S&P 500 Breaks Below 1200 for the First Time Since October; Next Stop 1100?

On Monday, U.S. equity markets fell over 2% as the congressional Super Committee is unable to reach a debt reduction deal by Wednesday's deadline. Also, continued fears of contagion spreading across Europe added to the decline. The S&P 500 broke below 1200 for the first time since October 24th, which is a major psychological level for the index. Benzinga's Weekly Radar highlights the short/mid term technical levels for major asset classes in it's weekly report and has the 1200-1210 range as a major technical support level. With this break, bearish sentiment reigns. Benzinga recently spoke with Katie Stockton, Chief Technical Strategist at MKM Partners, to get her take on the future of the U.S. equity markets."I do not believe this is a breakdown just yet," Stockton said. "I am watching the 1215 level in the S&P, rather than the 1200 level, and I am waiting for consecutive closes below 1215. I watch for two consecutive closes below my target to avoid whipsaws." When looking at the Relative Strength Index, it is showing oversold conditions. However, if markets continue to plummet, we could see the S&P drop all the way to 1100."If we get consecutive closes below 1215, which will likely happen, it would confirm a breakdown," Stockton continued. "There are further levels of support on the way down, but ultimately and unfortunately for the longs, we could see the S&P consolidate to the 1100 level."With today's plunge, we have seen the S&P take out a decent level of support in the 50-day moving average and psychological 1200 level. The index is currently testing the 38.2% Fibonacci retracement level. A break and close below this level would be further seen as bearish.If the S&P 500 falls to 1100 in the short/mid-term, it would represent a 7% decline from current levels. At the time of posting, the S&P 500 Index is trading down 28.54 points or down 2.35% at 1187.11. Sign up for a free subscription to the Weekly Radar - Benzinga's weekly newsletter highlighting technical levels and analysis for major markets for the week ahead.