Market Summary:
Current Momentum/Trend Model (MOTR) Signal: POSITIVE (Day Count = 5)
I continue to focus on the near-term support/resistance range derived from the Sep 19 range of 5686/5733. Although the SPX Index did hit an early session “head fake” high yesterday of 5741 it quickly broke back below 5733, hitting an intra-day low of 5712 and closing at 5722. Price action since the Sep 18 FOMC meeting has been odd. The past five sessions have had a daily move, on average, of just 22bps with essentially all price action within the Sep 19 bar’s high/low range. Simultaneously we have watched momentum and trend flatline. I have no problem with the Index consolidating at all-time highs ahead of a breakout to the upside. That said, I have noticed the massive drop in price volatility, and it seems unexpected. My ICAP Momentum/Trend (MOTR) Model Signal remains Positive even as internals pause their expansion. Overall, as I have said, I am positioned net long here (based on MOTR = Positive) but I have exposure paired down ahead of a breakout above the 5733 level. I would note that the S&P 500 Front Month Futures (ESZ4) are currently trading up 80bps in the overnight session on news of additional China stimulus (I’ll hold my cynical comments to myself). I will be watching to see if the upside move can hold during the cash session.
Trade Support:
5686: Sep 19 Low
5669: 10dma
5615: Sep 18 Low
5600: Previous Support/Resistance
Trade Resistance:
5733: Sep 19 High
5878: Projection Level
