Not to be a bearer of good news (with the risk of being horribly wrong :), the indicators are suggesting the markets will hold the current support levels.
The SP500 is oversold, and just about sitting on support.
The Naz is the same. Not as oversold, but very close to its 62SMA.
IMO, the Naz will bounce off the 62 SMA and lead the markets sideways to up. When I say sideways, I mean to the upper band of the market resistance until earnings come out.
I was reading a Forbes article today, indicating Meredeth Whiteny was forecasting higher short-to-midterm profits for the banks due to mortgage modifications. (read it on Yahoo Finance headlines earlier in the day, but their headlines are not functioning at the moment. And the Forbes website simply sucks at searching current articles, so I could not find it to link it.) This to me suggests banks can lead us higher after this earnings. Potentially allowing for the SP500 to hit the 320SMA or 1000-1050 mark.
Now, could I be wrong, and the markets break down from here so-much-so that the SP500 sees the low 800s or the Naz sees the low 1600s? Obviously. After all this is a probabilities game, and there is always a chance. The only reason I can currently think of that would have that impact would be defaults at the state level... ie Cali. Such defaults would cause a mini credit freeze up, and a spike in the VIX to the mid 30 level. (At which point I would be a heavy buyer of equities.)
Some would point to oil. If oil goes, so goes the market. However, oil is a good position to test its the low 60s, but it can test there with the market maintaining current support levels. The markets are not yet fully testing their support levels yet, and oil already saw the bulk of its declines.