Market Summary:
Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 2)
The SPX index started the session yesterday down 1.65%, hitting a low of 5488, then rallying to close up 55bps at 5627. As I wrote on Mar 27 (ref close was 5693), “The 5700 level needs to hold, or I would expect a relatively aggressive slide back to 5500.” We did in fact see that aggressive move back to 5500 yesterday as the index held there (at ~5500) for the second time since the Mar 13 low (ref 5504). This low did slightly undercut with momentum and trend indicators degrading further. Spot VIX has now spiked over 40% in the past four sessions but remains “risk on” as VIX term Structure is approaching “risk off”. The ICAP Momentum/Trend (MOTR) Model signal remains Negative. I continue to expect volatile price action. That said, I believe risk overall remains skewed to the downside with a break below 5500 coming over the next week or so.
Trade Support:
5700: Previous Support Sep/Nov (BROKEN)
5500: ~10% Move Peak-to-Trough (TESTED)
5000: ~20% Move Peak-to-Trough
Trade Resistance:
5750: 38.2% Retracement Peak-to-Trough
5893: 50dma
6000: Previous Support
6100: Previous Resistance
6147: All-Time High
