April 8 2009 12:40 AM EDT

Newsflow turns negative as S&P sells off

The news was resoundingly negative beginning Monday night. Eurozone's Q4 was revised down to -1.6% from -1.5%. George Soros had little positive news to offer in a Bloomberg interview. Marc Faber was overall bullish, but Mike Mayo reiterated his negative outlook on banks. Alcoa and The Mosaic Company reported on Q1 with revenues significantly lower than expected. After a sharp gap down Tuesday, S&P futures closed below its EMA(200) on the 1, 10, and daily time frames at 811.25. This turned out to be a precursor to an overnight selloff to 803.00 as Asia turned lower. There still appears to be a potential support level at the slow trend line near 790, but at this point the futures would also be below the 100-minute EMA(200). There are two ways to play this -- stay short in anticipation of a bigger move to 750 or buy it for a short term pop from the trend line. Two S&P 500 companies report Wednesday: Family Dollar before the open and Constellation Brands after the close. Superficially, Family Dollar is likely to do well given the consumer staples trend, and Constellation Brands could feel a seasonal first quarter squeeze in revenues.