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Bounce Back Probably Over, Next Target 1200

Yesterday we wrote:

"Looking at our indicators, we can notice that the Trend Level (TL) is once again in overbought territory (at '5'). A reversal from the Swing or the Power Level (declining to '1') would give us a warning signal that a top could be in place."

Tonight, looking at our indicators, we can notice that the Swing is at '1' and the Power Level (PL) is at '2'. This is a warning signal that the whole bounce back (in 'abc') is probably over and that the market is ready far a SHARP and FAST correction:

Sigma Table

Looking at our Sigma Whole Market chart (aggregate of 16 US indexes), we can notice that today's decline made a lot of damage and brook important support.

We believe a short term bounce back is on the agenda tomorrow or Friday, but we won't ride it, this move is just too fast, and we want to stay in:

Sigma Whole Market Index

Conclusion:

We believe the counter trend rally is over, and we expect a SHARP and FAST decline to 1200 on the SPX.

Current position: short 1.5x std size SPX at 1336.48

For those of you interested in our intraday move, you can visit our site during the day: we post all our trades in real time. You can also subscribe to our twitter account (@SigmaTradingOsc), it is free and you are updated on our latest view/trades.

Have a nice day,

 

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