The rapid breakdown in stocks the past three weeks has technical analysts scrambling to mark out areas where the S&P 500 and exchange traded funds tracking the index could potentially find support and reverse the losses.

“On the S&P 500 the rally of the past two and half years effectively travelled as far as a Fibonacci 78.6% retracement of the 2008 bear market,” said Tarquin Coe at Investors Intelligence in a newsletter Monday. “The rally off the March 2009 low now has the hallmarks of a countertrend correction or dead-cat bounce with in that bear market. Strongly supporting that case is the violation of the trend channel off the 2009 low. Only a quick recovery to the confines and security of that channel, currently rising through 1,290, would reinstate bull market status.”

S&P 500 ETFs have fallen below the trend line from the March 2009 bottom. [Breaking Support]

“Once a short-term base is established a tradable bounce will develop but that would not change the broken long-term picture. We strongly favor a defensive strategy in the weeks, and most likely months ahead, and will not chase risk on the inevitable oversold bounces,” wrote Coe, the technical analyst. “The only area of strength today is the gold miners but they will eventually succumb to the gravitation weight of a sick market.”

Market Vectors Gold Miners ETF (NYSEArca: GDX) pared its gains and was under pressure Monday afternoon.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.