We were reminded last night, while watching the Denver Broncos throttle the Carolina Panthers in Super Bowl 50, of an old adage from the great Bill Parcells: offense sells tickets, defense wins championships. It’s true in sports. It’s true in the capital markets, too.

Equities traders will be playing defense this morning, as they did on Friday. S&P 500 futures are down 22 points, and Dow futures are down 180; they were down more than 200 points earlier. If those losses translate to the cash market – they don’t always – then traders will see the S&P trade retest its January low of 1859.

For traders who watch the charts, that shouldn’t come as much of a surprise, after Friday’s rout. “Last Friday’s decline looks to have changed the structure for the worse in the short run, and makes a test of mid-January lows look increasingly likely,” said Mark Newton, a partner at Greywolf Execution Partners.

Back on Jan. 20, the S&P 500 traded as low as 1812 during the session, before closing at 1859. That intraday was the proverbial bell-ringing moment, and the bargain shoppers rushed in. Now, that counter-move by the bulls looks pretty exhausted.

While January’s nadir, Mr. Newton said, appeared to be the result of “oversold” conditions, the landscape is stacked against equities now. WTI crude is down more than 3% at $29.88. The yield on the U.S. Treasury note has fallen to 1.80% – hitting yet another 52-week low. The dollar is up against both the euro and yen, after the weekend news that China is dipping deeply into its forex reserves to defend the yuan.

The pain began in Europe. where equities are down across the board. The STOXX Europe is down 2.5%, after starting the session higher. The U.K. 10-year bond’s yield has fallen to 1.47%; the German 10-year bund is down to 0.25%.

While there are a number of pros and cons to the market, which Mr. Newton runs down, the one con he mentions that jumped out at us is this one: “Structurally, the bear trend from last Novembers highs remains intact.” Momentum is still pointing downward, and the late January rally didn’t change that.

In other words, play defense.

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