Stocks started off well yesterday, with the S&P 500 jumping 1.25% in the first 45 minutes. But buyers quickly lost interest when technology stocks, led by Dell (NASDAQ:DELL), plummeted and erased the early gains. The big PC maker reported slower sales and lowered its revenue target for the full year, driving the stock down 10% for the day.

Two defensive sectors, utilities and telecom stocks, were beneficiaries of the selling, drawing investors away from the more risky group. Utilities gained 1.6%, and telecom was up 0.8%. Gold rose to a new high at $1,791.20 an ounce. Volume fell to just 972 million shares traded on the NYSE. And advancers led decliners on the Big Board by 1.5-to-1, but on the tech-heavy Nasdaq, decliners were ahead.

Yesterday was a real disappointment for the bulls. Their inability to penetrate into the 1,225 to 1,260 area with a decent reactive rally following last week’s wild ride shows an unusual level of timidity on the part of bargain hunters. A decline from the current level could find initial support at 1,180, while an advance will find resistance at 1,225. For the Nasdaq the major resistance is at its breakdown point of 2,600. Support for the Nasdaq is at Friday’s low of 2,481.

Even though the bears are in charge with all trends down, the bulls’ hopes rest on the following for a turnaround: Last week’s volatile drive down and equally volatile days up could be signs of a selling climax. Some are saying that once the summer is over and the major players take the field, the trend will change. And they place confidence in the upcoming meeting of the Fed at Jackson Hole,Wyo., to produce some sort of new stimulus like last year’s QE2, which resulted from that meeting.

But the facts show a stock market that has made a clear breakdown, establishing a long-term trend, which is down. Yes, the market can seemingly “turn on a dime,” and at some point will turn. And I would love to be among the first to jump aboard a new bull market. But the fact is that the long-term trends have been broken.

Above is a chart of the S&P 500 with a 17-month moving average (red line). Note the consistency of the signals on this chart and the recent sell signal at 1,216.

Markets do change, and perhaps the fall will bring a new beginning, but currently the trend is bearish and stockholders should not grab for straws that they hope will bail them out of a bear market.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

• See Serge Berger’s Daily Market Outlook: How to Trade the Late August Lull
• See Sam Collins’ Trade of the Day: A Rising Energy Play With a Steady Dividend
• See Serge Berger’s Trade of the Day: Get Ready to Short Tech ETF XLK