Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 4)
The SPX Index hit its head early in the session at the top of the highlighted downtrend channel (ref 5840) and proceeded to churn gradually lower for the balance of the day. The Index closed on the low at 5823, up 27bps for the session. Internals continue to flatline and fade as the index struggles to move higher off the Oct 23 low of 5762. The ICAP Momentum/Trend (MOTR) Model remains Negative. As I wrote yesterday, “risk remains skewed to the downside with my expectation for price volatility increasing as we move through the final days until the election”. I don’t believe we have ever seen an election quite like this one. The ramifications are truly historic. That said, I do believe that we will see one final push out ahead of next Tuesday. My gut is that there will be a final move to derisk, trim and hedge long exposure. I expect 5800 to break and 5733 to be tested before we start filling in ballots on Nov 5.
Trade Support:
5800/5796: Oct 9 High
5733: Sep 19 High
5686: Sep 19 Low
5615: Sep 18 Low
Trade Resistance:
5830: 10dma
5878: Projection Level
5970: Projection Level
6000: Even Target
