There was a compression in Nymex crude futures yesterday that broke down today. This new signal points to a new down-move beginning immediately and means that we now advise maintaining those short energy positions recommended in the September 4th edition:
Meanwhile the equity markets are also providing new signals. The latest European markets to make top extensions are Spain and France, while the UK and Austria (often a leader) have compressed:
Big market moves often start with compressions rather than with extensions. If these two new compressions break downward it will confirm our general bearishness for US and European equity markets. We have already advised selling short, so there is no new advice but these new signals open the possibility that any falls from hereabouts could be large. First, we have to see which way they break however and we will report further in the near future.