After the biggest one-day fall in US stocks in more than two years on Tuesday, bulls are keeping a close eye on whether the S & P; can hold its key support near 3900, and market technicians warn that if the index falls below that level, it suggests that there will be a bigger decline in the future.

Market technical analyst Andrew Andrew Adams wrote in a research note: "if the S & P 500 falls below 3900, market risk will rise and bulls must now have all in to support the stock market to prevent further declines. "

The s & p 500 fell 4.3 per cent to 3932.69 on Tuesday, its lowest close since Sept. 6, after the consumer price index (CPI) for august showed that inflation did not cool as expected. The Dow Jones industrial average fell more than 1200 points, or 3.9%, and the Nasdaq composite index fell 5.2%, the biggest one-day percentage decline in the three benchmark indices since June 11, 2020.

Adams wrote that it is not surprising that a "battlefield" is formed between 3900 and 3950. He pointed out that this area has been very important since the beginning of 2021, both support and resistance. Adams said it would be very disturbing for the S & P 500 to fall below that level because it means that bears are still in control.

When the S & P rebounded from the 3900-point region early last week, market technicians saw the region as an important bottom line.

Analysts at Bespoke Investment Group believe that the 3920 region is crucial because it is the region where the S & P 500's rising trend line from its 2022 low hit on June 16 begins.

Bespoke analysts wrote in the research report, "from historical data, September is already the weakest month of the year, if this trend line is not maintained, then the stock market outlook will not be very good." "

The s & p 500 index closed at 3920 on Wednesday, rising 0.3% to 3946.01, but fell to an intraday low of 3912.88.

Adams believes that there is still time for the S & P to rebound beyond the range of 3900-3950, but the rebound must happen as soon as possible.

Worryingly, he wrote in the research paper, "the deeper the stock market falls, the more likely it is to start a new downward trend and the lows will become lower." If the stock market wants to reverse the decline and surpass the recent high, it is urgent to break through the range of 3900-3950. "