There have been a few scattered top extensions in Nasdaq indices and Asian indices, as reported in recent editions. Now there has been a daily-scale signal from the S&P futures which makes a dip even more likely:
There is also a turn due today or in the next two days, which when combined with a top extension usually provides a reliable opportunity to sell short. Accordingly, we now advise selling this instrument short and liquidating any outstanding longs in the US or Europe - we had recommended buying the UK in the 1st July edition.
A note of caution: This top extension is only at a daily scale and there are longer-term forces that are still operating to push prices higher. We have referred to this situation a number of times recently, as US markets are pushing higher from weekly-scale compressions in the Russell 2000 and Value line indices. This conflicted situation may be resolved by a dip from hereabouts, followed by a resumption of the uptrend after a few days or weeks - we will advise.
There is still a chance that we will see a ‘blow-off’ final rise in these indices as liquidity pushes prices up into ‘one last high’. This is not a forecast, merely a warning that there may be a ‘last gasp’ rally as often seen in the final stages of a bull run. We will offer more specific advice as events unfold.