But only a small step...

The S&P is lower by -31 points/-1.11%. The Nasdaq is lower by -73 points/-0.98%. A 1% decline in the major indices only happened a handful of times last year. So you should not ignore the move. However, as of now, the move is only a small step to the bearish side from a technical perspective.

Looking at the S&P index, the price has moved below its 50 hour MA. That MA comes in at 2840. That is a step in the bearish direction. Stay below is more bearish. Move above and focus may go back toward the bull side but until then the sellers finally have something to hang a bearish hat on - albeit just a small step.

On the downside, the next step would be a move below the 100 hour MA at 2809.86 (that MA is moving higher). On the last day of 2017, the price dipped below that MA line on end-of-year selling, but it was only for a bar or two. The 200 hour MA (green line) is at 2754.96 (and moving higher). A move to that MA line would represent a 4.07% decline from the high. That is not that much of a correction.

Ironically, the selling today is one day short of the end of month for January. That has traders thinking the selling may be portfolio rebalancing after the sharp run up in stocks in the month.

Looking at the Nasdaq hourly chart, the dynamics are similar.

Like the S&P. the price moved below its 50 hour MA at 7430.98 today, and has traded below that MA for most of the day.

The 100 hour MA comes in at 7335.98, and would be a target on the further weakness to get to and through.

Going back to the end of December, the price of this index, also dipped below the 100 hour MA, only to rebound on the first trading day of the year. Note, however, that the selling volatility has been able to extend below the 200 hour MA in the recent past (green line). The 200 hour MA is currently down at 7171.88. A move to that level would represent a 4.4% decline from the top.

Up ahead is the Trump State of the Union which will trumpet the next stimulus in the form of infrastructure spending. The FOMC will likely announce no change in policy but may warn of a stronger economy. Also on Wednesday Facebook and Microsoft announce earnings. On Thursday Alphabet, Amazon and Apple will announce. Those events each have the potential to reignite the upside, or lead to further downside.

The technicals will be eyed to provide the clues of the "markets" next intentions.