The last-minute rally in US stocks on Friday did (just) push values above the weekly-scale compressions that we have been reporting for some weeks. The Value Line made new highs for the range and the break this entailed would normally be enough to call for a new upmove of several months' duration. The problem is that the small-cap sector indices did not make the same gains and so there is doubt about the apparent 'break upward'. China also remains tightly range-bound but this cannot continue for much longer:
There are other reasons not to chase this move upwards. There have been several more daily-scale top extensions in addition to those in Sweden and Germany reported in the November 1 edition; two in Asia and two more in Europe:
Furthermore, several industry sectors in the US have also made daily-scale top extensions, while the media sector index has compressed and is seemingly breaking downward:
All this means that we are still sidelined and watching carefully.
Our commodity report will be sent tomorrow.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com