Market Summary:
Current Momentum/Trend Model (MOTR) Signal: NEUTRAL (Day Count = 5)
The SPX Index acted as expected yesterday as the index was down 75bps at its low and saw a peak-to-trough move of -1.17% hitting an intraday low of 5560 (breaking 5600). If that level sounds familiar it’s because I have had 5562 identified as a support level (Jul 8 low) for the past two weeks (see below). It is also worth noting that in the overnight session S&P 500 futures (which I trade) were down almost an additional 1% from the regular market close. The bottom line is while everyone was saying the “n “word (yes – Nvidia) I remained focused on my model and market internals. I don’t care for headlines. What I do care for is how those headlines and investor behavior are manifested in price and momentum. That said, my Momentum/Trend (MOTR) Model has been Neutral now for 5 days. As such, I mentioned in my previous two notes that I had flattened out my long exposure and was net short in the portfolio as I saw “risk here as balanced with a slight skew to the downside” as “the (MOTR) Signal remains in Neutral and is degrading slowly”. That worked out very well yesterday for the ICAP portfolio. I am essentially flat here after taking advantage of the dip yesterday to cover most of my shorts. The MOTR signal remains Neutral and continues to degrade slowly. The SPX is now jammed between a near term support/resistance range of 5562/5645. I am watching for either level to break with a confirming MOTR signal.
I am off the desk tomorrow but will be back after the Labor Day Holiday. I hope everyone has a safe and enjoyable weekend!
Trade Support:
5600: Previous support/resistance
5596: 10dma
5562: Jul 8 low
5500: Jun 20 high and Jul 19 low
5497: 50dma
Trade Resistance:
5645: Previous support/resistance
5669: Jul 16 high
