Stocks fell in yet another late-day selloff on Tuesday after unexpectedly poor housing figures sent jittery investors running for the exits.

New data showed home sales fell 2.2 percent month over month, that’s a far cry from expectations of a 5.5 percent gain.

Technical action also dragged down sentiment. The S&P 500 broke below its 200-day moving average, which had been a level of support in the last few days.

How should you be positioned now?

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As far as I’m concerned the technicals are in tact, says Guy Adami. We said the S&P would over-correct to the upside and trade up to 1130 and then turn lower -- and it did. Now we’re likely in the next leg lower. We have to see what happens as the S&P trades down to the lower end of the range – around 1040 – will it hold next time we test it?

The patterns in the S&P suggest that support will not hold this time, adds Oppenheimer's Carter Worth. My persumption is we break lower. I think we go to 980. I don't think a great crash is coming but we are clearly entering a period when the downside should be the focus of investors. (Click here for Carter Worth's full technical analysis)