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Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

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Preferred Target Zone or Not?

During a couple of days, we were expecting that the market could reach higher price in current move (here is a copy of the chart we posted last week-end):

Sigma Whole Market Index

With the false break below the uptrend channel (earlier this week), we changed our view, and we were wrong.

Today, it looks like the market is, once again, heading for our preferred target zone: current price are just below a major resistance, and we wouldn't be surprised to get a blow off top early/mid next week.

Sigma Whole Market Index

Looking at our Sigma Trend Index (STI), we can notice it jumped from '-1' to '+20'. The Trend Level (TL) is at '5' (overbought), and both the Swing Indicators and the Power Level are at '4' (impulsive move to the upside).

Sigma Table


Conclusion:

After today's price action (huge impulse to the upside), we wouldn't be surprised to see higher price next week.

We still don't know if we will try to trade this move with a short term position because market are very "nervous" (huge swing in opposite direction) and highly influenced by market rumours (leading to massive short squeeze).

It is clear that US authorities are doing all their best in order to keep US indexes in good shape during the US presidential campaign and for the time being, they are very successful.

Hopefully, we used tight stop losses for our short term short positions, and we were able to exit with small losses (around 1%).

Talking about our medium term positions (which are deep under water), we will keep them as long as this year high is not breached (on our Sigma Whole Market Index, not on a specific index).

Current positions:
Medium term positions:
- short 2 SPX at 1336.99
- short 1 NDX at 2578.46
- short 1.5 CAC at 3103.87

 

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