Mardi 26 août 2014
The Sigma Whole Market Index printed a perfect double top. We are not particularly bearish at this time because the momentum has been so strong
we don't believe we could roll down right now. Nevertheless, we consider some clouds are in the market. So, we will have to monitor any
distribution pattern around this level.
The biggest warning is coming from the Sigma Smart Money Index (SSMI) where we can notice a clear negative divergence (lower high on the SSMI and higher high on the Sigma Whole Market Index).
Another warning signal is coming from both the Russell 2000 and the S&P Mid Cap 400 which are unable to break meaningful resistances in current rebound. Current action looks like a counter
trend move, a bounce back in a downtrend.
Looking at Europe, we can notice that most indexes are now above strong resistances. So, we don't expect a reversal from here. It seems European
indexes still have more upside. Nevertheless, they are so far from their highs that current action looks like a bounce back rather than a new up
The Sigma Trend Index continues to climb, we are now at '19', not very far from the key '34' level.
The ST model computed new stops on most of our positions:
Short Term Trading Book:
- SPX: long at 1936.12 (stop @ 1915, 3pts below the ST model to take into account bid/ask spread)
- NDX: long at 3894.96 (stop @ 3829, 5pts below the ST model to take into account bid/ask spread)
- CAC: long at 4180.52 (stop @ 4131, 5pts below the ST model to take into account bid/ask spread)
- EStox: long at 3036.56 (stop @ 3002, 5pts below the ST model to take into account bid/ask spread)
- DAX: long at 9184.25 (stop @ 9147, 10pts below the ST model to take into account bid/ask spread)
- IBEX: no position at this stage (according to our model, stop would be at 10320)