"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 2 hours Bitcoin Plummets On Price Manipulation Investigation
  • 17 hours The Multi-Billion-Dollar Business Of Influence Peddling
  • 18 hours Goldman Backed ‘Stablecoin’ Hopes To Curb Crypto Volatility
  • 19 hours Consumers Lost $1.6M To Crypto Fraud In Australia
  • 20 hours Facebook May Soon Become A Paid Service
  • 21 hours How Far Can Gold Prices Fall?
  • 23 hours The Battle For Shkreli's $2 Million Wu-Tang Record
  • 1 day The Bitcoin Miner Eyeing A $1 Billion IPO
  • 2 days China’s Social Credit Score Blacklists Travelers For Bad Behavior
  • 2 days Micron Soars On $10-Billion Share Buyback
  • 2 days Nearly Half Of All Americans Are Struggling Financially
  • 2 days Could Crypto Solve The Middle East’s Currency Crisis?
  • 2 days The Biggest Hurdle For The Buffett-Bezos Healthcare Plan
  • 2 days Gold Is Facing An Uphill Battle
  • 2 days Cryptos Struggle To Break Out Of Bear Territory
  • 3 days Could This Software Giant Beat Apple To $1 Trillion?
  • 3 days Kenya: The Blockchain Capital Of Africa
  • 3 days Can Anyone Compete With Netflix?
  • 3 days Can Europe Beat U.S. Sanctions on Iran?
  • 3 days U.S.-China Trade War “On Hold”
Japan Threatens U.S. With $400M In Tariffs

Japan Threatens U.S. With $400M In Tariffs

As U.S.-China trade talks intensify,…

Goldman: Tesla May Need To Raise $10B By 2020

Goldman: Tesla May Need To Raise $10B By 2020

Amid Tesla’s latest round of…

Going Into Capitulation Mode

There are a lot of things to say about today's session.

First of all, as the S&P was testing its 200d MA for more than 2 hours, we decided to book half of our gains by reducing our short position by half at 1284.75 => 1334.07 - 1284.75 = 49.32 (gains).

Looking at our indicators, we can notice that the Sigma Trend Index (STI) declined from '-5' to '-42'.

The Trend Level (TL) moved from 3 (=neutral) to 1 (=sharply down) and the Swing Indicator (Swing) moved from 3 (=neutral) to 1 (=extremely negative). All these data gave us the negative momentum we were looking for after Thursday's session.

Sigma table

Looking at our short term sentiment index, we can notice that the panic level (blue line) is picking up, but we are still well below extreme level (above 40%):

Euphoria versus panic

Looking at our Sigma Whole Market Index (aggregate of 16 US indexes), we can notice that for the first time the market closed below its 200 day MA.

On top of that, the Bollinger bands are expanding, telling us we are entering a capitulation phase. The first support is around 1349 (~=5% below current price) which would be fully in line with an S&P around 1200.

Sigma Whole Market Index


We remain confident that there is more downside to come because markets entered in capitulation mode and the short term panic level is not high enough for a bottom.

We are comfortable with our 1/2 short position. We have a stop buy order at 1302 (in case of a sharp bounce back).

Current position: 1/2 short at 1334.07

Have a nice week-end.


Back to homepage

Leave a comment

Leave a comment