ROCKVILLE, MD — On Monday, the market was at an inflection point — a proverbial fork in the road. By Tuesday’s close, it was clear the bearish path was taken. Unlike most of the market’s minor inflection points, though, this one likely will have major and longer-term consequences for the worse.

Nowhere is this more pronounced than with a chart of the Dow Jones Industrial Average. While as of Monday this blue-chip index hadn’t yet fallen to levels all but impossible to recover from, Tuesday’s steep sell-off under the important 12,000 mark might have pushed it over the cliff.

There were several technical factors in play here, and interestingly, they all line up at that 12,000 mark. In no particular order, notice on the chart below:

• The 200-day moving average line (green) — the grandfather of all moving averages — at just a hair under 12,000 might have played a role in kick-starting Monday’s intraday rebound, but it completely broke down Tuesday.
• An intermediate-term support line (orange) that traces all the major lows going back to the March low of 11,155 also was right at 12,000, and also failed to hold the Dow up.
• It might only be psychological, but it still matters as long as the majority of investors believe it does: The 12,000 level is a big, round number, which traders tend to treat as make-or-break milestones. Now that it’s broken, so is the hope that keeps stocks afloat.

The trump card, of course, was a confirmed end to the debt-ceiling debate — though it was clearly a wild card; even the positive impact of a debt deal was overshadowed by a looming downgrade of the nation’s credit-worthiness.

Said more simply: The market’s gut reaction was to see the glass as half-empty — an attitude that could linger, given the situation.

See, things really are different now than they were with the prior pullback. Now, we have the fundamental backdrop of lowered earnings guidance along with the potential for higher interest expenses for the federal government’s borrowing.

We’re also dealing with bigger-picture bearish momentum. Following the May/June pullback, the 50-day average line (purple), the 100-day moving average line (gray) and the 200-day line were rising, with a bullish separation between them.Now, the 50-day line is under the 100-day average, telling us the market’s intermediate-term undertow already had shifted for the worst — even if it didn’t feel like it had. It sure felt like it by Tuesday, though.

In other words, a break under 12,000 can’t be dismissed as just a little volatility. Odds are it was the straw that broke the bull’s back. As due as we were for a correction anyway (a real one, not a wimpy one) the Dow might not find a floor again until the 11,500-11,600 area — at least. That move still would only represent about a 10% correction from recent highs, however, which is on the low end of “normal” corrective moves. A floor of 11,000 actually would be a more believable meltdown landing spot, or roughly a 14% correction. Both those levels also are key Fibonacci retracement areas (which isn’t a form of analysis necessarily worth researching now if you’re not familiar with Fib lines).

Bottom line: There’s still a glimmer of hope around June’s lows of 11,875. The Dow stopped its bleeding there Tuesday, so perhaps it really is a floor. One can’t conclude it is, though, just from a bounce up and off that line today. We’re likely to get a so-called “dead cat” bounce today simply because anything will bounce if dropped from high enough — like the 2% nosedive for equities. Let the dust settle first, and let the market start to trend again, before diving back in. If we do slip under 11,875, though, that’ll be the final nail in the coffin.

James Brumley is a technical analyst and writer for InvestorPlace.com.