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Unable to Close Above Strong Resistance

  1. Even if the market was able to move above the strong horizontal blue line on an intraday basis, it wasn't able to close above it.
  2. We can also notice that the downtrend joining April's and May's tops remains in place.
  3. Looking at today's candle, it looks like a hammer (could be a reversal day).

Sigma Whole Market Index

Looking at our indicator, The Sigma Trend Index increased slightly from '18' to '20'.

The Trend Level (TL) is at '5', indicating we are overbought on a short term basis.

Sigma Table

Looking at the Breadth Index, we can notice a negative divergence: higher highs in price (blue line) but lower highs in the breadth (red line):

Market Breadth


Conclusion:

Looking at different elements, it looks like a consolidation/correction/pullback should occur in coming days because:
- The Sigma Whole Market Index was unable to close above key resistances and we had a kind of reversal day on Monday
- Trend Level is in overbought territory
- There is a negative divergence between price and the breadth index

If this pullback occurs, we will monitor our Swing indicator and our Power Level in order to see if we are in presence of an impulsive move or not.

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

Short Term positions:
- long 1 NDX at 2705.07 (hedge of our medium term short, stop loss at 2690)

 

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