Friday, January 17th, 2025

Market Summary:

Current ICAP Momentum/Trend Model (MOTR) Signal: NEUTRAL (Day Count = 2)

The SPX Index opened yesterday’s session at 5963, hit a high of 5964, and faded to close down 21bps at 5937.  The stick was somewhat constructive as a little consolidation/pause is healthy after the three-day, trough-to-peak rally of over 3% we have had.  While we did close below the highlighted 5950 resistance level, it is important to note are that market internals continue to hold/improve.  Spot VIX and VIX Term Structure remain neutral to “risk on”.  The ICAP Momentum/Trend (MOTR) Model remains in Neutral.  In the near term I remain open to prices rising even further.  In the Jan 14 note I wrote that “I believe the Index is topping.  This is a process and aggressive price action in both directions should be expected.”  The Nov 5/ Nov 6 gap I had been focused on was filled with the Jan 13 low of 5773.  That stick created trade support at ~5770 (highlighted).  As far as the intermediate/long term I see risk as skewed to the downside.  There has been significant structural damage done to the Index over the past two months while momentum and trend counts have faded beyond what I consider consolidation within a strong up trend.  For that reason, I hold a neutral stance short term while remaining a net seller of any rally we may see with ultimate downside targets for the SPX Index of 5100 and 4800.  This view may change as data builds, but as of today this is what I see.

Note: I suggested Gold (GCG5) was a strong strategic Buy on Dec 24.  These active contracts were trading at 2629 when I issued that note.  Those contracts hit a high on Friday of 2757 for over a 5% return as the commodity breaks out of a three-month wedge to the upside.

Trade Support:

5770: Bottom of Nov 5 / Nov 6 Gap; Jan 13 Low

5700: Oct 31/ Nov 4 Lows

5100: Intermediate Term Downside Target

4800: Intermediate Term Downside Target

Trade Resistance:

5950: Nov 7 Low

6000: Previous Support

6100: Dec 6 High

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