Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 5)
The SPX Index lost 1.59% on the day, closing at 5861. The index, as expected and predicted, has now sold off 4.70% (peak-to-trough) in just six sessions. Previously identified support levels have been undercut as momentum and trend indicators continue to degrade/confirm. Spot VIX and VIX Term Structure signals remain neutral to “risk off”. The ICAP Momentum/Trend (MOTR) Model signal remains Negative. As I wrote back on Jan 14, “I believe the Index is topping. This is a process and aggressive price action in both directions should be expected. Ultimately, any upside is to be sold with risk skewed to the downside. Targets remain 5700 and 5500 for the near term.” All higher downside price targets have now been achieved (see below) including the filling of the 5850/5900 gap (see chart). I continue to be a seller of the SPX index and a buyer of volatility as risk remains skewed to the downside.
Trade Support:
6130: Previous Resistance (BROKEN)
6100: Previous Resistance (BROKEN)
6000: Previous Support (BROKEN)
5850/5900: Jan 14 / Jan 15 Gap (TESTED)
5700: Previous Support Sep/Oct
Trade Resistance:
6250: Measured Move
6400: Measured Move
