Current ICAP Momentum/Trend Model (MOTR) Signal: NEUTRAL (Day Count = 1)
The SPX index sold off over 6% during yesterday’s session, hitting a low of 5115. The index then took back approximately half of that loss, closing only 3.46% lower at 5268. Price action remains as expected; volatile, manic and emotional. I would remain focused on resistance at 5500 for the near term as that was support on Mar 13/Mar 31and was the breaking point for the index coming out of the initial gap down on Apr 3. Momentum and trend indicators remain depressed but have improved slightly over the past two sessions. Spot VIX remains choppy but is settling down overall. VIX term structure remains “risk off” but is settling down as well. The ICAP Momentum/Trend (MOTR) Model signal has shifted to Neutral on the daily count (this is the signal I always report on). I would note that the intermediate and long-term counts remain damaged and Negative. That said, I see this set up as whippy with some potential for an additional push higher in the near term. Longer term I continue to see risk as heavily skewed to the downside. As I wrote on Apr 9, “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.”
Trade Support:
5000: ~20% Move Peak-to-Trough
4800: Dec 2021/Jan 2022 High
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:
5500: ~10% Move Peak-to-Trough
5700: Previous Support Sep/Nov
5750: 38.2% Retracement Peak-to-Trough
5775: 50dma
6000: Previous Support
