Market Summary:
Current Momentum/Trend Model (MOTR) Signal: NEUTRAL (Day Count = 1)
The SPX Index closed up 40bps yesterday at 5745. Price action was bullish as the Index broke and closed above the previously identified resistance level of 5733. Unfortunately, internals did not confirm this move as the ICAP Momentum/Trend (MOTR) Model shifted from Positive to Neutral. With that, the Positive Signal had a max return of +94bps and a strict model return of +56bps (closing basis). As I have written over the past week or so, this setup feels off to me. While I manage the ICAP Portfolio in a rule-based fashion with MOTR as the anchor, I do take discretion as far as sizing and entry/exits. With that, the negative divergence I see currently between price and MOTR is concerning, and I am now essentially flat with some core holdings remaining. I will continue to track market internals and remain focused on support at 5733 (previous resistance) and 5686 holding. Bottom line, there are a ton of cross currents and catalysts as the Index continues to hit all-time highs. I do expect price and internals to confirm a directional move over the coming days but for now risk is balanced/neutral. I would position and size accordingly.
Have a great weekend.
Trade Support:
5733: Sep 19 High
5686: Sep 19 Low
5684: 10dma
5615: Sep 18 Low
5600: Previous Support/Resistance
Trade Resistance:
5878: Projection Level
