Looking at the chart of the Sigma Whole Market Index, we can notice a perfect double top. We don't know if it will "survive" in coming days/weeks but if it isn't broken in the next 10 days, the market could be in troubles.

The double top is clear when we zoom on last weeks. Nevertheless, as recent run up was impulsive, we have a preference for a pullback (now) followed by a breakup of the blue horizontal resistance.

There is no change in our indicators;

The ST model uplifted its stop on the CAC:

Short Term Trading Book:

- SPX: long at 1754.73 (stop @ 1753, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3506.23 (stop @ 3429, 5pts below the ST model to take into account bid/ask spread)

- CAC: long at 4107.69(stop @ 4130, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 2947.84 (stop @ 3076, 5pts below the ST model to take into account bid/ask spread)

- DAX: long at 9106.25 (stop @ 9383, 10pts below the ST model to take into account bid/ask spread)

- IBEX: long at 9745.8 (stop @ 9858, 10pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

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

Looking at the chart of the Sigma Whole Market Index, the chart looks like a perfect double top (at this stage). It will be crucial to monitor if the decline is impulsive or if it acts like a consolidation.

Another worrying signal comes from the Sigma Smart Money Index. While we have a perfect double top on the Sigma Whole Market Index (red line), we have a clear lower high on the Sigma Smart Money Index (blue line). This means that smart investors took benefit of this rebound in order to cover / reduce their exposure to the market. This is not a good sign...

Looking at our indicators, the Swing was at '2', telling us the reversal was impulsive.

The ST model uplifted some stops:

Short Term Trading Book:

- SPX: long at 1754.73 (stop @ 1753, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3506.23 (stop @ 3429, 5pts below the ST model to take into account bid/ask spread)

- CAC: long at 4107.69(stop @ 4113, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 2947.84 (stop @ 3076, 5pts below the ST model to take into account bid/ask spread)

- DAX: long at 9106.25 (stop @ 9364, 10pts below the ST model to take into account bid/ask spread)

- IBEX: long at 9745.8 (stop @ 9858, 10pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

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

When we have a look at the weekly chart of the Sigma Whole Market Index, we can notice we are close to the pink (ascending) line. We believe this level should act as a major resistance for the market if / when we reach it.

Looking at the daily chart of the Sigma Whole Market Index, it is clear that recent rebound was very strong and highly impulsive with 7 consecutive sessions in positive territory. It would be "normal" to get some consolidation after such a strong move, but this market is so unpredictable that further gains remain possible.

Looking at our indicators, there is no new information. Both the Swing and the Power Level were neutral (at '3').

The ST model computed new stop levels on all our positions:

Short Term Trading Book:

- SPX: long at 1754.73 (stop @ 1750, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3506.23 (stop @ 3425, 5pts below the ST model to take into account bid/ask spread)

- CAC: long at 4107.69(stop @ 4113, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 2947.84 (stop @ 2978, 5pts below the ST model to take into account bid/ask spread)

- DAX: long at 9106.25 (stop @ 9347, 10pts below the ST model to take into account bid/ask spread)

- IBEX: long at 9745.8 (stop @ 9858, 10pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

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

First of all, we would like to explain why we took a "side bet" in our book (1 put spx at 1400).

Looking at the charts, we consider that today's situation (right now) is roughly the same as the one we had few days before bear markets in 1987, 2000, 2007. In order to draw a comparaison, here are 4 charts.

1987:

At the early stage of the crisis, the market declined 8.5% in 10 sessions. Thereafter, we got a strong bounce back (18 sessions) of 61.8% of first decline. The major correction started just after this bounce back.

2000:

In 2000 we got a 8.8% decline in 7 sessions. Thereafter we got a 77.4% retracement in 5 sessions. After this bounce back, the major correction started.

2007:

In 2007 we got a 5.6% decline in 7 sessions. Thereafter we got a 72% retracement in 7 sessions. The bear market started after this bounce back.

Today:

We got a 6% decline in 12 sessions. We got a strong bounce back of 77.4% in 7 sessions. All this is fully in line with what we got in 1987, 2000 and 2007. So, if we get an impulse move to the downside in coming days, it could be a very bad signal from the market.  I have no clue idea of what could be the trigger for such a decline, but similarity is quite high at this time.

  This is why I bought a put in order to protect my portfolio.

There is no new information in our indicators but the ST model computed new stops on all our positions:

Short Term Trading Book:

- SPX: long at 1754.73 (stop @ 1742, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3506.23 (stop @ 3413, 5pts below the ST model to take into account bid/ask spread)

- CAC: long at 4107.69(stop @ 4107, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 2947.84 (stop @ 2970, 5pts below the ST model to take into account bid/ask spread)

- DAX: long at 9106.25 (stop @ 9272, 10pts below the ST model to take into account bid/ask spread)

- IBEX: long at 9745.8 (stop @ 9830, 10pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

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

The Sigma Whole Market Index is now close to a minor resistance (light blue declining line). It would be "normal" to get some kind of consolidation around this level before resuming the uptrend (if the trend is up).

Looking at the chart of the DAX, it is very clear we are close to a strong horizontal resistance. It is also interesting to notice that recent rebound has been weak on the DAX: only 38.2% retracement vs 50% on the IBEX, 61.8% on the CAC, 61.8% on the SPX and 77.4% on the NDX.=> Is the DAX loosing its leadership in Europe?

There is no change in our indicators but the Sigma Trend Index (STI) was able to move in positive territory. This is one more positive element for the market.

After Monday's gains, the ST model uplifted its stops on all positions:

Short Term Trading Book:

- SPX: long at 1754.73 (stop @ 1729, 3pts below the ST model to take into account bid/ask spread)

- NDX: long at 3506.23 (stop @ 3395, 5pts below the ST model to take into account bid/ask spread)

- CAC: long at 4107.69(stop @ 4078, 5pts below the ST model to take into account bid/ask spread) 

- EStoxx: long at 2947.84 (stop @ 2938, 5pts below the ST model to take into account bid/ask spread)

- DAX: long at 9106.25 (stop @ 9046, 10pts below the ST model to take into account bid/ask spread)

- IBEX: long at 9745.8 (stop @ 9802, 10pts below the ST model to take into account bid/ask spread)

Medium Term Trading Book:

- No more medium term position at this stage.

Out of model position: 

- no position at this stage