Our key indexes closed in positive territory on Monday (3rd consecutive day), confirming the view we expressed during the week-end that the next upleg will probably occur this week.

The summation 21 gave a fresh buy signal on Monday.

Conclusion:

The market seems overextended, but we have to respect our indicators, a buy signal remains a buy signal, and we don't want to dismiss it.

Nevertheless, we have to notice that the last signal (sell signal) was reversed after one day. So, when market enters in this kind of period (distribution period), this is usually when we are close to top or bottom in the market.

Have a nice day,

SigmaTradingOscillator

On Thursday, market continued its bounce back, and our key indicators closed above the zero line (for the first time).

Friday's close will be crucial in order to see if the market can close above the zero line for the second time.

If it was the case, this would invalidate the sell signal we got earlier in the week.

Have a nice day,

SigmaTradingOscillator

Following Monday's session, we were waiting for a confirmation from our breadth index that the uptrend was over.

This is done tonight.

It is important to notice the violence of this trend reversal: our Sigma trend Index is already at oversold levels (-77), and this happened in 3 sessions only!!!

A short term bounce back could happen from these levels, but what is next?

The breadth index closed for the second time in negative territory, confirming a trend reversal signal.

The summation 21 index continues to quickly deteriorate. We are now close to negative territory on this index too (left scale).

Conclusion:

When we look at price action in famous index such as SP500, Nasdaq and DJ Industrial, it looks like this move is just a pullback in an uptrend.

When we look at damages in our Sigma Trend Index, Breadth Index and the Summation 21 Index, it sounds like something really bearish is under development.

For sure, some indexes are heavily oversold (Dow jones Transport and Russell 2000) and this situation could trigger a short term bounce back. But if the Breadth Index and the Sigma Trend Index can't move quickly in positive territory, then a sharp correction will occur.

Have a nice day,

SigmatradingOscillator

Following Friday's session, most of our indicators turned negative.

Don't forget we need two consecutive closes in negative territory for a trend reversal signal.

Our Sigma Trend Index reached a new low at -11.

Our breath indicator is slightly lower, but we need 2 consecutive closes in negative territory in order to get a trend reversal signal.

The turnover index gave a fresh sell signal on Friday.

  The summation 21 gave a new sell signal too. Moreover, we can notice that the summation 21 made lower high and lower low since mid January, signalling an important negative divergence with prices.

Conclusion;

We remain focus on both the breath and the Sigma Trend index because they were the most accurate in telling us: "the uptrend is weak but still alive". We want/need a trend reversal signal in those indexes.

Have a nice day,

SigmaTradingOscillator

Following yesterday's session, both our Sigma trend Index and the Breath Index weakened.

They are now close to the zero line. In order to validate a trend reversal, we need 2 consecutive closes below the zero line.

This is not the first time this year that the Sigma Trend Index declined below the zero line, but each time it bounced back  after one day in negative territory. This move indicated we were in presence of a weakening uptrend but not in presence of a trend reversal.

Conclusion:

We need to be patient, and we must wait for a trend reversal signal from our indicator.

Have a nice day,

SigmaTradingOscillator