The market is in a bit of a freefall with a nearly 5% pullback in the S&P 500 (SPY) over the last two weeks. The Nasdaq 100 (QQQ) already down nearly 8% from its highs. The Russell 2000 (IWM) is sliding hard, down 12.5% over the past three months.
At what point does this stop being a correction and start looking like something worse?
The 200-Day Moving Average Is the Line in the Sand
The S&P 500 is coming up on a critical technical level — the 200-day moving average. If it holds, this is just a correction. If it breaks, things could get much worse.
The 10% correction zone sits between 5,750 and 5,700. If that area fails, we could see a fast move to 5,500. At that point, it’s not just a pullback — it’s a warning that this market could spiral into a full-blown bear trend.
The Nasdaq 100 has a bit more room to fall.
A 15% to 16% correction wouldn’t be out of the question, and the rotation away from big Tech names is already hitting stocks like Apple (AAPL), Microsoft (MSFT) and Nvidia (NVDA) hard.
Why This Could Get Worse
The sell-off isn’t just about technicals — it’s about policy.
The market expected deregulation and tax cuts in 2025. Instead, it got tariffs, geopolitical tension, and mass layoffs. Tech is getting crushed. The only sectors holding up are Health Care (XLV) and Financials (XLF), and even those aren’t doing enough to stop the bleeding.
If the selling continues into next week as we head into March, the risk of a double-digit decline grows. A 7% to 10% pullback is one thing. A 15% to 20% slide is a whole different story.
So what’s the move?
If the market stabilizes at the 200-day, it’s a buying opportunity. If it breaks, traders need to be prepared for deeper downside.
This is the moment where stocks either find their footing — or things get much, much worse. As always, it’s best to be prepared.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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