SPX: Bears in Comfortable Control Until a Close Above 3225

A few weeks ago I accurately noted that due to the lower low (late January) and the NYSE Arms index showing increasing negative sentiment, and, contingent with algo bots selling the highs, that a short was inevitable. Well, we got it.

It appears while even if at best case scenario that the virus is not all that "deadly", at the very least, it will significantly impact companies' earnings and supply chains. As a result, this 6 month blow-off top may come home to roost but only time will tell. Could a black swan be looming?

People trying to hope where the 'bottom' is are purely guessing to try to get the best possible entry point. In reality, there must be a close above 3225 on the SPX for any confirmation (i.e. not a dead cat bounce) for a reversal.

In reality, smart money will stay on the side-lines for equities until the virus is contained. Why? Company CEOs have already came out and repeatedly said their supply chains and earnings will be severely impacted. If this spreads in the US (remains to be seen) the SPX could fall well below 3000.

Play it safe and don't gamble. Look for 3225 as any indication of a revesal.

- zSplit