Current ACAP Momentum/Trend Model Signal: NEUTRAL (Day Count = 1)
The SPX index lost 30bps during yesterday’s session, closing at 6370. The index hit a new all-time high (ref 6409) very early in the cash session and then struggled for the balance of the day.
Yesterday’s high/low/open/close (6409/6363/6405/6370) created a large, negative stick. This large, negative stick when viewed in combination with the previous day’s bar, forms a significant “bearish engulfing pattern”.
This pattern, while it needs to be confirmed in the coming days, occurred as my momentum and trend indicators struggled to expand. The ACAP Momentum/Trend Model signal shifted back to Neutral. As I wrote in yesterday’s note, “a breakout above 6400 would set up for a run to 6600. I do see this as the higher probability trade currently.”
That said, the index’s current inability to hold above 6400 as internals churn is concerning. This is a true neutral position with upside/downside risk evenly distributed.
Trade Support:
6200: July 7 Low
6147: Previous All-Time High (Feb 19)
6100: Previous Support
6000: Previous Support
Trade Resistance:
6284: All-Time High (Jul 3) (BROKEN)
6390: Fibonacci Projection (Aug ’22 Low to Feb ’24 High) (TESTED)
6400: July 28 All-Time High (TESTED)
