As markets continued to tumble and volatility remained sharply elevated on Thursday, worried investors may be wondering whether the stock market is in, or will soon be in, a correction. Any decline in price of 10% or more from an index's most recent high is generally classified as a correction – and depending on whom you ask, a correction could represent either a natural re-adjustment in price within an overall uptrend or the beginnings of a doomsday scenario.

On Thursday, one of the three main large-cap indexes – the tech-heavy Nasdaq Composite – entered into correction territory, as tech stocks like, Inc. (AMZN), Netflix, Inc. (NFLX) and their FAANG brethren remained under heavy pressure. For now, the S&P 500 and Dow have both been spared membership in the correction club, but that could soon change if small-cap stocks fulfill their traditional role as a leading indicator for the markets – the Russell 2000 index of small-cap stocks also entered into correction on Thursday. (See also: 'Exuberant' Market Faces Second 10% Reversal Since January.)

As shown on the chart below, Nasdaq's continued plunge on Thursday places the index right around the -10% mark from its late-August highs. In the process, the index also extended its breakdown well below both its key 200-day moving average and a rising trendline extending back to mid-2016. Friday will be critical for equity markets – if Nasdaq and key tech stocks are unable to bounce, they could help pull the other major indexes into correction territory with them.

Daily technical chart showing the performance of the Nasdaq Composite Index

Source: TradingView