There were top extensions yesterday in both the Dow industrials and in Copper futures:
This new Dow signal gives us another reason to hold on to US equity index shorts, just as prices had pushed up to the very limits of resistance, as we wrote yesterday.
The Copper signal indicates that the rally from two-year lows that started at the beginning of January has now run too far, too fast. While the scale of it has not been particularly large (42c or 17%) the price has moved up with hardly any pause, which we find to be typical of a short-squeeze. Watch out, as there may soon be a resumption of weakness which could be significant. As ever, when a top extension occurs, we are reluctant to sell short immediately as there may need to be some 'churning' while a top can form. Let's wait a bit, but we are keen to sell.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com