With the U.S. stock market in the midst of an October sell-off, Wall Street analysts who study charts for a living are worried the situation could get much worse. Among the reasons that have technical analysts concerned are a breakdown in the bull market leaders and a drop by the S&P 500 below its average price of the last 50 days.
The S&P 500 is down 2.5 percent for October and counting amid Wednesday's slide.
"The selling is a result of selling the best performing stocks this year and it is difficult to time when that selling pressure will slow," said JC O'Hara, chief market technician at MKM Partners, in a note. "The best-performing decile of S&P 500 stocks this year is lower by 6.6 percent in October. Today, that basket is lower by 1.7 percent (the worst of all 10 deciles)."