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Market Review: Bounce Back or Blood on The Wall

Looking at the chart of the Sigma Whole Market Index, we can see a doji on Friday. We can also notice 3 recent higher lows. It seems the market found some support around this level. If this support doesn't hold on, we will get a sharp acceleration to the downside.

Sigma Whole Market Index Chart

Looking at European indexes, we can notice that most indexes printed a major reversal on Friday:

EuroStoxx50 Chart

Stoxx600 Chart

DAX Chart

PSI Chart

MIB Chart

IBEX Chart

MCAC Chart

CAC Chart

AEX Chart

BEL20 Chart

OMX Chart

FTSE100 Chart

All Europe 800 Chart

SMI Chart

So, we consider that European indexes were able to print major reversal patterns on Friday and if those lows are broken, things will probably get very nasty.

Looking at our indicators, the swing remains at '2', telling us the session was impulsive (to the downside). The Sigma Trend Index deteriorated again to '-13' and the Trend Level (TL) at '1' tells us the market is extremely oversold (on a short term basis).

Sigma Table

Our long positions on the CAC, DAX and EuroStoxx were stopped close to the bottom of the session. This is a pity because the market reversed around those levels and we got a strong rally until the end of the session. That's life...

- CAC: stopped @ 4415.87: 4115.87 - 4200.75 = -84.88 (loss)
- EStoxx: stopped @ 2974.91: 2974.91 - 3046.53 = -71.62 (loss)
- DAX: stopped @ 9230.55: 9230.55 - 9444.94 = -214.39 (loss)

Short Term Trading Book:
- SPX: long at 1793.47
(stop @ 1747, 3pts below the ST model to take into account bid/ask spread)
- NDX: long at 3506.23 (stop @ 3407, 5pts below the ST model to take into account bid/ask spread)
- CAC: No more medium term position at this stage.
- DAX: No more medium term position at this stage.
- EStoxx: No more medium term position at this stage.

Medium Term Trading Book:
- No more medium term position at this stage.

Out of model position:
- no position at this stage

 


For those of you interested in our trades or in our methodology, you can visit our site. A full description of our ST model and MT model is available on our site. You can also subscribe to our twitter account (@SigmaTradingOsc), it is free and you are updated on our latest view/trades.

 

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