The Sigma Whole Europe Index remains in difficult territory: it seems unable to print fresh medium term highs (unable to move above the pink horizontal resistances).

Looking at European trend, we can notice that even if the long term uptrend remains in place, medium term trend is in a distribution pattern while short term trend is rather in a downtrend (or consolidation).

The Sigma Trend Index is back in positive territory and the swing came in at '4'. It is important to notice the amount of impulsive move (up and down) in 10 latest trading sessions. This is not a good sign because this underlines that investors are highly nervous and they have no clear idea for the next direction: bulls and bears ae struggling.

This nervosity can also be seen when looking at the huge negative divergence between the Sigma Smart Index Europe (SSMIE) and the Sigma Whole Europe Index. This means that investors continue to reduce their equity exposure using derivatives (options).

The Sigma Whole Market Index is testing an important support. Let's see what happens in coming sessions.

Looking at the Sigma US market, we can notice that all trends remain positive at this stage.

The Sigma Trend Index is close to its zero line and the Swing came in at '2' for the second day in a row. Let's see what happens next.

Daily Trading Book: 

The Sigma Whole Europe Index enjoyed an impressive rally, daily volatility is picking up. According to CNBC (but I didn't had the opportunity to double check numbers) the volatility of European volatility hit multi months high. This means both bulls and bears are getting very nervous.

Looking at key European indexes, we can notice a huge white candle on Thursday. Nevertheless, most of them are still below major resistances. So, it is too early to say the correction is over.

The Sigma Trend Index jumped to'6' and the Swing came in at '5', telling us the day was highly impulsive.

The Sigma Whole Market Index enjoyed a nice bounce back and was able to move above the pink horizontal resistance. In order to restore the bull run, the market needs to move above the red horizontal resistance.

We believe the Nasdaq 100 remains the key US index to focus on at this stage: the break of current trading range (delimited by the pink and the red horizontal lines) should indicate the direction of the next move.

The Sigma Trend Index moved in positive territory and the Swing came in at '5', telling us the move was highly impulsive.

The ST model upifted its stop on the SPX:

Daily Trading Book: 

The Sigma Whole Europe Index continues to slide and we continue to get lower highs and lower lows (for a couple of months now). This is an important sign of weakness and we don't underestimate this signal.

Looking at some key European indexes, we can notice this weakness is well spread across the continent (even for the DAX).

Looking at the Sigma Smart Money Index Europe, we can notice a sharp negative divergence with the Sigma Whole Europe Index. This means that big investors continue to reduce their exposure to the European market.

The Sigma Trend Index continues to slide (at '-9') but we are not in oversold territory (yet). This means that it is too early to buy. The Swing came in at '2', telling us the decline was slightly impulsive.

The Sigma Whole Market declined below a major support. The situation becomes highly dangerous for the bull case.

Most major indexes are now in critical territory and the Russell2000 and the MidCap400 are now in a double pattern (with a false break/bull trap).

The double pattern is also clear on the NDX. This index is right on a major horizontal support, it is very important to keep this level or we will get another downleg.

The Sigma Trend Index declined to '-16' and the Trend Level (TL) is at '1'. So, the ST model is ready to generate a buy signal.

The SPX declined below our stop level, so we cut our long position:

- SPX: 1997.87 - 2058.9 = - 61.03 (loss)

Daily Trading Book: 

While the ST model is based on a trend reversal approach, the intraday model (UST Model) is a trend based model. So, both models are working on different approach.

We have been working on intraday models for a couple of quarters and we are testing them in the market since early September. We are happy with current results and we hope to launch the new internet site (with a lot of new functionalities) by the end of H1: strategy approach - equity model portfolios - quant models for index trading (intraday and daily based).

For the time being, most intraday models are short and some are neutral.(those models are hourly based)

The Sigma Whole Europe Index is testing an important horizontal support. This market will remain under pressure as long as it prints lower highs and lower lows.

Looking at some key European markets, the danger is evident.

The Sigma Trend Index remains near its zero line: a decline in negative territory would be another bad signal for European markets.

The Sigma Whole Market (SWM) Index was under pressure on Friday but it is too early to say if we printed a medium term top or if we have a short term consolidation. As long as the SWM stays above October's low, the short term consolidation is our favorite scenario.

Looking at some US indexes, there is no sign of reversal but the weakness in the NDX remains something to focus on because current pattern looks like a double top.

The Sigma Trend Index is also close to its zero line. So, this indicator tells us there is more danger than it looks at first glance.

Short Term Trading Book: 

The Sigma Whole Europe Index had a volatile session but was finally able to stay above a key horizontal support (blue line). For sure the Greece will remain an important topic in early 2015 and the election campaign could create some volatility on the European market.

Looking at some European indexes, most of them remain at critical point, it is too early to say we are out of the wood. Nevertheless, Monday's 'hammer' is a positive sign.

The Sigma Trend Index remains at '2'. All other indicators are neutral at '3'

The Sigma Whole Market Index remains above its major horizontal support. It seems like nothing can stop this market.

Looking at some US indexes, the situation is very healthy, there is no cloud at this time. The Nasdaq 100 is the only point of attention because a double top pattern could be under 'construction'.

The Sigma Trend Index declined to '15'. Both the Swing and the Power Level (PL) were neutral at '3'.

There is no change in our positions:

Short Term Trading Book: