Current ICAP Momentum/Trend Model (MOTR) Signal: POSITIVE (Day Count = 2)
The SPX index gained 2.03% during yesterday’s session, closing well above 5400 at 5484. My momentum and trend indicators continued to improve as the index is now well within the 5400/5500 range which I referenced on Apr 23. This range should act as firm resistance, and we could see some consolidation here before a real move through 5500. My Spot VIX model is two weeks into a “risk on” signal and VIX term structure is now neutral. The ICAP Momentum/Trend (MOTR) Model signal remains Positive. All said, if internals can hold and the MOTR signal remains Positive, I could see this rally potentially testing 5700. I am watching carefully and am more than willing to wait for better entry points to re-establish my shorts. I continue to be a seller of these rallies, not a chaser as my overall view is still negative. I remain confident that the near-term downside targets of 5000 and 4800 will be achieved. I continue to believe that my intermediate/longer term downside targets of 4200 and 3700 will be achieved before the current cycle ends.
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:
5400: Sep 2024 Lows and Apr 3 Low/Close (BROKEN)
5500: ~10% Move Peak-to-Trough
5646: 50dma
5700: Previous Support Sep/Nov
5750: 38.2% Retracement Peak-to-Trough
6000: Previous Support
