Sellers Add Pressure To S&P And Equal Weighted S&P In Particular

The problem when you trade off what Trump says, is that you are only in for disappointment. Monday's reversal that delivered what should have been a tradeable bullish engulfing pattern has devolved into a distribution sell off across lead indices.

The Russell 2000 (IWM) gapped down but was at least able to hold onto $245 support. Technicals are net negative, but not fully oversold, so I would be looking for another day of selling that should take it into a test of its 200-day MA.

The S&P broadened its losses, but it still has a few days to go before it reaches an oversold state and can start looking at a reversal. There was no confirmed distribution, but it's hard to see buyers mounting much of a defense without first testing its 200-day MA.

The equal-weighted S&P managed to undercut the Monday spike low, a warning sign for other indices yet to do so. It seems to be on course for a test of its 200-day MA. Technicals are net negative and stochastics just dropped into oversold territory.

The Nasdaq (QQQ) didn't experience the same degree of loss as the S&P. It also managed to successfully defend its 200-day MA. While further losses are likely, there is reason for optimism given the proximity of the 200-day MA and trading range support. Technicals are mixed, with On-Balance-Volume on a 'buy' trigger. It's an aggressive long for those willing to take a punt.

Bitcoin edged higher and has almost shifted technicals into a net bullish picture. The 50-day MA is not far overhead, and while this may act as resistance it may not do so for long. This still looks to be a workable long trade if not long already.

Another index testing lows is the Dow Industrial Average (DIA). It registered a distribution day and looks likely to test its 200-day MA tomorrow. Technicals are oversold.

On the short side, we have the Semiconductor Index (SOX). Yesterday's small inverse doji at the 50-day MA on net bearish technicals is a reversal candlestick that has the makings of more losses to come.

Today felt like the first day markets actually posted a sell off rather than some indecisive trading range action. Those that shorted the resistance test marked by February declining highs will be sitting pretty.