Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: POSITIVE (Day Count = 4)
The SPX index fell 33bps on the day yesterday closing at 5693. This was the second “doji” formation in the past three sessions with a high/low spread of 38 points and an open/close spread of just two. More indecisive price action and, more importantly, the index closed below the 5700 level (base of the four month topping pattern). As I wrote yesterday morning, “the 5700 level needs to hold, or I would expect a relatively aggressive slide back to 5500.” Momentum and trend indicators seem to be losing steam as Spot VIX remains “risk on”. The ICAP Momentum/Trend (MOTR) Model signal remains Positive. However, if the index doesn’t recover 5700 tomorrow, I would expect the MOTR signal to shift to Neutral. As I have continued to write, I do not like the long trade here. I continue to believe that the greater risk overall remains skewed to the downside.
Trade Support:
5700: Previous Support Sep/Nov (BROKEN)
5500: ~10% Move Peak-to-Trough
5000: ~20% Move Peak-to-Trough
Trade Resistance:
5750: 38.2% Retracement Peak-to-Trough
5910: 50dma
6000: Previous Support
6100: Previous Resistance
6147: All-Time High
