Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: POSITIVE (Day Count = 1)
The SPX index gained 1.76% on the day, closing at 5767. This marks a 4.46% rally from the Mar 13 close (ref 5521). The index has now cleared resistance at 5700 and 5750. Additional near-term resistance levels are 5800 and the 50dma (ref 5914). Momentum and trend indicators are improving as the index continues this short-term counter trend rally. Spot VIX closed at 17.48, ~40% below the Mar 11 peak of 29.57. The ICAP Momentum/Trend (MOTR) Model signal has shifted to Positive. While I remain convinced that risk over the intermediate term is skewed to the downside, the Positive MOTR signal suggests that for the near term there is more upside potential. At the moment I do not like the long set up despite the MOTR signal. Therefore, I will not be getting long, nor will I be adding to any shorts until we see a shift back to Negative. To note, the MOTR Model is a rule-based model, not a black box. This allows me to make judgement calls and step away when I feel it is warranted while never trading against the MOTR signal outright. Now is one of those instances.
Trade Support:
5500: ~10% Move Peak-to-Trough
5000: ~20% Move Peak-to-Trough
Trade Resistance:
5700: Previous Support Sep/Nov (BROKEN)
5750: 38.2% Retracement Peak-to-Trough (BROKEN)
6000: Previous Support
6100: Previous Resistance
6147: All-Time High
