The compressed conditions that we have been reporting in Equity markets and US bonds continue.
There was a weekly-scale compression in the ten-year note yield which comes as no surprise in these strange times when governments issue new bonds while continuing to buy their old ones:
Our methods are most useful when markets are free and unfettered, which is not the case in US government bonds and notes, but the mood of the crowd still has some role to play even in this ‘managed’ market so we warn again of large moves imminently.
The compressions in equity markets are mostly at a daily scale but there is a sprinkling of new weekly-scale signals there too – most notably in Japan – while both Germany and the US value-line index are still in the area of their recent weekly compressions, meaning that there has not been a break yet:
The most significant potential development is that China, which has been compressing at both weekly and monthly scales, may have broken downward from the weekly version at the end of last week:
It is too early in this week to tell if there will be any ‘follow-through and values are now at exactly the bottom end of the recent range, so China-watchers may have a nail-biting few days while we wait to see if the break is confirmed toward the end of the week. If brave, short-sell now but your stop must be loose.