Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 7)
The SPX index ended the session yesterday down a modest 23bps, closing at 5062. Despite how benign that seems, the index had a wild high/low range of 5246/4835 representing an over 8% spread. Absolutely manic price action as the index hit a new peak-to-trough low of 21.35% for the entire drawdown thus far. Momentum and trend degraded further as spot VIX hit a high of 60.13, just shy of the Aug 5, 2024, peak of 65.73. The ICAP Momentum/Trend (MOTR) Model signal remains Negative. The early session drop to 4835 broke the previously identified support level and downside target of 5000 and essentially tested the next support level at 4800. The 5062 close was 4.70% above the session low creating a potential setup for additional upside over the coming days. I would mark the potential upside for any counter trend rally at the 5200/5400 range. I would be a seller of any such rally, not a buyer. I continue to believe this bear market is evolving, not ending, with additional downside to come.
Trade Support:
5700: Previous Support Sep/Nov (BROKEN)
5500: ~10% Move Peak-to-Trough (BROKEN)
5000: ~20% Move Peak-to-Trough (BROKEN/RETAKEN)
4800: Dec 2021/Jan 2022 High (TESTED)
4200: ~50% Retracement Mar 2020 Low to Feb 2025 High
3700: ~Nov 2022 Low and 61.8% Retracement Mar 2020 Low to Feb 2025 High
Trade Resistance:
5750: 38.2% Retracement Peak-to-Trough
5823: 50dma
6000: Previous Support
6100: Previous Resistance
6147: All-Time High
