Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 14)
The SPX index gained a hard earned 49bps yesterday, closing at 5599. The session was modestly positive as it simply stopped the bleeding after the recent 10% peak-to-trough slide. That said, momentum and trend indicators remain negative. Spot VIX closed down 18% from its recent peak, contributing to a buy signal from my Spot VIX signal model. VIX Term Structure remains “risk off” but is much closer to neutral. The ICAP Momentum/Trend (MOTR) Model signal remains Negative. As I wrote yesterday, “We are working through a topping process as market internals continue to degrade on the daily, weekly and monthly counts. I expect violent rallies to be a part of this process, but they are to be sold not chased. The recent breakdown is the beginning (recognition) phase of what I believe will become a technical bear market with downside potential to 5000 at a minimum.” My view has not changed.
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 (TESTED)
5000: ~20% Move Peak-to-Trough
Trade Resistance:
6250: Measured Move
6400: Measured Move
