Following an encouraging 2 years back testing on the DAX30, we decided to add it in our current (live) test (with real money).

In this context, we did some minor change in CAC's ST model in order to avoid a perfect match with the DAX => we slightly modified stop loss and take profit levels. Here is the updated P&L of this model on a 2years basis.

ST Model:

Order book:

- SPX: no position at this time (model is 'stop')

- NDX: 1 short at 3022.04 (stop @ 3055, 5pts above the model to take into account bid/ask spread)

- CAC: 1 short at 4016.98 (stop @ 4110, 5pts above the model to take into account bid/ask spread)

- DAX: no position at this time because we are too close from stop level

Both the US market and the French CAC40 remain at the top of the pattern. There is no sign of reversal at this stage.

There is no change in our short term indicator.

Conclusion:

We continue to expect a short term pullback from current levels, but as there is no chance to get a fresh sell signal from our short term model now (market isn't anymore overbought on a ST basis), we will close our short term short after a 3 to 5% decline.

We will present our new medium term model based on weekly data. In this context, we booked our medium term losses, and we will start to test (live) the "new" model on Monday the 20th of May. More details during the week-end.

We have to admit that previous medium term model was a failure.

Short term positions:

- short 1/2 CAC40 at 3981.72 ( stop loss at 3998)

- 1/2 SP500 at 1647.03 (stop loss at 1660)

- 1/2 NDX at 3000.09 (stop loss at 3020)

Medium term positions:

no more positions

The US equity market continued its advance on Tuesday, and we are now very close to the red ascending line (around0.5%). There is no sign of reversal at this stage, but it should be difficult to go trough this resistance on a straight line. Even if we move above this line in coming weeks, we should (at least) have a pullback before.

The French market is just below the blue ascending line. It is interesting to notice that this market is not able to continue its advance (for the time being) even if the US market remains very strong. We consider that as long as we remain below this blue ascending line, there is an attractive risk/return for a short position.

There is no new information coming from our indicators: there is no indicator at 'extrem' level.

So, there is no change in our short term model: neutral on both the NDX and the SPX, long on the CAC40:

Conclusion:

Due to very strong resistances close to current levels, we expect (at least) a pullback in coming sessions.

We took a small short position on the CAC40 due to the blue ascending resistance. If the market is able to close above this level, we will close our short and re-long because we don't want to 'fight' our own model.

If we move above our stop loss in the US, we will remain on the sideline, waiting for a signal from our short term model.

Short term positions:

- short 1/2 CAC40 at 3963.67 ( stop loss at 3977)

- 1/2 SP500 at 1647.03 (stop loss at 1660)

- 1/2 NDX at 3000.09 (stop loss at 3007)

Medium term positions:

- short 3 SPX at 1446.09

- Short 1 NDX at 2758.8

- short 2 CAC at 3251.07

The US market remains very well oriented, and there is no sign of reversal at all. The red ascending line is still rather far from current levels (1.4% above current levels).

Looking at the French market, the situation is different because the market reached the blue ascending line.

So, according to the historical data of this pattern ( http://www.thepatternsite.com/rabfa.html ), the 2 possible outcomes are 3480 or 4220.

Our US indicators were not able to generate a new signal, the situation is unchanged in France:

So, the short term model remains neutral on both the NDX and the SPX, and in buy mode on the CAC40

Conclusion:

Our model wasn't able to generate a fresh sell signal on the US.

The French market is now at the top of its broadening pattern, we are ready to act.

Short term positions:

no more position

Medium term positions:

- short 3 SPX at 1446.09

- Short 1 NDX at 2758.8

- short 2 CAC at 3251.07

The US market continues to rise, it seems like nothing can stop it.

The bottom of red uptrend could offer some kind of resistance to the market, but we don't consider it as a strong resistance.

The CAC40 continues to rise and we are now close to an important resistance (blue ascending line). It will be key to monitor how the market reacts when it reaches this level(have a look at week-end analysis for more details on this pattern).

Looking at our US indicators, the trend level (TL) remains in overbought territory (at '5'), but there is not sign of reversal coming from the Swing and/or the Power Level (PL)

Even if the CAC40 experienced a strong rally in recent days, it is not overbought at this time because the Trend Level is at 4. Once again, there is no sign of reversal because both the swing and the power level (PL) are at '3' (neutral).

Our short term model was stopped yesterday on the SPX, there is no change to the CAC40:

Conclusion:

US markets are in overbought territory, true, but there is no sign of reversal at this time. On top of that, the short positions we initiated at the top of the market (in March) were stopped on both the NDX and the SPX (losses around 3% on each positions)

The long position on the CAC40 remains open at this time.

Short term positions:

- long 1/2 CAC40 at 3905.63

Medium term positions:

- short 3 SPX at 1446.09

- Short 1 NDX at 2758.8

- short 2 CAC at 3251.07