Warning flags are flying on Wall Street

The S&P 500 stock index on Thursday again briefly dipped below its average price over the past 200 days, a worrisome sign that suggests trouble for the

9-year-old bull market.

In another sign of weakness following another day of steep losses on Wall Street, a group of transportation stocks tracked by Dow Jones fell 10 percent below its September high, pushing it into “correction” territory.

❚ What does a dip below 200-day

average tell us? It measures the trend of the market and lets you know if the trend is up or down.

“Closing below it ... can aid in (identifying) a change of character for stocks,” says Todd Sohn, director of technical analysis at Strategas Research Partners in New York. What it tells you is that the “trend is turning to the downside,” and “risk appetite” for stocks is decreasing. The S&P 500 dipped below the key level of 2768 Thursday before closing at 2769.

❚ Is it a reason to sell? Not yet, says Ari Wald, a technical analyst at Oppenheimer. While dropping below the 200day moving average represents “a loss of momentum,” what it’s telling us, he says, is that the market is transitioning into a trading range moving forward. Wald says the market already is trading at the “lower end” of that range.

❚ What are falling transport stocks signaling? When shares of railroads, package delivery companies and container ships fall, it may be an “early sign” of economic weakness, Sohn explains. The declines in this economically sensitive sliver of the stock market have Sohn concerned that the “character of the market is changing.”