Market Summary:
Current Momentum/Trend Model (MOTR) Signal: POSITIVE (Day Count = 3)
The SPX Index has now rallied almost 5% from the Sep 11 low (ref 5406) to yesterday’s high (ref 5670). Yesterday’s high was also a new all-time high by about one point (razor thin). As the Index hit the previously identified 5669 resistance level it almost immediately reversed, falling 1% to an intra-day low of 5614. The balance of the session worked the lower half of the intra-day range as the Index closed essentially flat at 5634. This volatility was all expected as we headed into today when a group of dissociated people with a mediocre track record make a decision on something that ultimately makes no difference. However, we just can’t stop talking about it (shiny ball much?). All that said, the Index is at a major inflection point. Resistance at 5669 has held (A, B) as the Index enters its third day of the current Positive Signal within my Momentum/Trend (MOTR) Model. Spot VIX remains subdued and below 18 as Term Structure leans to a more neutral/risk on posture. There will no doubt be a lot of noise and volatility during today’s session, but I will remain focused on the MOTR Signal and whether or not the Index can break and hold above the 5669 level on both an intra-day and closing basis. As I wrote over the past few days, based on my MOTR Model I am long but my gut is skeptical. With that I have paired down most of the exposure in the ICAP Portfolio for the next day or two.
Trade Support:
5600: Previous Support/Resistance
5562: Jul 8 low
5544: 10dma
5513: 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/Sep 17 High
