- New Science in old markets -

Stocks still stuck, despite recent strength, bonds fall toward support

Stocks have been moving higher in most markets around the world but we are still seeing weekly-scale compressions in important US indices – principally the Transport index (again) but also in the Russell 2000 smallcap index and the S&P400 midcap. This means that we still cannot call for a new 'bull' move, despite modest recent strength.

 

 

There have also been weekly-scale signals in a few US sector indices, some of which seem to be breaking upward - it is too early in the week to tell - but others are still stuck.

 

 

As if this was not enough to worry about, there are a couple of monthly-scale signals to report too - a top extension in a US biotech equity index and a compression in one of our old favourites, the Philadelphia semiconductor index. This last signal seems to be breaking (like a few of the weeklies, above) upwards BUT the month is still young and that biotech top extension points the other way - we just have to wait.

 

 

In the US T bond and ten-year note futures, fresh daily-scale compressions have just formed and broken downward. This has brought German bunds down closer to the support that we identified recently at an old compression. Stay short in both these government bond markets, looking to cover on a test of that support.

 

 

Elsewhere, precious metals are compressed, as is natural gas. More on this soon and don't forget the next significant turn in stocks and bonds is on August 20th.

 

RE