Current ICAP Momentum/Trend Model (MOTR) Signal: NEGATIVE (Day Count = 8)
The SPX index fell 1.57% yesterday, establishing a new closing low for this move at 4982. The index initially rallied over 4% to start the session, hit a high of 5267, and then reversed sharply trading down 6.78% to a low of 4910. Overall, the market continues to show expected, massive volatility as one of the largest intra-day rallies recorded was completely erased. Momentum and trend indicators continue to fade to extreme levels. Spot VIX remains elevated at 52.33 and VIX term structure remains at an extreme “risk off” by my system. The ICAP Momentum/Trend (MOTR) Model signal remains Negative. I continue to believe that the index is unwinding, working through a true bear market. As the headlines and concerns evolve, risk and volatility will remain to the downside and elevated, respectively. Overall, as I have continued to write, I am conscious of aggressive, counter trend rallies and I am a seller, not a chaser. I remain focused on my additional downside targets for the entire move of 4800, 4200 and 3700. I am very confident that all three of these remaining downside targets will be achieved by the end of this process.
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
5802: 50dma
6000: Previous Support
6100: Previous Resistance
6147: All-Time High
