Market Summary:
Current Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 4)
The SPX Index consolidated inside Friday’s large down bar gaining 1.16% on the day. The result was a relatively organized “inside day” suggesting a greater move is imminent either through Friday’s high (ref 5522) or low (ref 5402). As risk appears evenly distributed based on this pattern, my Momentum/Trend (MOTR) Model signal remains Negative for the fourth day. This Negative signal suggests that risk remains skewed to the downside. As such I would remain cautious at current levels waiting for internals to improve and/or the Index to break back above and hold the 5500 level. Again, I have left previously identified and broken Trade Support levels highlighted below to keep top of mind how hot this fade has been thus far (since Aug 30).
Trade Support:
5550: 10dma (BROKEN)
5600: Previous support/resistance (BROKEN)
5562: Jul 8 low (BROKEN)
5504: 50dma (BROKEN)
5500: Jun 20 high and Jul 19 low; Base of Aug 15 Gap Up (BROKEN)
5450: 38.2% Retracement for the recent trough-to-peak move (Aug 5 – Aug 30) (BROKEN)
5400: Previous Support
5383: 100dma
5300: Previous Support (Aug 2, Aug 9)
Trade Resistance:
5645: Previous support/resistance
5669: Jul 16 high
