Tuesday's Weakness Brings Stocks Back to the Brink

There's still a chance stocks can bounce back from their recent selling... or reselling, to be specific. But, the odds of that outcome are quickly fading. One more bearish day could push all the major indexes past the point of no return.

That's just one perspective and possibility, of course. The present market environment has been and remains wildly unpredictable, as if two factions - bearish and bullish - are trying to make a point to one another while neither side is thinking about fundamentals and values. Those are tricky environments to navigate. Should stocks suffer one more rough day though, odds are good everyone will agree the bearish floodgates have been opened.

This premise is plenty clear with the daily chart of the S&P 500. Tuesday's low of 4267 is in line with the lows made at the very end of January as well as the beginning of October. And, that low is within reach of the multi-week low of 4223 hit in the latter part of last month. The bulls who've held the line here so far may be wary of making the stand for a third time, fearing the repeated breakdown efforts will eventually do their thing and break below established floors.

The NASDAQ Composite is in a similar (though not identical) situation. Tuesday's low of 13,250 more or less lines up with January's low. One slip-up could pull it below that mark, and convince most near-term-minded investors there's nothing supporting stocks here.

Not even blue chips are immune. The Dow Jones Industrial Average is also toying with a key technical floor, or zone, between 33,567 and 33,239, which has been support for the better part of past several months. Tuesday's low of 33,364 was squarely in between those two levels.

The fact that all of the key indices are nearing breaking points underscores the reason for concern. Were it just one or even two nearing the edge of the cliff, it might be dismissible? To see all three indices near a breaking point at the same time, however, suggests there's something psychological going on here.

And that's a big problem. If there's some subconscious or unconscious bearishness brewing in the back of investors' minds here, they may have already mapped out the selloff. Now they're just waiting for a trigger, or catalyst. That's (possibly) the next move under the aforementioned floors. If-and-when that support breaks, even the most resilient of bullish may opt to throw in the towel for a while and let the bears finish the job.

It's just something worth bearing in mind, of course. You should also keep in mind the market just might use these floors as a pushoff point for a rekindled recovery.

Either way, we're at the inflection point right now.