Wednesday, January 22nd, 2025

Market Summary:

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

The SPX Index continued its push higher as it ran 88bps during yesterday’s session, closing at 6049.  This close is 4.78% higher than the Jan 13 low and just 50 handles below the Dec 6 all-time high of 6099.  Market internals have continued to improve.  Momentum and trend indicators remain short term bullish as do both Spot VIX and VIX Term Structure.  The ICAP Momentum/Trend (MOTR) Model signal remains Positive.  While price has rallied beyond what I expected, my overall view has not changed.  As I wrote last week, “In the near term I remain open to prices rising even further.  I believe the Index is topping.  This is a process and aggressive price action in both directions should be expected.”  That said, I also see 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.  The net of this, prices can continue to rally in the near term, but I am cautious in the intermediate and longer term.   

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 today of 2774 for over a 5.5% return as the commodity has broken out of a three-month wedge to the upside.

Trade Support:

6000: Previous Support

5950: Nov 7 Low

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

5700: Oct 31/ Nov 4 Lows

Trade Resistance:

6100: Dec 6 High

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