Like many charts these days, you have to look at a weekly chart of the Telecommunications Index (IXTCX.X) for any type of support.
Telecommunications Index Weekly Chart
The weekly chart shows that we are quickly approaching a 3-year low. Support, and I use the term loosely these days, should be found at the 290. Dragging the index lower is Winstar Communications (NASD:WCII)
Winstar-Nortel Daily Charts
Winstar shares have fallen to 3/8 from a high of $66.50 on news that the company may run out of money by the end of they year. The share price puts Winstar at risk of being delisted from the Nasdaq in the coming weeks. The performance of Winstar also has a direct affect on Lucent (NYSE:LU), which lent Winstar approximately $600 million. Also being affected are Microsoft (NASD:MSFT) and Credit Suisse, which both have stakes in the company. With the same story rippling through many companies in the telecom sector, it's easy to see what the long-term affects could be on other companies and sectors. Since I really don't want to short Winstar at 50 cents, I need to start looking for other companies that are going to suffer from the telecom woes like suppliers, lenders, and vendors.