Why it could get even worse for the markets

The markets got a shaking on Wednesday. And, it could get worse.

Federal Reserve Chair Janet Yellen shook the markets by implying there could be as little as just six months between the end of the Fed's monetary stimulus and an increase in interest rates. The market benchmark S&P 500 index closed Wednesday down 11.48 points (0.61%).

Yellen's comments came as the Fed is removed its unemployment target of 6.5% as one of its objectives in determining its next steps in monetary policy.

(Watch: Wall St drops after Yellen moves up possible rate hike)

According to CNBC contributor Andrew Busch, editor and publisher of The Busch Update, the economy is seeing some improvement despite bad winter weather and earnings misses by bellwether companies Oracle and FedEx.

"We're starting to see already things improve with industrial production and some retail sales coming out to be very good," says Busch, who notes that the S&P 500 index is trading at roughly 15.5 times 2014 earnings and 14.4 time 2015 earnings. "The biggest question for the market is whether multiples can continue to expand."

Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, says that while the S&P 500 is still above key support at 1,850, breaking below that level could set the stage for a test of its 50-week or even its 100-week moving averages.

And that's a big drop down.

The 50-week moving average is at 1,725 (7% below Wednesday's close) and the 100-week moving average is roughly at 1,575 (16% below).

"We haven't had a test of the 50-week moving average since 2012," says Ross. "We haven't seen the 100-week since 2011. A 15% pullback within the historic context is typically normal."

(Read: Why equities sold off despite a dovish Fed)

Ross says there are reasons to worry in the shorter-term that could make a pullback possible. Things are starting to look a little too much like 2011, according to Ross.

"[In] 2011, [there] also [was] an erosion in the emerging markets just like we're seeing today with Russia breaking down, Mexico, Brazil, China," says Ross. "It's not pretty out there. Copper is breaking down to a fresh, multiyear low. We're seeing the same type of macro erosion in the back drop that we had that precipitated a 20% pullback in the S&P back in 2011…. That's the cause for concern."

To see the full discussion on the markets and S&P 500 index with Busch on the fundamentals and Ross on the technicals, watch the video above.

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