So far so good, the Sigma Whole MArket Index remains above its horizontal support.

Nevertheless, both the Russell 2000 and the Small Cap 600 declined below their horizontal support. As both index have been leading the market in recent decline, this is a very bad signal for the equity market.

The Sigma Trend Index remains well in negative territory. Both the Swing and the Power Level are neutral.

Short Term Trading Book:
 

The Sigma Whole MArket Index sharply declined on Thursday. We are now right on a major support and it is important to keep this level.

The Russell2000, the Small Cap600 and the Nasdaq100 are also on key supports. If the market can't hold those levels, we can expect an acceleration to the downside.

The Sigma Trend Index sharply declined on Thursday and we are at lower levels than the ones reached on Tuesday.

The ST model was stopped on both the DAX and the IBEX:

- DAX, stopped at 9574.05 => 9574.55 - 9184.25 =390.3

- IBEX, stopped but no gain because we had no position on this index

We forgot to post this update on Wednesday but the ST model sharply uplifted its stop on the NDX:

Short Term Trading Book:
 

The Sigma Whole Market Index was under pressure on Tuesday.We are not far from the pink horizontal support. If we move below this level, the double top will be confirmed

Looking at the Russell 2000, this index remains under heavy pressure. There is a couple of weeks we have been focusing on this situation and we consider recent action is worrying.

The Sigma Trend Index is in oversold territory (at '-74'). Both the Swing and the Power Level tell us the decline was impulsive.

The Sigma Trend Index is in oversold territory for the fifth time in 12 months. Nevertheless, currunt levels are not as extreme as the one we got in both August and January.

There is no change in our positions at this stage but we are not far from our stop levels.

Short Term Trading Book:
 

The Sigma Whole Market Index enjoyed a strong session but even if some key indexes (DJI, SPX, ...) printed new all-time highs, the Sigma Whole Market Index didn't do it. This means we have an important divergence between some major indexes: we have been underlining this warning for a couple of weeks when we talk about the Russell, Small Cap and Mid Cap weakness.

Looking at our indicators, the Sigma Trend Index jumped to '29', very close to the key '34' level required for a 'sell' signal. (have a look at our methodology for details on buy/sell signals).

The Swing was at '4', telling us the move was rather impulsive.

The ST model computed a new stop level for the SPX:

Short Term Trading Book:
 

The Sigma Whole Market Index continues to slide. It is now well below the red horizontal support. It will be important to stay in the uptrend channel (close to pink support).

If the situation continues to deteriorate from here, there is a meaningful risk we have just printed a major top. Why? The market broke its uptrend in May (not), then it was able to rally and to print a marginal new high (could be a failed top). Moreover, this top was a weak momentum top because it was not confirmed by the Russell 2000, The Mid Cap 400 and the Samll Cap 600.

Looking at the Russell 2000, the Nasdaq100 and the Mid Cap, we can notice those markets were under heavy pressure on Monday. Some are talking about an Alibaba effect (building cash in order to subscribe to the IPO). This is possible but there is no certainty this is the right explanation.

In Europe, the situation looks in a better shape: key indexes are still above horizontal supports. But it is important to bounce back from here or those markets will be under pressure.

The Sigma Trend Index sharply declined to '-24'. The Power Level (PL) was at '2', telling us the decline was rather impulsive.

There is no change in our position at this stage:

Short Term Trading Book: