’s Katie Stockton

Markets may be entering a new regime of higher volatility amid risk-off selling in stocks and cryptocurrencies, technical analyst Katie Stockton of said in a note on Monday. Stocks were down nearly 2% in early Monday trades amid the ongoing fallout from , while Stockton is keeping a close eye on Monday's price action, which could mark a confirmed breakdown below the 50-day moving average for the with its near 2% sell-off. The S&P 500 hasn't seen two consecutive daily closes below its 50-day moving average since last October, when the index staged a 9% sell-off. In the short-term, Stockton sees support for the S&P 500 around 4,322, representing potential downside of 2.5% from Friday's close, and a further 1% decline from Monday morning levels. But longer-term, the breakdown in stocks and crypto could welcome a new regime of higher volatility that's characterized by more frequent pullbacks in the stock market. Stockton is monitoring the VIX to indicate if this new regime is upon investors. The stock market's "fear gauge" is hovering above the 25 threshold. "As with all breakdowns, we would await confirmation (at today's close) before acting on it, given the market's propensity to shakeouts," Stockton said. While