Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEUTRAL (Day Count = 1)
The SPX Index acted exactly as expected, fading yesterday -61bps to close at 5949. On Nov 8 I wrote that “On a trading basis I am looking for retracements within this move higher and would look for 5947 and 5864 to act as support.” I also wrote on Nov 12 that “Overall, it feels like a good spot to lighten up on some longs and take a breath” and that “Support at 5976, 5947 and 5864 remain in focus and would be healthy levels for the Index to test and hold.” We have now tested and broken 5976 and 5947 (intraday basis – low 5942). Internals have continued to fade. What’s interesting in the near-term is that volumes yesterday were light and Spot VIX and VIX term Structure did not really flinch. So, either this was a quick ~1.25% trim of the “Trump Nov 5” rally or there is a lot of supply and fear still to hit the tape. My gut is the latter of those two options. The ICAP Momentum/Trend (MOTR) Model shifted to Neutral on the close yesterday. I expect support at 5864 to be tested. A break there would set up for a potential revisit of the 5733 level. Note, that 5733 level has been a focus since Sep 19 following the FOMC 50bp rate cut.
Have a great weekend.
Trade Support:
5976: Nov 9 Open/Low (broken)
5947: Nov 7 Open/Low (broken – intraday)
5864: Nov 6 Open/Low
5733: Sep 19 High
Trade Resistance:
6000: Even Target
6017: Nov 11 High
