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Chartology: Flirting With Disaster

The S&P 500 broke down below its February 2007 low in Wednesday’s late day sell-off. Does the market's action signal more pain ahead?

Oppenheimer Chief Market Technician Carter Worth joins the panel for this conversation. Following is a summary of his main points.

The action in Wednesday's market suggests to me that we are headed lower, Worth says. The pattern is ominous so look out below.

When a bull market rallies each time it should make a substantial new high. That hasn’t been happening. I believe we will head lower on the S&P, to about 1300 in the coming months.

Would a rate cut help?

We’ve already had 3 rate cuts. Can you solve the sins of excess liquidity with more liquidity? Money is cheap right now, he says. That’s not our problem.

What do you think? Tell us right now. Answer the Charles Schwab Question of the Day.

For an in-depth look at the charts used in Worth’s technical analysis please watch the video.

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Trader disclosure: On Jan 16, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (YHOO); Najarian Owns (C), (CSCO), (BIIB), (FRE),(MCD), (TIBX); Najarian Owns (AAPL) Options, (YHOO) Options, (WM) Options; Finerman's Firm And Finerman Own (CROX); Finerman Owns (GS), (TSO), (VLO), (WMT), (YHOO); Finerman's Firm Owns (MS) Options; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns (MDY) Puts And Is Short (MDY); Finerman's Firm Owns Russell 2000 Puts And Is Short (IWM); Finerman's Firm Owns S&P 500 Puts And Is Short (SPY); Finerman's Firm Is Short (IJR), (IYR); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts

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