The Sigma Whole Market Index enjoyed a huge rally. It is now testing the lower band of the former uptrend. At the same time, the Sigma Trend Index is close to its key '34' level. Let's see what hapens with the Fed.

Looking at the Sigma Whole Europe Index, we can notice the situation is much less impressive: recent retracement is much smaller than the US one.

Looking at some specific indexes, we can notice the NDX is close to print a new historical high. The Russell2000, Mid Cap400 and Small Cap600 were able to post huge gains on Tuesday. This rally was just impressive.

The Sigma Trend Index is now at '25'. This means it is close to the key '34' level required for a sell signal (have a look at our methodology for more details on buy and sell sigals).

The Swing came in at '5', telling us the rally was highly impulsive.

The ST model uplifted its stops for both the SPX and the NDX:

Short Term Trading Book:
 

This is very impressive to see what happened in the market during this week. Two weeks ago we were in a free fall and now the market looks very strong, once again.

We remain long at this stage because the ST model is (still) long. Nevertheless, this type of huge volatility (up or down) usually happens in bear marrather than in bull market => be careful.

The Sigma Whole Market Index is right below a major resistance (pink horizontal line). A move above this level would sharply reduce the probability of a new down leg while a reversal from here could be very nasty.

Some indexes are at key levels too. Once again the NDX is the strongest one while the Russel2000 remains among the weakest indexes.

The Sigma Trend Index is well in positive territory. The 8th latest sessions have been impulsive (either positive or negative). This is, another way to underline the volatility is important.

The ST model uplifted all its stops:

Short Term Trading Book:
 

The Sigma Whole Market index is very close to the pink horizontal resistance. As long as the market remains below this level, we consider the bounce back scenario is the one to favor (-> new decline to come). If the market can move above this level (pink horizontal resistance), the probability that the correction could be over would sharply increase.

The CAC is now on a strong resistance and the NDX is testing its downtrend.

The Swing was at '2', telling us the decline was rather impulsive. That was something else than a 'normal' consolidation.

The ST model uplifted most of its stops:

Short Term Trading Book:
 

When we have a look at the relative performance between the S&P1500 and the US 10y T-Notes, we can clearly notice that the 3years uptrend was broken. This means the TINA effect (There Is No Alternative 'to equities') is over. Why? There are plenty of reasons: US dollars strength, geopolitical risk, earnings risk, risk of recession in Europe, ...

Anyway, whatever the reason is, the market is telling us that bonds are more attractive than equitties at this stage and this is something highly bearish for equities.

Looking at the Sigma Whole Market Index, we can see a clear bounce back from oversold territory but as long as we remain below the blue horizontal resistance, there is a risk to retest last week low. And if this low can't resist, there is a high probability that the next support will be the green horizontal resistance.

The Sigma trend Index (STI) is right on its zero line. So, it is highly possible that recent bounce back was nothing else than a bounce back from highly oversold territory. It will be highly important to track if the STI can move (and remain) in positive territory in coming sessions.

The Swing was at '4', telling us the rebound remains rather impulsive.

The ST model uplifted its stops on both the NDX and the SPX:

Short Term Trading Book:
 

First of all, we want to show you the relative performance between the S&P1500 and the US 10y T-Notes. On this chart, we can clearly notice the uptrend channel has been broken. So, the bull market in equities (relative to bonds) is over. According to us, this is a major sell signal.

The Sigma Whole Market Index sharply declined early in the session and recovered most of its losses at the end of the day.

Current market action is very wild, and it is nearly impossible to say if Tuesday's action was a (short term) capitualtion move or a bounce back in the downtrend.

The Sigma trend Index remains in oversold territory, and both the Swing and the Trend Level (TL) are telling us the session was neutral.

Our long position on the NDX has been stopped:

stopped at 3690.91 => 3690.91 - 3824.47 = -133.56 (loss)

Short Term Trading Book: