• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

We Under Estimated This Move

We wrote on Thursday:

"Looking at the Sigma Whole Market Index (aggregate of 16 US indexes), we can notice an important reversal day (today). In this context, it seems that the consolidation is still alive and further upside within this bounce back is possible (upside to the horizontal green line)"

Nevertheless, we had never expected such a rally and were were really surprised by the violence of Friday's move.

Looking at our indicators, we can notice the huge move from the Swing indicator, moving from 3 to 5, telling us this move (to the upside) is probably not over.

On the short term, the Trend Level (TL) is at '5' (overbought territory).

Sigma Table

Looking at the short term sentiment, we can notice that 'euphoria' is peaking up (red line), reaching level in line with previous tops in the market:

Euphoria versus Panic Level

Conclusion:

We have to admit that this scenario is not the one we were expecting, and most of our positions hit their respective stop loss during Friday's session.

Looking at the nature of Friday's move, it looks like a pullback is possible early next week, but higher price should be reached later in the week.

Even if we consider that current move remains corrective, we have to respect what happen on Friday: a powerful impulse move (to the upside).

Like I often say to my colleagues: "never try to stop a train with your hands, it could hurt..."

If we have a pullback on Monday, we will reduce our short position on the SPX, and we will wait on the sideline, waiting for an opportunity (long or short).

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.

We wish you a nice week,

Current position:
- short 2.5x std size SPX at 1331.28 (no stop loss in place)

 

Back to homepage

Leave a comment

Leave a comment