Since the  equity indexes went into a freefall last week analysts have been asking how low the market would go and where is the level or levels that signify this is more than just a long overdue correction? It already has surpassed the three major pullbacks this year: January, April and July.

On Monday analysts highlighted the 200-day moving average, which the market fought over briefly but quickly dismissed, blowing that level away. This week the S&P 500 also breached its 50-week simple moving average (see chart from Tuesday, Oct. 14 below).

This appears to be a more serious level. After taking this out in the July of 2011 and remaining below it for the rest of 2011, the 50-week SMA has been remarkably resilient. It was twice breached in 2012 but settled at or above the line. It was again taken out yesterday but is current straddling the line. It will be an interesting battle for the rest of the week and may help define how serious this move is. While there has been a lot of desperate talk, the correction has not reached 10% from the Sept. 19 all-time high of 2014. That would be 1819.25.

Friday update

Take a look at the current (Friday Oct.17) chart (below) for the E-mini S&P 500. The rebound from Wednesday's low picked up this morning and the 50-week moving average we mentioned earlier in the week appears to be back in play. That level, approximately 1883, appears to be an important area to determine if this pullback is nearing an end or is just beginning. 

For optimists, the new upside resistance appears to be the 50-day moving average, which formed a double top of resistance last week after the market first took it out in September.