Brent crude made a daily-scale top extension yesterday. It is the only energy market to have done so in this current rally but it is a leading benchmark so we should pay attention:
This has the usual meaning of a top extension - this price rise is at or near an end and you should take profits on any long positions (we didn't advise any) that you may have. There may now be a period of 'churning' while the market either makes a top or 'consolidates' before another up-move. To provide some context, let's look at another member of the group at a weekly-scale - in this case Rbob:
This compression>upmove then another compression>upmove is typical of a firm bull market and so it seems unlikely that this single daily-scale top extension in Brent will bring this whole energy market move to an end. It probably does mean that there will be good two-way trading chances in energy over the next few weeks, so we will trade accordingly - buy dips, sell rallies and don't get whipsawed.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com