The turn event that was due on Friday April 19th has coincided with top extensions in the Nasdaq, Eurostoxx, Dax and some other European indices too. This is a strong combination of signals so, as we have already anticipated, this strongly suggests that a high point has been made in equities at the end of last week. Charts, where the pink tops show extensions, as usual:
Not shown here are those additional top extensions in Holland and Sweden (for the first time) and repeats in Greece and Belgium.
We usually warn that top extensions mark the end of an up-move but not necessarily the start of a down trend as there may need to be some kind of 'top' that must form before weakness can begin. That may also be true here, but we usually issue bear advice when top extensions coincide with a large enough turn signal, as now. There is also a slight seasonal component to this advice as Spring often marks the start of a multi-month downwards or sideways period in stock markets. Sell.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com