SPX, QQQ Breakdown brings test of March lows into play

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Unfortunately, Friday’s breakdown can’t be considered anything but negative, and this damage needs to be recouped right away on Monday to prevent a retest of March lows. Technology, in particular, has pulled back to a “Make-or-Break” level when eyeing QQQ along with SOX, and failure to hold recent lows next week will postpone the idea of a rally until mid-April. An imminent reversal next Monday, the final trading day of the month and quarter, is still possible, of course, and would prevent a larger breakdown. However, given the large high-to-low range in Friday’s session, it seems like either a positive catalyst over the weekend or more extreme evidence of capitulation on Monday would be necessary before claiming that March lows will hold.  

Overall, it goes without saying that March lows now take on huge importance for this selloff heading into next week. Unfortunately, Friday’s damage was not something I had forecast heading into the end of the month and quarter. However, it’s important to simply concentrate on what’s changed in the last 24 hours, and I’ll attempt to do this below.

As can be seen below, SPY has little wiggle room before testing the lows from mid-March.  Struc...
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