Following Thursday's session, our indicators slightly improved but remain well in negative territory. We are in a tricky situation and we must run up fast our we will turn lower and previous low (@ 1342) won't probably hold on.

Our SL is @ 1340, and we have a stop sell for a short position @ 1335.

Nevertheless, as all our indicators are in negative territory, it means the main trend is and remains negative, and it means we are only expecting a short term bounce back to the zero line of our indicators (~= 1380), and we will use this bounce back in order to short the market at higher prices.

Looking at our Sigma Trend Index (STI), we can notice that the price has been in negative territory for a couple of days (=> should be short based on this indicator). But as our fear indexes reached intraday panic level, we consider this index is more accurate for short term move. Thus, we expect a short term bounce back and then a decline.

Same data, but in a chart:

Looking at our Breadth Index, we reach the same conclusion: the downtrend is well in place (more than 2 consecutive closes in negative territory).

Conclusion:

We know that all our indicators are pointing to a downtrend, but due to intraday panic level (reached twice this week), we expect a ST bounce back and then the downtrend should resume.

=> With a medium term view, being short is not a bad idea, but we would like to benefit from this ST bounce back in order to short at higher price.

Current position: long @ 1355.1

Have a nice day,