Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEUTRAL (Day Count = 1)
The SPX Index continued to bounce during yesterday’s session with a +73bp day and a high/close of 5978/5974. This high/close came at previously identified support/resistance at 5976 (see chart). I continue to believe that the week of Dec 16 did significant technical damage to the Index with a peak-to-trough move of over 4%. Price, momentum and trend all broke/confirmed. That said, I have continued to write that “although risk remains skewed to the downside there could be a year-end rally as high as 6000.” Overall, I am currently convinced that we are seeing the beginning of a larger move to the downside which will accelerate in Q1. The ICAP Momentum/Trend (MOTR) Model signal has shifted to Neutral after a fantastic Negative call. Risk remains skewed to the downside with some short-term room to the upside for the SPX Index to run.
Note: Watch the active Gold contract for Feb (GCG5) (ref 2629). The 2600 level seems to be solid support, and the commodity is working to recapture momentum to the upside. I see the long trade here as well balanced with upside of 200-300 points with the downside limited to ~30 (using a ~2600 stop).
Merry Christmas & Happy Hanukkah!!!!!
Trade Support:
6000: Even Target (BROKEN)
5864: Nov 6 Open/Low
5100: Intermediate Term Downside Target
4800: Intermediate Term Downside Target
Trade Resistance:
6100: Dec 6 High
