Market Summary:
Current Momentum/Trend Model (MOTR) Signal: POSITIVE (Day Count = 4)
The SPX Index gained a very modest 25bps on the day, achieving another closing all-time high at 5732. As I wrote in yesterday’s note, I am focusing on the support/resistance range of 5686/5733 (see chart). Note, the Index was unable to break out above resistance and closed within a single point of this previously identified 5733 level. This price action comes as the ICAP Momentum/Trend (MOTR) Model Signal remains Positive for the fourth session. This is an interesting scenario. The Index is consolidating near all-time highs as market internals, although positive, have paused their expansion. The MOTR Signal is indeed Positive, but I need to see that signal strengthen on a breakout here to increase my conviction and long exposure. The next outsized move for the Index will come on a breakout (or breakdown) from this 5686/5733 range. While the Index churns within this range I have the ICAP Portfolio net long (based on MOTR) but paired down. Quite honestly, I have seen better setups and prefer to wait for further confirmation before taking on more exposure. Overall, I see risk here as evenly distributed between the upside and downside.
Trade Support:
5686: Sep 19 Low
5652: 10dma
5615: Sep 18 Low
5600: Previous Support/Resistance
Trade Resistance:
5733: Sep 19 High
5878: Projection Level
