The S&P 500 just did something eerily similar to 2000 in addition to 2007

Wall Street was awash in a sea of red for a second session on Thursday.

The S&P 500 plummeted nearly 7 percent coming from its late September record, shedding more than 5 percent in just two days in addition to sending nearly one-third of its components into a bear market.

Its two-day plunge had the item crashing through several key technical levels, according to Craig Johnson, chief market technician at Piper Jaffray.

“We’ve broken back below these January lows. of which’s a little bit more of an ominous signal coming from the chart perspective,” said Johnson on CNBC’s “Trading Nation” on Thursday. “We saw similar set-ups to of which in 2000 in addition to also in 2007,” two of the largest in addition to most recent prolonged sell-offs.

By late Thursday, the S&P 500 was trading at levels not seen since early January. the item also broke through its 50-day in addition to 0-day moving averages of which week, a sign of rapid cost declines relative to longer-term trends.

With those levels at of which point breached, Johnson said the next support line sits at around 2,745.

“I think we’re going to touch of which in addition to maybe even undercut of which a little bit in addition to probably find some support around 2,700,” said Johnson.

The S&P 500 can be just 0.6 percent coming from 2,745, a level not seen since July. Another 1 percent drop might take the item down to 2,700. the item broke above of which level in June.

There’s no shortage of catalysts of which could take the S&P 500 down to those levels, said Johnson.

“When you start looking around the earth in addition to you start looking at the big breakdown inside DAX, in addition to the Shanghai composite in addition to what’s going on inside bond market in addition to financials sectors not participating in of which advance, there’s more problems out there of which we need to pay attention to,” said Johnson. “I think we’re going to see a deeper sell-off.”

Stacey Gilbert, market strategist at Susquehanna, shared her strategy to protect against any further stock market damage with “Trading Nation” on Thursday. She recommends owning a protective out-of-the-money put in addition to selling an upside call against of which to finance the protection.

“the item’s going to give me the downside exposure of which I want, ideally the rest of my portfolio has some outperformance of which of which short upside call of which I have isn’t going to be as significant to the rest of my portfolio,” Gilbert said.

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