The recent rise in copper prices has produced a top extension at a daily scale. This is the third in the whole rise since June, as labelled on the chart:
This means another pause, dip or reversal is due from hereabouts and the swings are getting bigger. This means we should be looking for a chance to sell short, with the usual caution - top extensions mark the imminent end of the current upmove but sudden reversals into a down move are rare. They do happen sometimes but a period of 'churning' while a 'top' forms is more normal. Please trade accordingly.
US stocks are trading quietly at all-time highs. This is unnerving some participants as there is no sign of the 'mania' that many expect to precede the end of this long-running bull market. The slow 'melt-up' has mostly paused here and this was signalled by top extensions at various time frames, as reported in recent editions. Those indices that are making slight new highs (such as the Dow and Nasdaq) have continued to generate new signals, while other indices are trading sideways (the S&P and midcap).
These new signals mean that the upmove is still over-stretched and so we still do not expect strength to be sustained. If short, stay short. Here are the latest daily and weekly Dow futures signals:
All signals generated by software supplied by our friends at Parallax Financial Research www.pfr.com