I think this type price action was pretty much expected. It was overbought based on the Daily charts and needs to test previous resistance which (if long) we hope holds.
Certainly not over bought on the more valid Weekly charts.
Jackson Hole provides the "event" to cause the panicky retracement as everyone's nervous. Most are not expecting any real QE3 anyway so I would expect other than "for show," much of the negative effect is already priced in.
Now we have to see how far down it goes and with how much conviction~
WIll it begin to slowly grind down on heavy volume, or will we see a fast spike down simply to ruin the long weekend and scare our shares into the smarty pants hands.