"Everyone is watching 1040 on the S&P," says Barry Ritholtz, CEO of Fusion IQ. "If those lows hold we'll see a bounce back. But by and large this market is looking much less healthy than it was just three or four months ago."
While that may seem obvious, it should be noted that Ritholtz turned bullish in March 2009 and didn't turn bearish again until May 2010 when he went to all cash just ahead of the "flash crash," as detailed here.
As of midday Tuesday, Ritholtz's firm was 75% in cash and long a handful of names, including BJ Services, Navistar and the ProShares UltraShort QQQ, a bearish hedge. "We're certainly voting with our feet and carrying a lot of cash," he says. "Cash is better than losing money."
Given the S&P 500 is down about 15% after rallying nearly 80% from its lows of March 2009, "it's a little early to say the bull market is over," Ritholtz says. "Gun to my head, I would say this is a regular correction...but it's better to step back and not be involved when things are unclear than just throw a dart and lose money."
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