The third day of distribution in the last four sessions has us hoisting the Red Flag for a Sell Bias. We’ve been prepared to do this for weeks as we’ve been calling for defensiveness with Long positions.

Our technical analysis tells us the 200-day moving averages for the major indexes will be tested next.

Our rational analysis reminds us the market does whatever it wants, when it wants. We may very well see a sharp rally to shake short sellers out, it happens quite a bit after a sell off and biases, like ours, shift.

Never be surprised by the market.