Last week was truly one to forget for the bulls. Sellers stepped in towards the end of the week, and the overall market closed at the lows on Friday.

The above map from Finviz paints the picture of last week’s performance across the market. A sea of red.

SPY was down 1.66% on the week, QQQ – 1.33%, IWM -2.77%, XLE -1.73%, XLF -1.31%, and IBB – 1.57%.

As the month progresses, traders and investors will be eagerly anticipating two key events.

On Friday, September 20th, it is the monthly OpEx. Traders will be watching this to see whether institutions roll their positions out to further dates.

The FED will meet on September 21st and 22nd, followed by Jerome Powel’s press conference at 2 pm on the 22nd. Market participants will be eagerly listening for potential talk of tapering.

The Overall Market

It’s common to get consumed by one gloomy day in the market. Thoughts of a market crash or significant correction can quickly outweigh other rational thoughts.

That is why it is so essential to always zoom out and look at the bigger picture.

SPY, even though it was negative on the week, remains up 19.14% year to date. On the month, as of Friday’s close, SPY is up 0.37% and almost 5% on the quarter.

As we near the year’s final quarter and critical upcoming catalysts and events, it’s vital to be aware of key levels of support and interest.

The ultimate level of support in SPY is the uptrend. This level of support is between $440 and $443. A move that firmly clears this level of support, and fails to reclaim the uptrend, would signal that a potential correction is ahead.

The SPY is below the 20d SMA but remains above the 50d MA as of Friday’s close. The 50d MA is roughly the same price and level as the support of the uptrend. Once more, this further signals the importance of the market remaining above the uptrend.

As of right now, the market is merely pulling into support. In this regard, the market is still innocent until proven guilty.

Bulls will want to see the market find support above the trendline and push towards $450, while the bears will want to see the SPY break the support and hold below.

The Biotech Sector

The iShares Biotechnology ETF, IBB, was down 1.57% last week. However, over a year, the ETF remains up over 36% and up over 3% on the month so far. Year to date, the sector is up 14.35%.

As with SPY, the IBB is still trading above support and firmly in an uptrend.

The IBB is trading above all three key moving averages, as seen in the above chart. This signals that the ETF continues to have a primary trend to the upside.

The nearest level of support is the 20d SMA, which is currently at $171.50.

The next level, and a significant one, is the support of the uptrend. Support of the trend is around $170, and similar to SPY, the bulls will not want to see the IBB break below this uptrend and hold below.

The following two key support levels would be significantly lower if the ETF were to trade below this uptrend and continue. The first is at $165 and the second level is at $160.

In the future, the bulls will certainly like to see the IBB continue to hold above the uptrend and push towards $175 – $176.

If the IBB can reclaim $175, it might signal a potential breakout in the sector.