By Michael Ashbaugh, MarketWatch
CINCINNATI (MarketWatch) -- About any way you cut it, September was challenging.
Amid fears of a financial-system collapse, the U.S. markets plunged to multiyear lows, inflicting serious damage to the charts.
Yet while a lengthy recovery period is likely ahead -- in the best-case scenario -- there are ways to play defense against a difficult tape.
Before detailing specific strategies, the S&P 500's /zigman2/quotes/210599714/realtime SPX +1.46% chart highlights the recent carnage.
To start September, the index violated the March and January lows, plunging to its worst levels in 47 months.
On the subsequent rally attempt, it found resistance at the March low, selling off again sharply.
That's bearish price action, and looking ahead, a break atop the 1,270 mark is needed to get the S&P stabilized.
Shifting to the Dow industrials' /zigman2/quotes/210598065/realtime DJIA +1.40% five-year view highlights another reason for concern.
Its head-and-shoulders top has been well documented, and was initially detailed on June 24.
But this time, the point is slightly different.
Because this is a weekly chart, the trending indicators are the 50-week moving average (in black), and the 200-week moving average (in blue).
Notice the right shoulder of the Dow's head-and-shoulders top stalled almost exactly at the 50-week moving average.
Similarly, the August rally attempt peaked at the 200-week moving average, closely matching the neckline.
So very simply, there's nothing bullish about this five-year view.
The August upturn really needed to clear that neckline, and instead, the U.S. markets confirmed their downtrend with a severe September breakdown.
Given this pattern's longer-term significance, a lengthy recovery period is likely in order. The bear market has truly taken hold.
Defensive Option #1: Healthcare
On a more positive note, there are ways to play defense against the bear.