The market broke 3 important supports within the last 2 sessions:

- the red uptrend
- the green line
- the first horizontal blue line

The market tested (intraday) late September's low but managed to close above it. If the market can't remain above this key level in coming days, the next strong support is around the second horizontal blue line. This represents roughly 3% more downside until the next strong support.

The Sigma Trend Index declined from '-19' to '-34'. The Trend Level (TL) is at '1' (short term oversold). This situation can remain in place for several days (the TL remained at '5' for 8 consecutive sessions in September) but if/when we get an impulse move to the upside (PL and/or Swing at '5'), we will close our short term short positions.

The Power Level (PL) is at '2', telling us we are in presence of an impulse move to the downside.

Looking at our Medium Term Momentum Index, we can notice that after Monday's sell signal (blue line crossing down the red one), the blue line is sliding very fast.

It is also important to notice that this index gives few signals (roughly one per quarter on average).

Conclusion:

The market is oversold on a short term basis but this oversold situation can further deteriorates in coming days if we break the next key support.

If we get an impulse move to the upside, a nice tradable rebound should materialize.

Nevertheless, on medium term basis, our Medium Term Momentum Index gave us a major warning signal.

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Short term position:
- short 1 CAC at 3432.6 (take profit 3290, stop loss 3432)

Medium term positions:
- short 3 SPX at 1376.22
- short 1 NDX at 2578.46
- short 1.5 CAC at 3103.87