Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 1)
The SPX Index closed the session down just 27bps at 6051. The index hit an early session low of 6003 (down ~1%) but held support at both the 50dma (ref 6004) and the previously identified 6000 level. The manic push out of the index heading into the cash open is yet another example of high price volatility and a lack of conviction at all-time highs. Neither of which are bullish. As I have continued to reiterate, “price is showing signs of topping near all-time highs as momentum and trend indicators continue to degrade. Additionally, Spot VIX and VIX Term Structure signals remain mixed/neutral.” The ICAP Momentum/Trend (MOTR) Model signal shifted to Negative. The length of the previous Neutral signal was impressive as multiple inputs had already shifted, leaving the MOTR signal waiting for one final turn. This was confirmed on the close yesterday. I continue to see risk as skewed to the downside and expect the 6000 level to break in the near term setting up for an initial downside target of 5850/5900 (Jan 14/15 gap).
Trade Support:
6000: Previous Support
5950: Nov 7 Low
5850/5900: Jan 14 / Jan 15 Gap
5770: Bottom of Nov 5 / Nov 6 Gap; Jan 13 Low
5700: Oct 31/ Nov 4 Lows
Trade Resistance:
6100: Dec 6 / Jan 21 Highs
6400: Measure Move
