Breaks below support levels are never a good thing.
But there is always a silver lining. Breaks below support get the bulls to throw in the towel, thus turning these investors bearish. But it is in these types of environments (too many bears), where market bottoms are made. So as I see it, we need to see this kind of ugly price action before we can have a market bottom and reversal.
Figure 1 is a daily chart of the S&P Depository Receipts (symbol: SPY). The red and gold dots are key pivot points, which are the best areas of support (buying) and selling (resistance). This morning, the SPY broke below the key support level at 130.20. This is now resistance. The next level of support is below the 200 day moving average at 128.04. A close back above 130.20 would be a close above resistance, and this would represent a price reversal. Within the context of bearish investor sentiment (i.e., bull signal) that kind of price action would represent a complex market bottom. (See HERE for the different type of market bottoms.)
Figure 1. SPY/ daily
Figure 2 is a daily chart of the PowerShares QQQ Trust Series (symbol: QQQ). The 61.18 support level is now in the rear view mirror with the next level of support at 59.21. 61.18 is now resistance.
Figure 2. QQQ/ daily
If you are long the market, the price action must be looking kind of bearish. If you have been sitting on the sidelines (as I have suggested since early April ) the price action must be looking kind of bullish. There is always a silver lining!