Both European equities and US futures had a difficult start on Monday following the disappointing outcome of Doha's conference. Nevertheless, both equity markets were able to bounce back and to close at session's high.
The Sigma Whole Europe Index is now close two its March high. We believe this level will act as a resistance area: we can clearly count 5 sub-waves from point 'b?' on the chart. This means current up leg could nearly be over.
We can clearly identify a 5 waves pattern starting in mid-February. On top of that, we can also identify 5 sub-waves from '4?'. So, the whole pattern looks complete and a short term reversal is now possible.
Based on our wave count, the whole up leg started in Mid-February looks complete. So, we believe the equity market could face some difficult times in coming sessions. On top of that, we had a couple of negative reactions after some earnings release: Netflix -12%, Illumina -18%, IBM -5%, ...
On a risk/return approach, we believe the NDX is attractive to short at current levels (4570).
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