Payrolls came in at a strong +273,000 and the markets decided that Coronavirus is going to render that meaningless. It’s all emotion now and it is going in the opposite direction to what we observed for month after over-bullish month after SPX crossed through the Bull Turnstile (ref. 2nd chart below) in Q4 2019.
The Fed is in ‘good cop, good cop’ mode now with designated bad cop James Bullard walking back his recent comments about how investors should not necessarily expect another rate cut at the March 18 FOMC meeting. Funny how he pops out pretending that the Fed is still authoritative when the market is bouncing and backtracks with one bad day and red futures.
It looks like SPX will fail the 200 day moving average today if the pre-market indication holds up to close the week (a big if, but it’s not looking good for the bulls). That is our ‘3000 area’ support, which is only the initial support area.
As you can see, the weekly chart says an open of 2938 is still at a support zone. But the prospect of a lower low is also in play. Today’s gap down open (barring a miracle rally in pre-market) needs to be near the low of the day or the market will be in more trouble.
SPX monthly continues to advise the next two potential destinations should current support fail.