This is your mid-week analysis of the major markets from a technical perspective. I'm using the SPY, QQQQ, and DIA ETFs as a proxy for the S&P 500 Index, NASDAQ 100 Index, and the Dow Jones Industrial Average.

S&P 500 Index

The SPYders have broken below their Bottom Acceleration Band and below the key 1200 level. They bounced back above the Band yesterday, but are sharply lower again, as of mid-day today. At this point, it now looks like 1200 will become an overhead resistance level on rallies, and we may test the 2005 lows of 1100 to 1150. However, with overall market sentiment reaching almost "panic" level in many different areas, the possibility of strong upside bounce is also likely, too.

S&P 500 Index Daily Chart (SPY)


NASDAQ 100 Index

The QQQQs, which had outperformed for most of this year versus the other major indices, are approaching their 2008 lows around the 41 area. The key 40 strike should also provide some support - but certainly there is some major downside risk in the longer-term QQQQ chart. Daily Percent R and Efficiency Ratio readings are in a very bearish zone - worse than the SPY.

NASDAQ 100 Index Daily Chart (QQQQ)


Dow Jones Industrial Average

The Dow Jones Industrial Average (DIA) has broken below the key 11,000 level today, after pushing back above it yesterday. This index has also moved back below its Bottom Band intra-day today. Downside support for the DJIA resides around the 10,500 level, and beyond that, down to 10,000.

Dow Jones Industrial Average (DIA) Daily Chart


In my view, the bottom line for the major indices is that the technicals look terrible - however, the current overwhelming bearish sentiment view across all the media (basically fear and panic) leads me to believe that a strong bounce is upcoming, once we finally reach bottom in the coming days.

Price Headley is the founder and chief analyst of BigTrends.com.