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

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Not Sure The Top Is In

After reaching on Thursday a level pretty close to our target zone for a major top before a sharp correction (leading the market to at least 1200 on the SPX), the market declined on Friday.

This decline is not a surprise for us, but we are not convinced the major top is in place.

So, once again, we want to analyze two different scenario:

- the market find some support on Monday (around current levels) and climb up to our target zone

- the market is not able to move into our target and break through our warning area (see chart)

Sigma Whole Market Index

Which scenario do we prefer?

At this stage, we don't have any preference because:

- We can notice a doji on Thursday (green box), and we can also notice that in recent past, this figure occurred prior to important decline (good for 2nd scenario)

- We have a confirmed negative divergence on the Breadth Index (see chart below) (good for 2nd scenario)

- According to the wave structure, Thursday afternoon and Friday's move looks like a 4th wave (good for 1st scenario)

- As long as the market is above the bottom end of the warning area, it remains a possibility to reach our preferred target zone.

Looking at the Breadth Index, we can notice a confirmed negative divergence (higher high on price vs lower high on Breadth) which is an important warning signal for the market (warning signal, no more).

In order to get a confirmation of the trend reversal, we need two consecutive closes in negative territory.

Market Breadth

Looking at other indicators, we can notice that the Sigma Trend Index (STI) declined from '10' to '1'. This is an important decline, but as long as it remains above the zero line, it is too early to say that a trend reversal is in place.

It is important to notice that the swing indicator is at '2', telling us that Friday's move could be impulsive.

Sigma Table


We have early signs that the major top could be in place (confirmed divergence on the Breadth Index), but it is too early to consider this scenario as the main scenario.

So, we keep our short term long positions but we introduced stop orders around our breakeven level (on aggregate basis).

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.

Current positions:

Medium term positions:
- short 2 SPX at 1336.99
- short 1 NDX at 2578.46

Short Term positions:
- long 1 SPX 1363.23 (stop at 1356)
- 1/2 long NDX at 2585.95 (stop at 2605)


Back to homepage

Leave a comment

Leave a comment