There was a daily-scale compression in wheat yesterday that has broken up today:
This is the first indication that there will be more strength in grain markets and we would follow this signal right here and now by adopting long positions.
Copper has also compressed at both a daily and a weekly scale:
This offers the usual opportunity when a compression occurs during an existing trade to place a close protective stop on the position. We have two outstanding short-sale recommendations in copper dating from the August 28th and September 12th editions, so we can now advise placing a protective stop above these compressions. The daily-scale compression high is at 3.2975 and the high of the weekly version is 3.3595. Both are closer than the 5% stop that we usually advise.
There have also been compressions in the various $-Yen instruments, an example of which is shown in the first currency chart:
We mentioned in the September 19th edition that the prospects for the $ remain poor in the medium term. The reason for this view is shown in the 2nd of these currency charts - the $ index has broken down from weekly-scale compressions. Despite this, we advised covering $ shorts in that same edition because of the third currency chart, showing a top extension in the £/$. This new compression means that we may have to advise jumping back in to $ shorts earlier that we expected. We watch closely.