Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 12)
The SPX index closed down 2.70% yesterday at 5614. The intraday low of 5564 marked a peak-to-trough move of 9.49%. That low also came within 64 handles of my next downside target at 5500. This move has been exactly what I expected, and I believe is still in the first stage of the coming bear market. In fact, I wrote on December 23, “The Dec 18 selloff was the beginning of a larger move to the downside which I believe will accelerate in Q1. Any rally higher from current levels should be strategically sold, not chased.” The index is currently taking on significant damage on the daily, weekly and monthly charts. Momentum and trend continue to degrade. Both Spot VIX and VIX term Structure signals are “risk off”. The ICAP Momentum/Trend (MOTR) Model signal remains Negative. As always, I would be ready for snap back rallies understanding that the greater move in the coming months should bring the index to the 5500 and 5000 levels at a minimum.
Trade Support:
6130: Previous Resistance (BROKEN)
6100: Previous Resistance (BROKEN)
6000: Previous Support (BROKEN)
5850/5900: Jan 14 / Jan 15 Gap (BROKEN)
5725: 200dma (BROKEN)
5700: Previous Support Sep/Oct (BROKEN)
5500: ~10% Move Peak-to-Trough
5500: ~20% Move Peak-to-Trough
Trade Resistance:
6250: Measured Move
6400: Measured Move
