The Sigma Trend Index is currently testing its zero line. It will be highly important to monitor what happens in coming sessions.

There is no change in our positions. Our stops are unchanged:

Short Term Trading Book:

- SPX: 1 long at 1654.12 (stop @ 1613, 3pts below the ST model to take into account bid/ask spread)

- NDX: 1 long at 2868.65 (stop @ 3002, 5pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- SPX: 2 shorts at 1682.84 (stop @ 1724, 3pts above the MT model to take into account bid/ask spread)

There is no new information coming from our ST model. After a gap up at market open, the market reversed most of its gains and closed with little changes.

The Sigma Trend Index bounced back from '-16 to '-8' but remains in negative territory. We don't consider this bounce back is impulsive because both the Power Level(PL) and the Swing are neutral at '3'.

So, there is no change in our position and at our stop levels:

Short Term Trading Book:

- SPX: 1 long at 1654.12 (stop @ 1613, 3pts below the ST model to take into account bid/ask spread)

- NDX: 1 long at 2868.65 (stop @ 3002, 5pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- SPX: 2 shorts at 1682.84 (stop @ 1724, 3pts above the MT model to take into account bid/ask spread)

The Sigma Whole Market Index remains below its 50d MA (red line). In the past, we got a sell off in such situations (pink boxes):

There is no new information coming from our model at this stage:

Short Term Trading Book:

- SPX: 1 long at 1654.12 (stop @ 1613, 3pts below the ST model to take into account bid/ask spread)

- NDX: 1 long at 2868.65 (stop @ 3002, 5pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- SPX: 2 shorts at 1682.84 (stop @ 1724, 3pts above the MT model to take into account bid/ask spread)

Yesterday we wrote:

"The Sigma Trend Index is close to its zero line. If it is unable to move in positive territory in coming sessions, we must be prepared for a new downleg."

Our fears were fully justified: the STI wasn't able to move in positive territory (red line) and we got a sell off: 

Looking at European indexes, we can see a clear 'abc' pattern (in recent sessions). So, in order to keep a corrective pattern in place (abc), we need a rebound now. If we get further decline, the situation could turn very nasty.

As we wrote during the week-end, the CAC can be considered (for the time being) as a market leader. As it refused to move above its strong resistance (green line) at 4072, we got an acceleration to the downside. We need a rebound now or the situation could further deteriorate.

The DAX is close to break a (short term) trend channel, this is not good... (red circle on chart)

We are very close to our stops. So, if we don't get a rebound (very) soon, we will hit our stops and close our short term long positions.

Short Term Trading Book:

- SPX: 1 long at 1654.12 (stop @ 1613, 3pts below the ST model to take into account bid/ask spread)

- NDX: 1 long at 2868.65 (stop @ 3002, 5pts below the ST model to take into account bid/ask spread)

- CAC: 1 long at 3657.24 (stop @ 3946, 5pts below the ST model to take into account bid/ask spread)

- DAX: 1 long at 7817.14 (stop @ 8130, 10pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- SPX: 2 shorts at 1682.84 (stop @ 1724, 3pts above the MT model to take into account bid/ask spread)

The Sigma Whole Market Index (aggregate of 16 US indexes) was able to close the week above its 50d MA. So, we consider the risk of further (short term) decline is reduced by this move.

The Sigma Whole Market Index is 0.5% below a strong horizontal resistance (pink line). It will be important to see if the market is able to move above this level in coming sessions.

The CAC printed a strong candle on Friday and it is now right below a strong resistance (at 4072). As the CAC has been the clear market leader in recent weeks, it will be highly interesting to monitor if it is able to move above this level early next week.

If the CAC reverse from current level, we are ar risk of a sharp decline.

The DAX remains within its short term uptrend. The green horizontal line is a strong resistance.

The Sigma Trend Index(STI) remains close to its zero line (at '-3'). It will be important to see if it is able to move back in positive territory. If the STI declines from current levels, it will mean that this week's rebound was just a bounce back within a (new) downtrend.

The ST model uplifted most stops:

Short Term Trading Book:

- SPX: 1 long at 1654.12 (stop @ 1611, 3pts below the ST model to take into account bid/ask spread)

- NDX: 1 long at 2868.65 (stop @ 2995, 5pts below the ST model to take into account bid/ask spread)

- CAC: 1 long at 3657.24 (stop @ 3946, 5pts below the ST model to take into account bid/ask spread)

- DAX: 1 long at 7817.14 (stop @ 8130, 10pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- SPX: 2 shorts at 1682.84 (stop @ 1724, 3pts above the MT model to take into account bid/ask spread)