Looking at the Sigma Whole Market Index, we remain stuck in the middle of the trading range. When I biult this index, I didn't imagine it would be so efficient in distribution time. 

Looking at the Sigma Smart Money Index, we can notice this index was able to move above previous high. We consider this is short term positive for the equity market.

The Nasdaq 100 was also able to move above short term resistance (green horizontal line). This looks rather positive on a short term basis (even if a false break is always possible).

Looking at our indicators, the Swing was at '4', telling us the move was impulsive. The Sigma Trend Index is back in positive territory.

There is no change in our positions.

Short Term Trading Book:

- SPX: long at 1830.28 (stop @ 1816, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3477.72(stop @ 3410, 5pts below the ST model to take into account bid/ask spread) 

- CAC: long at 4374.06(stop @ 4343, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 3115.67 (stop @ 3103, 5pts below the ST model to take into account bid/ask spread)

- DAX: stopped

- IBEX: stopped

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position:  

- 2 short NDX @ 3487.38

The Sigma Whole Market Index was able to remain above its key supports: red uptrend channel and blue horizontal line.

More important, the 3 key indexes (Russell 200, Nasdaq 100 and Small Caps 600) enjoyed a nice bounce back near their key supports. We need a strong move/rebound from those indexes in order to break recent trading range in the Sigma Whole Market Index.

There is no change in our indicators. The Sigma Trend Index is close to its zero line while other indicators are neutral at '3'.

There is no change in our trading books.

Short Term Trading Book:

- SPX: long at 1830.28 (stop @ 1816, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3477.72(stop @ 3410, 5pts below the ST model to take into account bid/ask spread) 

- CAC: long at 4374.06(stop @ 4343, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 3115.67 (stop @ 3103, 5pts below the ST model to take into account bid/ask spread)

- DAX: stopped

- IBEX: stopped

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

- 2 short NDX @ 3487.38

Looking at the Sigma Whole Market Index, there is no sign of breakout: we remain stuck in the trading range. We have been in this trading range for the last 51 sessions.

Looking at the relative performance between the S&P1500 and the US 10y T-Notes, we can notice a pullback of the market on previous support (now a support) but we remain above this key level.

Looking at the drivers of the rally (NDX, RUT, SC600), they did a pullback on Tuesday. Those indexes are the key one to monitor: further weakness from those indexes would signal a new downleg for the market.

Looking at our indicators, we can notice the Sigma Trend Index is 'already' at '21'. This is not a good sign for the market because a '34' level means the market is 'ready' for a correction. So, the Sigma Trend Index is picking up while the Sigma Whole Market Index remains roughly flat. This is very strange, I have never seen this situation since I started to test the model.

The ST model uplifted its stops on some positions:

Short Term Trading Book:

- SPX: long at 1830.28 (stop @ 1816, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3477.72(stop @ 3410, 5pts below the ST model to take into account bid/ask spread) 

- CAC: long at 4374.06(stop @ 4343, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 3115.67 (stop @ 3103, 5pts below the ST model to take into account bid/ask spread)

- DAX: stopped

- IBEX: stopped

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

- 1 put SPX, MAY, strike 1400 @ usd2.85

- 2 short NDX @ 3487.38

There is no doubt that the main drivers of 2009's rally have been the Nasdaq, the Russell 2000 and the Small Caps (in USA). When we have a look at those charts, we can notice there have been under pressure for a couple of weeks. This means current market activity is in a distribution phase and we are building a weak momentum top. But a weak momentum top is (usually) a medium term top. In other words, this means we are at risk of a medium term correction.

Looking at the Sigma Whole Market Index, we can clearly notice the distribution phase (horizontal trading range). Why is it so clear on this index? Because by construction, it is an aggregate of 16 US indexes. So, as long as we remain in the uptrend (red) channel, there is little risk for a correction but if/when we break this uptrend, we will get a major warning signal.

There is no meaningful change in our indicators at this time.

The ST model uplifted its stop on the CAC:

Short Term Trading Book:

- SPX: long at 1830.28 (stop @ 1810, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3477.72(stop @ 3405, 5pts below the ST model to take into account bid/ask spread) 

- CAC: long at 4374.06(stop @ 4341, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 3115.67 (stop @ 3103, 5pts below the ST model to take into account bid/ask spread)

- DAX: stopped

- IBEX: stopped

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

- 1 put SPX, MAY, strike 1400 @ usd2.85

- 2 short NDX @ 3487.38

The market printed a big black candle on Tuesday. It seems recent resistances (pink and blue) are too strong for current momentum; the fight between bulls and bears isn't over yet. Wait and see.

Looking at our indicators, the Sigma Trend Index slid in negative territory. The Swing was at '2', telling us the decline was impulsive.

There is no change in our trading book at this stage:

Short Term Trading Book:

- SPX: long at 1830.28 (stop @ 1810, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3477.72(stop @ 3405, 5pts below the ST model to take into account bid/ask spread) 

- CAC: long at 4374.06(stop @ 4340, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 3115.67 (stop @ 3103, 5pts below the ST model to take into account bid/ask spread)

- DAX: stopped

- IBEX: stopped

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

- 1 put SPX, MAY, strike 1400 @ usd2.85

- 2 short NDX @ 3487.38