As we wrote during the week-end, some divergences were in the market at Friday's close.

Those divergences were confirmed by an important rally yesterday.

We can notice that our Sigma Whole Market Index had an important white candle yesterday. It looks like the market would like to retest the horizontal green line.

On top of that, our short term fear index moved (yesterday) from -34% to -1%, telling us there isn't anymore fear in the market.

Our Sigma Trend Index (STI) remains in negative territory, moving from -59 to -13. Nevertheless, with 6 consecutive sessions in oversold territory (six consecutive '1' for the Trend Level (TL)), we believe a short term bounce back could happen at anytime.

Our Swing Indicator (Swing) moved from 3 to 4 (on a scale from 1 to 5, with 3 = neutral), telling us that yesterday's move was bullish.

Conclusion:

Friday's session gave us a red flag (=> we reduced our short by half),yesterday's session gave us a green light for a short term rally.

In this context, we decided to cut the remaining part of our short positionat market close => 1345.06 - 1314.92 = 30.14 (gain).

We are now neutral because our medium term indicator (STI and breadth index) remain in negative territory, telling us that this move is probably a short term bounce back rather than a trend reversal.

We are waiting for good entry point in order to open a new position.

Current position: neutral

Have a nice day,