From my limited knowledge, the history of CB interventionist programs on stock markets has been overwhelming positive. Even though the impact of those programs on currencies and commodities (price inflation) has been disastrous for countries involved.
The next strong support that I see on the S&P is 1876 - 1979 level. If that breaks, then the next level looks like 1805. If Europe shows some strength, then perhaps we test 1960 - 1970, but I'll be surprised if we break through that level at any point this week. The best bullish case that I can think of is that a lot of people have been expecting a correction. So because of that, maybe it won't be a big correction...just a 10-15% correction.
The market has virtually priced out a SEP rate hike as of Friday. Fed is not above (Bullard) jawboning market up with dovish comments. Not specifically a US issue here but the FEd as the sole major central bank with a desire or bias to tighten , it seems, could relieve some stress with a statement of accomadation, specifically comtinuing ZIRP.
This will be key, imo. Upcoming FOMC speeches/comments/minutes will pull huge weight over the next week over how this correction unfolds. We get comments about rate tightening, man, ES will drop harder then a stone. "Concern" over the market with reconsideration about future hikes, and this train slows down etc....
Mon Aug 24 3:55pm USD FOMC Member Lockhart Speaks Wed Aug 26 10:00am USD FOMC Member Dudley Speaks Aug 27 Day 1 ALL Jackson Hole Symposium Sat Aug 29 USD FOMC Member Fischer Speaks
Something to consider is that's only because the market dropped before the Fed did anything. An alternative way of looking at it could now be that the market has priced in a Fed rate increase - which was widely thought to have a "negative" effect on the market on actual announcement. Now that being said, I do NOT think the Fed will raise rates anytime soon. I think they're fucked.
Think about the debt angle, as well. Half the 19 Trillion dollar national debt revolves on a 5-year maturity. They hike for an extended period and debt service payments eclipse budget revenues real fucking quick. They've painted themselves into a corner. Every trader worth their salt knows it.