Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 5)
Despite some intraday volatility the SPX Index maintained its balance. While the 11bp gain is unimpressive, the Index did close above the 100dma (ref 5824), the Jan 13 high (ref 5838) and the Dec 20 and Jan 2 lows (ref 5830) (previously highlighted). Momentum and trend across the board were flat to slightly better. Interestingly, Spot VIX has given a “risk on” signal which is worth noting. VIX Term Structure is Neutral. The ICAP Momentum/Trend (MOTR) Model signal remains Negative. I would expect that continued strength, or at least some consolidation here, will shift the MOTR signal to Neutral over the next few sessions. All in, the Index seems poised for some additional upside but overall, I continue to see risk as heavily skewed to the downside. Broad stroke, I see upside capped at 2-4% with downside potential of ~20% from current levels. I believe the Index is topping and that is a process.
Trade Support:
5864: Nov 6 Open/Low (BROKEN)
5830: Dec 20 and Jan 2 Lows (BROKEN AND RECOVERED)
5770: Bottom of Nov 5/ Nov 6 Gap; Jan 13 Low
5700: Oct 31 Low/Bottom of Gap
5100: Intermediate-Term Downside Target
4800: Intermediate-Term Downside Target
Trade Resistance:
5950: Nov 7 Low
6000: Previous Support
6100: Dec 6 High