A couple points of reference, both of which suggest there's more selling ahead...
First, early-August 2011 the NYSE Composite's RSI fell to 30 (top panel), this following a period of technical weakening as $NYA was topping. Here we are again. As you can see, there could be a whole lot of selling straight ahead.
Coincidentally, early-August 2011 was when the NYSE Composite Index fell below its [then rising] 200-day moving average. Today the index fell below its [now declining] 200-day moving average. Should the market's long-developing underlying technical weakness (now seeing some measures, like daily RSI, reach an extreme) presently precipitate an avalanche to the exits the dimension of selling yet in store gains further perspective with indication the current backdrop is weaker than last summer.
Somewhat tempering dire, near-term prospects is the second point of reference, wherein via its similar technical setup at May 1st, 2011 top, and then its subsequent behavior, momentum (bottom panel) might be seen suggesting bottom is not far off. Nevertheless, an approach of readings at early-October 2011 bottom presently appears in store.
Of course, an historic transition possibly unfolding in one devastating blow after another could be underway. So, we instead might find momentum imminently challenging its August 2011 low as the NYSE Composite Index craters to complete formation of a head and shoulders top. The present backdrop certainly favors this possibility.
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