The bears came out in full force on Wednesday.
The S&P turned negative for the year while the the Dow and the Nasdaq posted their worst percentage drops since July 16.
The sharp moves were all largely due to increased fears that the economy may be skidding toward a double dip recession - a feeling that was triggered by the Fed on Tuesday.
And those fears seemed to be underscored by Cisco after the bell Wednesday as CEO John Chambers talked about 'mixed signals' in both the market and from customers during Cisco’s earnings call.
Adding to the negative tone, new data out of Beijing showed factory output slowed. Investors took the data as confirmation that China is slowing down and will generate less demand for resources in the months ahead.
In the wake of so many bearish developments, only five of the S&P's 500 stocks ended the session higher -- and all 10 major S&P sectors closed down more than 1 percent, led lower by the industrials, and the financials.
However, there was at least one positive development. The S&P closed around 1,088 -- the July 30 intra-day low – and technical analysts say it could be support.
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I’ve been faked out on the downside a couple times, says Guy Adami but we’re breaking below some critical levels. We broke below the 200-day on the S&P; that's bearish. Now, 1040 is my line in the sand.
Also the Vix broke higher which is also bearish, Adami adds. And the dollar looks like it’s going higher, that tends to be negative for stocks, too.
Action in the Vix is certainly noteworthy, says Jon Najarian. It blew right through 26, which is close to the 50-day moving average of 26.81. If we break above that level it suggests the market goes a lot lower. And any way you slice it, the move in the Vix says there’s a lot of fear in the market.