After Federal Reserve Chair Janet Yellen unnerved markets last week with a dovish message and a hold on rates, U.S. stocks have not really known which way to turn.
Yellen's message, which was more cautious than many investors anticipated, threw up fresh worries about the outlook for inflation. This was heaped on the fears about global growth, interest rate and weak commodity prices that have been weighing on stocks throughout the summer.
On Thursday, the S&P 500 fell for the third day and touched levels last seen on September 4th. Technical analysts looking for the next key support level say the dip seen at the end of August is now likely to be tested as a larger number of the 500 constituents of the index are now breaching those lows.
"While the S&P is not below those lows of August 24th, increasingly more stocks each day are breaking below those lows each day," head of technical analysis at Cornerstone Macro, Carter Worth told CNBC.
"Financials are only 1.5 percent above. Financials are the second biggest sector by weight, but there are also the most important sector – that is the life blood of the system," Worth said.
Global head of technical analysis at Credit Suisse, David Sneddon said breaking through the 2,040 level on the was a bearish indicator, with 1,900 now the next key level to watch, with stocks under pressure to test the lows seen last month.
U.S. stocks had their worst start to September in 13 years as investors fretted over the impact of a slowdown in China and the timing of an interest rate rise in the U.S.
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Markets will be keeping a close eye on Yellen's speech due later on Thursday for any hints on the inflation outlook which could also tip stocks in one direction or another.
Since the Fed's meeting last week, commodities have tanked, with copper down more than 6 percent and oil down nearly 5 percent. China, meanwhile, has become an even bigger source of concern for markets, now that some worry the Fed might see more dire economic problems that could spread to the U.S. economy.
Other analysts compared current price action to similar trends seen in October 2011 and July 1998.
Chief investment officer and chief executive at Fasanara Capital, Francesco Filia, said there is a good chance stocks will revisit lows seen last month and a further 10 percent correction from there is possible.
"I believe there is a good chance that the S&P tests August lows and I believe a further 10 percent correction from there opens then up as a possibility, before central banks blink and the upward trend resumes," Filia told CNBC, comparing the current dips to moves seen in 2011 and 1998.
In both cases, the S&P retested lows first within a couple of months, before rebounding, he said. Founder and CEO of DeMark Analytics, Thomas DeMark agreed.
"Both 2011 and 1998 peaked exactly 17 trading days off their respective August 2011 and 1998 closing lows prior to declining to a an upcoming lower low. Current S&P 500 peaked last week after a 17 day rally off its August 24 low. So far the three periods are in alignment,"DeMark said.
"Bottom line is the August 24 low should be undercut," he added.