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Commodities continue to extend, 5-year notes break up

Commodity top extensions continue. The main commodity index has continued to make extension signals and now we have had individual extensions in soy beans and sugar:

These two new signals mean that soy beans can now be sold short in addition to the earlier advice to sell soy oil. Sugar may also be sold but be careful - there has already been a substantial dip immediately after this new signal and the market may have 'corrected enough' by dipping in this way - a slight new rally high is possible. We would not avoid the trade, just allow for that possibility.

No sell signals yet in energy, which we suspect may have the best potential for profit on the short side.

The five-year note contract broke upward from its recent daily-scale compression, meaning that a rally is now likely in US notes and bonds. An updated chart:

Take a trade on the long side here, at any point from 5 year notes through to 30-year bonds. The signal is only in the 5-year but the effects will probably be felt further out too.

More soon