Market Summary:
The SPX gapped down on the open yesterday and never looked back. The session high for Jul 17 was 5622 and the session low for Jul 16 was 5639. This generated a 17-point gap as the index slid 1.39% on the day closing below the 10dma (ref 5597) for the first time in 12 sessions. Although the index has continued to mark new all-time highs over the past two weeks, I have maintained a cautious stance as my internal model had shifted down from Positive to Neutral (negative divergence). I have been very consistent in the fact that my MOTR model has shown weakening/divergence between price and momentum/trend. The A, B, C cluster of resistance which developed from Jul11 to Jul16 has held and I remain cautious under the current model set up. I would note that my model signal did weaken but remains Neutral. Any further weakness will generate an outright shift to Negative. I would also note that the model when run on the S&P 500 E-mini futures has shifted to outright Negative. This is often a leading indicator for the SPX index itself. I remain confident that price weakness will expand and am focused on the support levels below as downside targets.
Trade Support:
5597: 10dma
5562: Jul 8 low
5500: June 20 High
5400: Low/Base of the June 12 Gap
5300: Previous Resistance/Support
Trade Resistance:
5562: July 17 high (gap)
5642: Jul 11 high (A)
5655: Jul 12 high (B)
5666: Jul 15 high (C)
