There has been little to report, so this is an update on outstanding recommendations and views.
US and European stock indices have continued to work higher, after pushing up from compressions. The UK FTSE has continued to do nothing except 'churn' sideways. Here is an update to the same three charts used in the last edition:
This kind of behaviour in the US and Europe may be dull, but moves of this kind are sometimes known as 'self-correcting' because this 'few days up, few days down' gradual trend may take a long time to become overstretched, which these trends are not. Stay long for now and we will advise if/when we see a reason to exit.
This does not change our overall view, which is that most stock markets are in trading ranges and so you should behave accordingly and take profits when you have them - especially if the market lurches in your direction. Any sustained movement is unlikely for a while, so you are likely to see price levels criss-crossed many times.
The Chinese market dipped after the daily-scale top extensions reported in the last edition and is now recovering, as shown in the first chart below. This recovery is likely to continue and we believe that this is a bull market, so expect new highs in due course. Just because we are bullish in the longer-term does not mean that the market will not have counter-trend reactions from time-to-time and we will continue to try and spot them in advance, as we did this time. Japan is trading sideways, just like the FTSE (two advanced island nations, offshore from large trading blocs that may not be so friendly - hmm) and the index will no doubt shortly make a compression signal. We wait.
The gold price has shot up in the last few sessions, to a nine-year high. Silver too has gone up but has now extended AND there will probably be an extension in gold after today's close. Charts on this tomorrow, once we see whether that gold extension is generated or not.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com