Market Summary:
Current Momentum/Trend Model (MOTR) Signal: POSITIVE (Day Count = 1)
The SPX Index gained 54bps during Friday’s session, breaking back above the 5600 level and closing at 5626. The break back above identified resistance at 5600 and 5622 comes as my Momentum/Trend (MOTR) Model shifts from a Neutral Signal to Positive. The next hurdle for the Index will be breaking out above the 5645 level. This price level acted as significant short-term resistance in late Aug/early Sep and led to the recent 4% peak-to-trough selloff from Aug 30 to Sep 6. While the current set up is not ideal, MOTR is Positive and Spot VIX is back below 18 with Term Structure supportive of a continued “risk on” move in equities. With that, I have the ICAP Portfolio net long with dry powder available for a breakout above all-time highs at 5669 and ready for a potential failure at the 5645 level. Bottom line, risk is skewed to the upside here, but I’ve seen better setups, so I am long but not all in.
Trade Support:
5600: Previous Support/Resistance
5562: Jul 8 low
5535: 10dma
5510: 50dma
5500: Jun 20 high and Jul 19 low; Base of Aug 15 Gap Up
5400: Previous Support
Trade Resistance:
5645: Previous Resistance; Sep 11 High (ref 5642)
5669: Jul 16 High
