On a short term basis, it remains difficult to have a clear idea about the next move: double top scenario prior to selloff or direct selloff.
We can notice on the chart of the Sigma Whole Market Index (aggregate of 16 US indexes) that:
- the market made a rising flag and broke it yesterday. (in favor of the bearish scenario)
- but the market made a reversal day yesterday (so, wait one more day in order to see if we are not in presence of a false break)
Looking at our indicators, we can notice that the Sigma Trend Index (STI) closed in negative territory at '-3'. We need 2 consecutive close in negative territory in order to confirm the change in trend.
All other indicators are neutral (at '3').
Conclusion:
We believe that Friday's session is very important for the market. Tonight, we should be able to determine which scenario (double top to 1385 or direct selloff to 1200) has the highest level of probability to occur.
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Current position:
- short 1.5 SPX at 1331.28 (no more stop loss)
- short 1 CAC at 3129.94 (stop loss 3172)
- short 1/2 NDX at 2630 (no stop loss)
