FM IN-DEPTH: Correction Playbook – S&P Technicals

By Thursday’s close, all the bulls could do was curl up and lick their wounds after a free fall in stock prices sent investors running for the exits.

In fact, by the end of trade, Wall Street had put in its worst day in over a year with the S&P more than 10% lower from the May 2nd high of 1370 – that officially puts the US stock market in correction territory.

Whenever markets make sharp moves such as this, Fast Money always tries to bring you insights from a wide range of pros that may help you navigate the chaos and confusion.

Following are the gang’s thoughts on ….. the S&P  . Or click below for the impact on another area:

• FM IN-DEPTH: Correction Playbook – Stocks
• FM IN-DEPTH: Correction Playbook – Bonds
• FM IN-DEPTH: Correction Playbook—Oil (Web Extra)
• FM IN-DEPTH: Correction Playbook—Gold and Precious Metals
• FM IN-DEPTH: Correction Playbook – Dollar

Technicals

Chris Verrone Of Strategas Research Partners is concerned by what he’s seeing in the charts. “They’re telling us that support is no longer being respected. The March 2011 lows failed on Thursday. That’s a big change,” he says. “Also, the number of 52-week lows has expanded dramatically.” Again he considers that bearish.

As a result Verrone believes “Rallies should be sold.” Although he thinks the market could bounce  – if we get back toward 1260 I’m a seller.

Trader Guy Adami is also looking for a bounce.

“1180 is the next key level to watch on the S&P. That held as support during November and December 2010 and it could hold again," he says.

“I can see the market slip to 1180, test that level, then rip higher. If that happens get out of the way.”

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Trader disclosure: On Aug 4, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymour owns (BAC); Finerman owns (AAPL); Finerman owns (BAC); Finerman owns (JPM); Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Terranova owns (VRTS); Terranova owns (LQD); Terranova owns (IBM); Terranova owns (FCX); Terranova owns (CVI); Terranova owns (AAPL); Terranova owns (GS); Terranova owns (GOOG); Terranova owns (XOM)

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CNBC.com with wires.