Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEUTRAL (Day Count = 4)
The SPX index gained just 8bps on Friday, closing at 5667. However, in the process, the index did hit a low of 5603, marking the second test of 5600 in the past four sessions. As the index continues to work off the Mar 13 low of 5504, the support/resistance range of 5600/5700 has emerged as a focus. Momentum and trend indicators continue to improve as Spot VIX and VIX Term Structure both slide back to “risk on” and neutral, respectively. The ICAP Momentum/Trend (MOTR) Model signal has shifted to Neutral. The index seems poised to test resistance at 5700 again in the near term. I have this level marked as the base of the topping formation from back in Sep/Nov of 2024 and should act as decent intermediate term resistance. A break above this level should lead to a test of 5750 (38.2% retracement for the entire peak-to-trough move (ref 6147 to 5504)). Bottom line, the daily count, as expected, is leading to a decent relief rally but the longer-term damage to the index remains. That said, I continue to be a patient seller into any strength and expect the index to test my downside target of 5000 over the coming months.
Trade Support:
5500: ~10% Move Peak-to-Trough
5000: ~20% Move Peak-to-Trough
Trade Resistance:
5700: Previous Support Sep/Nov
5750: 38.2% Retracement Peak-to-Trough
6000: Previous Support
6100: Previous Resistance
6147: All-Time High
