Tuesday, October 8th, 2024

Market Summary:

Current ICAP Momentum/Trend Model (MOTR) Signal:  NEGATIVE (Day Count = 4)

Price action during yesterday’s session for the SPX Index was expected and uniform.  The Index was down 96bps on the day, closing at 5695.  The 5733 support level which I have remained focused did not hold.  The Index then faded the entire Sep 19 high/low range (highlighted on chart) to test previously identified support at 5686 with a low of 5686.85 (almost perfect).  Spot VIX spiked almost 20% on the day closing at 22.64.  Additionally, VIX Term Structure remains biased towards “risk off” as the slope (Spot VIX to 1st and 2nd month) is now greater than +10%, moving further from Contango and closer to Backwardation.  The ICAP Momentum/Trend (MOTR) Model Signal remains Negative (day 4) as internals continue to fade and suggest further downside is likely.  As I have stated over the past two weeks, I continue to see risk as skewed to the downside from here.  I would remain focused on the 5686 support level.  A real break at this price level should create a drawdown to 5600 and 5500 in the near term.

Trade Support:

5686:  Sep 19 Low

5615:  Sep 18 Low

5600:  Previous Support/Resistance

Trade Resistance:

5733:  Sep 19 High

5760:  Previous Resistance

5878:  Projection Level

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