There is fairly large turn due in equity markets tomorrow, Monday the 28th September, as shown in the turn update schedule in the September 1st edition. The US equity markets are in a churning range with high daily volatility of 2% in the S&P futures compared with the six months up to mid August of a little over 1% and a long-run average nearer 1.5%. In these volatile circumstances it is hard to say whether any particular turn marks a high or a low point (which is what they are supposed to do) until it has passed into history, then we can look back and see what was the significance, if any. Now we have a possible timing change.
Friday was a volatile day typical of current conditions in stock markets generally and in US equity index futures in particular. The S&P rallied about 30 points to make a slightly new high for the last few days' trading and then dropped back by the same amount.
This makes it possible (even likely) that the turn due on the 28th came a session early and was marked by that equity market intra-day high point on Friday. If so, we missed our chance to re-short the various equity markets which we had recommended partially covering in the edition of the 22nd September. We had wanted to re-sell a rally that we expected would peak tomorrow and that rally may now not happen.
Accordingly, we would now re-establish any shorts that were covered last Wednesday on any rally (even quite a small one) over the upcoming session, starting from tonight's re-opening of the S&P for the new week.
We will comment further in the next day or so.