Current ACAP Momentum/Trend Model Signal: NEGATIVE (Day Count = 1)
The SPX index lost 59bps during yesterday’s session, closing at 6411. My momentum and trend indicators degraded more than expected. My Spot VIX signal is “risk on”. VIX Term Structure is “risk on” as well. The ACAP Momentum/Trend Model signal shifted to Negative. As I mentioned on Aug 18, “the index breakdown and close below the uptrend channel is concerning, but I would keep it in perspective. Near-term risk remains skewed to the upside with 6600 as a realistic target. However, my view would change if the index were to break below 6400 with a confirming ACAP model shift to Negative.” Well, the index has failed to break back into the uptrend channel and the ACAP signal has indeed shifted to Negative. The session low came at 6400.22, right at my previously identified focus line of support. I am focused on the 6400 level. Risk will shift significantly to the downside if this breaks, producing a near term target of 6200.
Trade Support:
6400: Previous All-Time High (July 28)
6200: July 7 Low
6147: Previous All-Time High (Feb 19)
6100: Previous Support
6000: Previous Support
Trade Resistance:
6481: All-Time High (Aug 15)
6600: Mid-Point of Uptrend Channel
